A lawyer has attacked the new Renters Rights Act because it doesn’t make exceptions for institutional investors in the private lettings sector.

Catherine Williams – real estate partner at Addleshaw Goddard – says: “The Act overlooks the important distinction between individual private landlords and large-scale institutional operators. 

“The Act’s changes to how rent reviews are implemented and challenged introduces uncertainty for institutional landlords, who rely on predictable annual rent increases to support long-term investment models. 

“By limiting rent reviews and enabling tenant challenges which could drag on for months —  many of which may be speculative or lack merit the legislation disrupts financial planning for professionally managed rental portfolios and risks undermining the viability of much needed new Build To Rent schemes during a housing crisis.”

And controversially she adds: “These institutional landlords — such as pension funds, insurers and professional developers — are subject to rigorous compliance, sustainability and governance standards. They deliver well-managed, high-quality rental housing and play a vital role in addressing housing demand. 

“Treating them the same as so-called cowboy landlords risks undermining investor confidence and penalising those contributing positively to the sector.”

And she says there’s a strong chance of legal challenges to some of the A t’s measures. 

“If signs of overload emerge and no corrective action is taken, it’s entirely reasonable to expect the legislation could face legal challenge” she adds.

“The Act assumes landlords are bad and tenants are good. But the private rented sector isn’t binary. There are as many good landlords dealing with problem tenants as rogue landlords abusing the system. 

“If we keep legislating on that basis, we’ll drive out good landlords and further shrink supply — and that is bad news for renters and the housing crisis.”