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Under the skin of the letting market

Here we share news and views on both the local letting market in & around Oxfordshire and all planned and recent legislation.


The reform package for the Private Rental Sector


New reform package for PRS

The Secretary of State for Communities and Local Government (Rt Hon Eric Pickles MP) announced at the start of October his reform package for the Private Rental Sector, which includes a new Code of Practice and a Tenant’s Charter.

Here, we summarise what the new measures will do for the PRS:

Standards

– Property: The suggestion is to make clear to landlords what their responsibilities are in terms of maintaining acceptable standards of property (including considering a requirement for landlords to repay the rent where a property is found to have serious hazards), and making sure tenants know what standards they can expect. There is a concern that there is already existing legislation and that the issue is one of enforcement rather than bringing in new rules.

– Service: At the moment there is no legislation to regulate the operations of letting agents and only 60% of agents are members of a professional body or redress scheme. At Finders Keepers we think that if you licensed agents and forced them to have mandatory qualifications then services standards would improve as a result.

Regulation

We have long been supporters of agent regulation and licensing and so we were disappointed to hear that agents will only be required to belong to a compulsory redress scheme. Although this is a step in the right direction, it does little to protect the financial interest of landlords and tenants working with unregulated agents, with the argument being that compulsory registration fees would reduce investment and restrict choice for tenants.

Tenancy duration

With the increasing number of families entering the rental market, the measures are intended to offer more stability to tenants and also to cut costs (of renewing tenancies or moving property). The Commons Select Committee report suggested that in return for offering longer tenancies, landlords should be able to evict tenants much more quickly when they fail to pay their rent, rather than risk not being able to get their property back before the end of the fixed term (as seen in France and Germany). Mr. Pickles did state the need to ensure that the law-abiding, decent landlords need to be protected when tenants intentionally do not pay rent or damage their property. They also acknowledged the restrictions on buy-to-let mortgages need to be considered to allow landlords to offer these longer term tenancies.

Tenancy agreement

A model tenancy agreement will be developed by early 2014 which will clearly set out the right and responsibilities of tenants and landlords, in order for tenants to feel able to raise concerns with landlords about the homes they live in (without the fear of eviction). This new agreement should help both parties understand which clauses should be in any agreement and which are optional or unique to a property.

Tenant’s Charter

This will tell tenants what their rights are and what to do if they face problems. It will also promote awareness of what a tenant should expect when renting a property, including letting agents’ fees. Indeed, from the 1st November all property listings and advertisements are to list in full the fees a tenant would have to pay.

Build to Rent

Incentives are being offered to bring more developers into the market to build homes specifically for private rent. The logic behind this measure is that an increase in supply will provide more choice for tenants, increasing competition between landlords which they hope will lead to longer tenancies being offered and more professional landlords offering better standards of property.

Mr Pickles said: “[These] proposals will raise the quality and choice of rental accommodation, and sharpen the tools available to tenants and councils so we can root out the cowboys and rogue operators in the sector.”