During his speech at the 2017 Conservative Party Conference in Manchester, communities secretary Sajid Javid announced a raft of proposed lettings regulations while also revealing that the proposed lettings fees ban legislation is about to be published.
The most radical it seems of the new proposals is to make it mandatory for letting agents to join a professional organisation and “meet certain minimum standards”, effectively introducing regulation of the industry by the back door.
Sajid also said that although his party want to see more people own their homes, he admitted the chance of achieving this for many millions of Brits is now much slimmer than for previous generations. “People are three times more likely to be renting than before,” he said.
As well as saying that all agents must be regulated, he also revealed several measures aimed at strengthening the rights of those people who rent.
So what about the new redress scheme?
This would involve requiring all landlords to join a national redress scheme which would enable tenants to complain about poorly managed properties and rogue landlords, as well as a housing court where grievances will be heard and judged.
Also, as well as a compulsory minimum 12-month rental period for those who want it, Sajid revealed that he will seek to introduce a minimum three-month notice period for landlords seeking no-fault notices to quit.
His measures are not a surprise to most, problems within the lettings industry have been well publicised for some time now.
Recent research by Homelet revealed that 28% of tenants are not happy with their landlords while over 80% of tenants say they intend to rent for more than a year and only 8% want to rent for just six months.
What do the professional bodies say?
After 20 years of our campaigning falling on deaf ears, we’re very pleased the Government has taken the decision to regulate the private rented sector, says David Cox, CEO of ARLA Propertymark.
“This will be the single greatest step forward in a generation, in terms of consumer protection for private tenants, and will do more to clean up the image of the industry than the hundreds of smaller laws and pieces of legislation introduced over the last 20 years. However, regulation can take different forms and we need to see the detail of proposal to be confident that it will be effective for tenants and landlords.”
Isobel Thomson, NALS CEO said in response:
“The measures in the Minister’s speech are very welcome news, giving clear confirmation that the Government is adopting a coherent, strategic approach to the Private Rented Sector for the benefit of consumers,” she says.
“NALS and the Fair Fees Forum called earlier this year for both the fee ban and introduction of mandatory client money protection to be framed within wider regulation as the only way to ensure that all agents meet the same requirements and consumers are protected. We are delighted that Government has listened. We look forward to engaging with Government to take forward all of the measures they have announced.”
J B Henderson M.D. Acorn Properties (Jesmond) Ltd.
Sadly, the government are overcomplicating yet again. On one hand they complain they do not have the money to restructure and on the other hand they say they need to restructure. There is a statutory mechanism in the British Constitution called the 10-minute Bill. All they have to do is propose that any person (or body company etc.), that markets a property for sale or for rent, must be a member of an accredited body (i.e. NALS, ARLA, NAEA etc.). Whereas there is an opportunity for more agencies to be created, there are already enough choice currently available. Then everyone in the industry would be accredited, have client money protection, full recourse via a property ombudsman and anyone acting outside of the law or the accreditation guidelines would be excluded and no longer allowed to rent or sell and fined appropriately. The cost to the government NOTHING! The benefits to the government; A fully compliant and regulated sector. A vast reduction or complete removal (unfortunately unlikely) of rogue landlords, More tax revenues (from tax and fines for non-compliance) and a safer and fully regulated market sector.