A legal expert fears the Renters Rights Act is driving away much-needed overseas landlords. 

Lauren Fraser – Senior Associate in the Real Estate Disputes teamat international law firm Charles Russell Speechlys – warns that the Act could significantly impact the appetite of larger landlords in the UK’s property market, particularly international investors.

The Act comes into effect today and Fraser comments: “It is hard to see a reality post-implementation in which these key international investors feel encouraged to back and invest in the UK’s property market.

“It is easy to see that those investors may be discouraged by the Act from backing and investing in the UK’s property market.

“At a time when the government is generally attempting to stimulate growth and international investment, this could end up being a serious, unfortunate unintended consequence of the Act.”
 

She claims the much stricter regulatory framework imposed by the Act not only creates additional hoops which foreign investors must jump through,  it also increases their risk exposure.

Fraser asks: “The overarching question is that while the Act will undoubtedly go some way towards strengthening protection for tenants – one key aim of the UK government – will this come at the cost of other equally important aims? “

She says this comes on top of the main already-publicised possible consequence of the Act.

That is, while tenants receive greater protections, more landlords may exit the sector, pushing up rents as a result of stock shortages.