How the Government is Planning to Reform the Rental Sector
The housing market is experiencing complete failure and desperately needs an overhaul. In response, the government wants to ensure the private rented sector is fairer and more transparent.
As a result, the government has made a number of commitments to reform and improve the entire rental sector.
As well as the upcoming tenant fee ban, these are some of the other changes the government may implement to reform the rental sector.
Rogue landlords database
In April 2018, the government set up a national database which lists all rogue landlords and property agents who have previously had banning orders. The intention is to ensure tenants are protected by keeping track of landlords who have previously rented out unsafe and substandard accommodation.
There have since been more calls by the housing industry, including ourselves, for the list to be made open to everyone. Currently, the list is only available to central and local government. To ensure greater transparency the list needs to be accessible by everyone. This is not only so tenants can specifically know which agents and landlords that have previously been banned, but also so letting agents such as ourselves can identify which landlords to not accept onto our books.
However, there also needs to be a rogue tenant database. Currently, the only way we can determine whether tenants have previously behaved in a manner which has led to significant costs for both agents and landlords is through running a credit check and looking for any County Court Judgements.
For inclusion on the list, tenants would have to have committed factors such as arrears, subletting without permission which puts the landlord at risk of breaching statutory obligation by overcrowding, making fraudulent claims for benefits, and significantly damaging the property.
Having a rogue tenant database would help create a more balanced view as to what is actually going on in the private rental sector.
Last year the government made an initial consultation to make the 5 year (EICR) Electrical Installation Condition Reports mandatory for all landlords, and it is likely that this will be introduced this year.
The government is placing more focus on electrical safety as a result of research which showed that tenants in private rental properties are more likely to face electrical shocks and fires caused by electrical faults than those in social housing.
As a result, the final legislation will need to make clear to landlords exactly what their responsibilities are when it comes to electrical safety to minimise any misunderstanding. The current legislation can cause confusion for landlords as there is no requirement to have an electrician to carry out an annual inspection for portable appliances but they do have an obligation to check their safety throughout the tenancy and not just at the start.
The mandatory five-year electrical installation safety inspections will ensure both landlords and tenants are protected should any electrical faults arise.
Review the rating system for health and safety
The government has also announced plans to undertake a comprehensive review of the current rating system used by local authorities.
Such factors which will be assessed in more detail include avoiding overcrowding by ensuring bedrooms are at least 6.5 square meters, and there’s suitable room to store rubbish bins outside the rental property.
The system that’s currently in place hasn’t been updated in more than 12 years, so the government is keen to reassess the measures taken so that serious health and safety risks can be properly identified and tenants are kept safe.
Mandatory redress schemes
While all letting agents are required to be a member of either the Property Ombudsman or the Property Redress Scheme, it’s not the same for landlords.
Although landlords can voluntarily join schemes such as the Housing Ombudsman, it is currently going through consultation stages with the government for all landlords to belong to mandatory redress scheme. It could even be made mandatory for landlords who operate through a letting agent, and not just private landlords.
This would mean tenants would have access to an effective dispute resolution should they need to. While the extra protection for tenants is something we support, it has to be properly thought-through for landlords too, as it could potentially lead to extra costs. The option of a pay per complaint model or a tiered fee structure based on portfolio size, as opposed to a flat membership fee, seems the most reasonable choice for landlords.
With these proposed changes for the rental sector, including the upcoming tenant fee ban, we’ve also made a number of changes to our platform to help landlords. We’ve removed our tenant fees and instead launched an all-in-one package available for landlords for just £12 a month.