Propertymark’s voice heard in Renters’ Reform

The Levelling Up, Housing and Communities Committee has reviewed the White Paper outlining the UK Government risks undermining its own proposed tenancy reforms with MPs in the Committee debate agreeing on areas and concerns Propertymark has highlighted. 

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We are also pleased to see our evidence-based proposals being listened to with Propertymark referenced 24 times in the report.

The Committee joined us in recommending a review of the impact of recent tax changes in the buy-to-let market to help inform the UK Government of how changes will spur investment and make it more financially attractive to smaller landlords. 

With the move to periodic tenancies and ending the fixed term, the Committee is recommending the UK Government retain fixed-term contracts in the student private rented sector (PRS).

Housing supply

The proposed reforms to the PRS will reduce the supply of rented properties and we are glad to see the Committee has stated that the proposals do not seek to address the structural cause of the affordability crisis – the chronic undersupply of housing. 

However, the response also finds heavily in favour of repealing Section 21, recommending action to help combat unfair eviction and insecurity of tenure. To avoid grounds being exploited by bad landlords and becoming a backdoor to “no-fault” evictions, they recommend that the UK Government:

  • increase from six months to one year the period at the start of a tenancy during which the landlord may not use either ground
  • increase from three months to six months the period following the use of either ground during which the landlord may not market or relet the property

While worrying, this is not a true reflection of the UK Government’s intent just a Committee’s response, it is an essential factor in the progress of a Renters' Reform Bill which should be listened to.

Housing Court

Other areas forming part of the Committee’s recommendations are topics Propertymark has long called for, specifically a specialist housing court. Landlords need confidence that they can regain possession after issuing a Section 8 and the capacity of the courts is the biggest obstacle to this. 

We are also concerned the UK Government does not fully appreciate the extent to which an unreformed courts system could undermine its tenancy reforms. The report also clearly highlights the importance of ensuring the courts are reformed before Section 21 is abolished.

Decent homes standard

There is also agreement that the decent homes standard should apply to the PRS, but the standard must work for the different types of property and although the Committee’s report highlighted energy efficiency targets there was little mention of them in the White paper. Additionally, MPs and the UK Government are failing to understand that unless grants and incentives are there for landlords the targets won’t be met. 

Local Housing Authority rates 

We have been calling for LHA rates to be raised to keep pace with market rates, after they were frozen between 2016 and 2020, and have not risen since the pandemic. This will make the PRS affordable for those with the lowest incomes. We are therefore glad to see that the Committee has taken a strong stance to increase LHA rates back to the 30th percentile and commit to a review into whether they should be realigned with the 50th percentile.  

Read the Commons Committee Report on Reforming the PRS →

It is concerning that the Committee has recommended that the UK Government introduce a single ombudsman for the whole of the private rented sector without considering its impact. Such a significant change needs thorough consideration of the implications on the system as a whole. 

Alongside letting agents, sales and managing agents are also currently legally required to belong to one of the existing redress schemes, therefore removing these schemes and replacing with one for letting agents and landlords will have knock on effects for the housing sector which the Committee has failed to realise. What is needed is a single-entry point for all housing related complaints and for the UK Government to extend the requirements for redress to landlords who are fully managing rented property only. 

The report could have gone further to acknowledge the need for regulation for letting agents and a wider approach that incorporates the six government departments that interact with the private rented sector to create a long-term strategy for the future of renting. For us to find a long-term solution, we must look holistically at the scale of the challenge and be realistic about the level of reforms needed.

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Timothy Douglas Head of Policy and Campaigns | Propertymark