The Lettings Industry Council (TLIC), formed by industry stakeholders from across the Private Rented Sector (PRS), has issued a report that makes recommendations based on the expected changes to be introduced in the Renter’s Reform Bill.
The report, released today, aims to help the government understand what can work in practice and to encourage a PRS that works for all.
The report considers what changes could be made to smooth the path for the abolition of section 21 notices, improvements to the court process, as well as ways to improve property conditions and help those locked in tenancies and unable to move due to financial constraints.
Some of the report’s key recommendations include:
+ Every tenancy should have a written tenancy agreement in place or at the very least a written Statement of Terms. In the absence of either of these then the Government’s model tenancy agreement should be used as the default agreement.
+ A review of the accelerated procedure is needed to reduce the listing of PRS claims and prioritise these cases so they can be taken out of the system without delay.
+ Clarifying the route for dealing with abandonment cases, enabling a process without recourse to the court to further reduce unnecessary court cases where a tenant has clearly already left the property.
+ Prioritising cases with high or persistent rent arrears, dropping review hearings, and employing more judges will further reduce the workload and strain on the courts.
+ Mediation should be a recommendation in all cases, other than where there is evidence the tenant cannot afford to pay the rent. Costs can be kept to a minimum and could reduce court hearings by up to 25%.
+ Government should consider its own bond/loan solution or finance local authorities to issue their own bond guarantees. This option could be available solely for tenants on Universal Credit and/or in receipt of specified benefits to ensure that the deposit problem is specifically targeted to the right demographic.
+ By embedding use of the Unique Property Reference Number (UPRN) within the Renter’s Reform Bill discrete data points across different existing public and private databases can be joined together. Property safety records can be captured and collated within a property portal, to form one comprehensive safety record delivering a safe property at low cost. A property portal linked to a landlord redress scheme will ultimately provide a Landlord Register enabling direct communication with landlords and education on property safety, legislation and better remote enforcement.
+ A Regulator for Regulation. The sector is like a puzzle with lots of pieces that need to be joined up. A regulator would tie all of the pieces together – tenants need one portal door to enter which then signposts them to where they need to go.
Theresa Wallace, chair of TLIC, commented: “Each year, in an attempt to combat some of the issues experienced in the private rented sector, including sub-standard properties, rogue and naïve landlords, and untrained agents, more and more legislation has been introduced, confusing even diligent landlords with the complexities in providing a rental home.
“So far, these changes to legislation, which often come at a financial cost to the landlord, have just compounded the problems further and is a core reason given for why landlords are exiting the sector, leaving a shortfall of available rental properties.
“As a result, in 2022 we are experiencing the biggest crisis we have seen surrounding the shortage of rental property. We need to encourage investment into the market and that includes private landlord investment.
“The Renter’s Reform Bill provides a once in a generation opportunity to improve the lives of Renter’s. However, in order to achieve maximum impact and create true strategic change, we believe it is crucial to phase in these significant changes in a considered manner over a period of time, avoiding unexpected unintended consequences which only hurt those we are seeking to protect the most – tenants.
“This report seeks to find a balance between encouraging investment in the sector to increase available homes and ensure they are of consistent good quality through natural supply and demand competition.”
You can read the full report by clicking here.
And this is the own goal created by pressure groups, without a change in attitude and direction by regulators, PRS will continue shrink for being totally one sided against the hand that provides housing …
“The Renter’s Reform Bill provides a once in a generation opportunity to improve the lives of Renter’s.
How about for renters and investors?
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With rents at an all-time high, partially driven by the shrinking stock, I’d argue it’s one of the best times to be a LL. Yes, there’s lots of regulation & compliance but, guess what, that’s what great agents are for. Approximately 50% of landlords don’t use an agent and that needs to change.
Yes, the removal of mortgage interest relief hit some hard but, again, around 50% of Landlords don’t have a mortgage.
A more regulated, effectively-enforced and professional marketplace is good for quality landlords & agents alike.
Looking at some Zoopla data the other week, in most regions the rental income is over 200% return on the interest of a 75% LTV BTL mortgage.
We honestly have to stop doom-mongering this (do you not think this is one of the primary drivers of landlords leaving) and look at the benefits these changes could mean to a more professional and effective PRS.
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With your apparently poor understanding of the industry, you really should stop saying nonsense like “stop doom-mongering“.
Increased regulation and legislation severely discourages both landlords and investors, especially the smaller landlords (1-4 properties) who make up 83% of the market (in 2018). Do you know how much legislation has come out since 2015? 30 pieces of legislation, indeed the NRLA did a great piece on this titled “Not under-regulated but underenforced“… I suggest you give it a read.
And you are such an expert in investment that you can categorically say that because you “had a look on Zoopla” SOME landlords COULD achieve up to a 200% return on their 75% LTV mortgage? Because:
1, This applies to everyone everywhere right?
2. Because you obviously know how much has been invested in terms of works and have just what, written that number off?
I suggest you educate yourself a little more on the costs involved for letting a property.
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Here is some doom and gloom ….
I was forecasting not before Winter 2022 but this month we have seen a spike in rent arrears and this is with tenants on old affordable rent, none of the silly new stuff. All claim that cost of living is already biting, in particular fuel prices and food.
How bad is it today …. 20% of renters on our books are now in arrears today. Two months ago it was 5% and from employment lost/Covid related.
Maybe not a good time to be a landlord if you are over zealous with rent expectations.
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