Renters (Reform) Bill ‘a golden opportunity to improve standards in the PRS’

Industry leaders have welcomed moves to ‘professionalise’ the Private Rented Sector through measures like the Renters (Reform) Bill but some have warned the government not to over-burden small landlords with ‘piecemeal legislation.’

“Anything that drives up standards can only be seen as a good thing for the PRS but the lack of reassurances and detail in these reforms risks some landlords selling up at a time when rental properties are urgently needed,” cautions Neil Cobbold, managing director of PayProp UK, the client accounting and automated rental payment specialists.

And this view was supported by another of the industry’s leading figures, Nathan Emerson, chief executive of Propertymark, the membership body for property agents.

“Propertymark supports the need to professionalise the industry in order to stamp out bad practice and eradicate rogue landlords,” he said.

Increasing burden

Emerson added: “With nearly half of all landlords in England only owning one property, there is a concern that ongoing piecemeal legislation may add further pressure on small portfolio landlords and will be unmanageable and unenforceable.” 

The Renters Reform Bill has been described as the most radical shake-up of the PRS in a generation and proposed measures include:

• The abolition of Section 21 (so-called ‘no fault’) evictions and the strengthening of Section 8 evictions;
• A legal right for tenants to request a pet in their rented home;
• The introduction of a Decent Homes Standard;
• Mandatory landlord membership of an Ombudsman scheme.

“These reforms should be delivered in such a way that they allow tenants to feel protected and landlords to feel confident that the sector is viable. The abolition of Section 21, which currently allows landlords to gain possession of their property without giving a reason, may be a worry for some landlords – but it is a genuine concern for tenants. The strengthening of Section 8 – which allows landlords to evict on a number of grounds including anti-social behaviour, arrears and needing to sell – should offer reassurance to the legitimate concerns of landlords while affording tenants more protection than they currently have,” said Cobbold.

This sentiment is echoed by tenant rights group Generation Rent, who say, “The Renters (Reform) Bill is a massive step forward for England’s 11 million private renters. The abolition of arbitrary Section 21 evictions and the need for landlords to have a legitimate reason to get their property back will give tenants confidence to report problems about their home and plan their lives more easily.”

According to Cobbold, “The Renters (Reform) Bill is a golden opportunity to get these reforms right, but credible enforcement is key. Property professionals have pointed to a ‘postcode lottery’ across the country when it comes to enforcing current rules, which allows rogue landlords and agents to operate. We urge the government to address this as we see very few proposals to ensure better enforcement.”

The Renters (Reform) Bill is not the only piece of forthcoming legislation to affect the PRS. New Minimum Energy Efficiency Standard (MEES) regulations are likely to become law in the near future, although the Government has not yet given a firm date when the new rules will come into force. The proposed legislation – part of the Government’s pledge to achieve Net Zero by 2050 – will lift the minimum Energy Performance Certificate rating for all homes in the PRS from the current level of ‘E’ to ‘C’.

“A considerable number of smaller-scale landlords will struggle to find the funds to improve the energy efficiency of their properties and the UK Government must ensure that adequate funding is available to be able to achieve this,” said Emerson.

Upcoming changes

“Increasing regulation in the PRS is nothing new; indeed, many of these reforms in England have already been seen in Scotland and did not result in a collapse of the private rented sector. But the volume of upcoming changes means there has never been a better time for small-scale landlords to seek out partnerships to help them navigate the new landscape,” said Cobbold.

“Property ownership will continue to be a sound investment for the vast majority of landlords who provide safe, secure and compliant homes. But landlords who may not have the time to invest in adapting to these changes, or the capital to ensure their properties are up to standard, may be looking to sell.

“Those landlords currently self-managing will find that professional letting agents and landlords make a perfect match. The agents have the managerial expertise to get optimal return from their landlords’ valuable assets, protect them from the penalties of non-compliance and ensure their tenants have a great rental experience.” 

And Emerson added: “We believe that full mandatory government regulation of sales and letting agents is the quickest and most effective method to eliminate unprofessional, unqualified and unethical agents and raise standards across the whole of the private rented sector.”