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To say that the Minister has a lot on her plate would be something of an understatement. As she ponders the Parliamentary year just passed, her mind will drift back to some unfinished legislative business in the form of the Renters (Reform) Bill – something that’s been described as the biggest shake-up of the private rented sector in a generation.
After a false start, the Bill had a First Reading in the Commons in May and many were expecting it to complete a Second Reading, where MPs could start scrutinising the Bill, before the recess – but for whatever reason, it wasn’t to be.
The Bill in itself is also a piece of unfinished business, as the Minister explained to members of the Levelling Up, Housing and Communities Select Committee. She spelt out that the department aimed to introduce some of the key measures currently missing from the Bill (including the Decent Homes Standard) as amendments when the Bill returns to the House of Commons.
A government Impact Assessment has estimated that, as the Bill stands currently, the proposed changes from assured shorthold tenancies to periodic, and the removal of Section 21 evictions are likely to cost letting agents £278.7m over 10 years, as a result of ‘reduced use by landlords’ because fewer tenants will be moving.
But if more significant measures are to be added to the Bill at the amendment stage, surely the impact on letting agents and the rest of the private rented sector will have to be re-calculated? After all, you wouldn’t make fundamental additions to your business plan without running the numbers to see if a new initiative is affordable. Something for the Minister to ponder during the summer break.
And while the Minister is expecting longer tenancies to result in less work for letting agents, she could be offering them opportunities by the same token.
The Bill proposes to make further regulatory changes – including the establishment of a Property Portal – which heavily underscores the benefits to landlords of using letting agents for property management and compliance.
And looking down the line, no matter which party wins the next election, reform of the PRS won’t end with this Bill. There will be new rules and regulations covering everything from energy efficiency to tax returns to additional anti-money laundering measures, plus secondary legislation to enact all the changes that are part of the Renters (Reform) Bill.
Inevitably, landlords are going to need support complying with an ever-growing range of new measures. Only 5% of English landlords dedicate themselves full time to the job, but getting up to speed on, and ensuring compliance with all of the new rules and regulations will be a full-time task.
Using professional letting agents who routinely verify compliance across their fully-managed portfolios is the obvious solution for landlords who can’t commit to managing their rental properties full time. The risk from non-compliance is great, ranging from hefty fines to banning orders, with new powers for councils to levy them.
But as far as the current Bill is concerned, all of us in the sector need more information from the government on how some of the proposed measures are going to work and when they are likely to be introduced.
What about the court reforms to speed up evictions? How will that work and when will they be introduced? Likewise, what about the Property Portal? When will we see that? And what powers will be wielded by the new ombudsman?
In order to prepare for change, everybody in the sector needs to know the details. Perhaps the Minister could think about that when she puts her feet up in a shady spot by the pool.
I wish her a happy and relaxing break and hope she comes back refreshed, renewed and armed with the answers the industry desperately needs.
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