Creating a fair and functioning private rented sector is crucial but if the government gets the implementation of the Renters’ Rights Bill wrong, it could bring about unintended consequences.

You’ll no doubt have seen that the government recently published the Renter’s Rights Bill. It’s huge news for the sector, and something that has been expected since Labour took power.

During that time, there has been plenty of speculation about what reform might look like and how it will influence landlord behaviour. Uncertainty is bad for business, so the publication of the legislation is significant progress.

The government has a challenging task to implement the new rules, whatever they look like when they reach Royal Assent.

To ensure everyone understands the bill and what it means in practice, guidance and training is needed. New tenancy agreements will need to be drafted for England’s 4.6 million private rented sector (PRS) households and any subletting agreements terminated – no mean feat.

Then there’s the matter of implementing the headline policy, abolishing Section 21 ‘no-fault’ evictions.

While we agree with housing minister Matthew Pennycook who said that: “Landlords need robust grounds for possessions in legitimate circumstances, and they need the system to operate quickly when they do”, the Housing Select Committee warned that without reform, the court system would be “overwhelmed”.

We welcome the government’s pledge to continue to develop a new digital system for possession claims and invest in additional court and tribunal capacity to deal with extra hearings resulting from the reforms. However, with Labour ministers not considering these steps a prerequisite of Section 21 ending, we have called on the government to demonstrate their commitment to reducing possession cases and that courts have improved.

When tenants fall into serious rent arrears, landlords will now rely on Section 8 to regain possession of their properties, so speeding up the Section 8 process is crucial.

As it stands, it takes an average of seven months for landlords to regain possession of their properties using Section 8.

As part of the draft bill, it has also been proposed that the time landlords have to wait to issue a Section 8 notice is extended from two months to three. On top of that, landlords will need to give four weeks’ notice before taking the case to court.

This could leave landlords without rent for over a year.

For many, this is unsustainable, especially when rental income is needed to meet their own financial commitments and could act as a significant barrier to investment in rented homes at a time when demand is high. Again, we’re actively engaging with the government on this concern.

Another element of the bill we feel needs further consideration is giving tenants more power to challenge rent increases at a tribunal.

Tenants undoubtedly need protection against unfair rent hikes, but this approach can actually act as an incentive to dispute rents fairly aligned to market rates. This is because the tribunal would not be able to make a decision that rent should be higher than the amount set by the landlord, and any rent increase would only come into force once the tribunal ruled on the decision.

Scotland, where a similar system was introduced, gives us a clue as to the volume of appeals that we could see if the policy is adopted in England. If the same pattern occurred, we could see a 4000% increase in cases going to tribunal.

However, Rent Service Scotland hears rent appeal cases in 21 days and relatively few cases are appealed at tribunal.  A similar role could be adopted in England by a body like the Valuation Office Agency (VOA), something that we’ve highlighted to the housing minister.

Critical of the previous government’s failure to pass the legislation, Labour is clearly eager to get the reforms over the line quickly. But, with the bill amounting to the most significant overhaul of the PRS in decades, they need to think carefully about making changes without bringing about unintended consequences for landlords, tenants and the housing market as a whole.

Russell Anderson is commercial director of mortgages at Paragon Bank