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safeagent view: A bold, balanced approach to PRS reform is needed

3rd January 2023

Reform is a huge part of what we’re focused on at the moment. Whether it’s in Westminster, the Senedd or Holyrood, change is afoot for the private rented sector.

Since renting reform legislation was first mooted in the 2019 Conservative manifesto, we’ve had numerous policy reviews and consultations alongside unprecedented political upheaval. Along the way there’s been radical measures in Scotland, with a temporary rent freeze in place, and the Welsh Government has implemented new law which fundamentally changes the relationship between landlords and tenants.

Back in Westminster, Michael Gove has returned to DLUHC and confirmed a Renters’ Reform Bill will be brought forward in 2023. The White Paper from summer tells us broadly what the Bill will include, but the next few months will see draft legislation take shape before it passes through parliamentary scrutiny. So what would successful reform look like, and what do we need to watch out for as more details emerge?

There are some gaps and unanswered questions. A new rogue landlord register should help to separate the good majority from the poor performing and negligent few. However, the database as planned is missing a crucial element. Client Money Protection, a legal obligation for agents since 2019 and vital for protecting consumers from misappropriation and fraud, is notably absent from the defined offences in the database.

Likewise, the proposed new Decent Homes Standard for the PRS needs to be better joined up with existing regulatory frameworks. It’s hard to be against this idea in principle – but the current proposals fall short by failing to recognise the standards set by existing regulations, such as for gas and electrical safety, energy efficiency, and recent changes to smoke and carbon monoxide alarm requirements. Inconsistent or more complex regulation will only make it harder for landlords to know what their responsibilities are, and make enforcement harder too.

It’s one thing to introduce new regulatory powers, but local authorities need greater resources and clarity about how to apply them. The proposed new standards also appear stricter than existing requirements in social housing. This disparity needs to be addressed or we risk creating a two tier system.

A lot of what’s been trailed – including the measures above – will only be meaningful if they can be effectively delivered. It will be implementation that proves success, so local authorities, agents, landlords and tenants all need to advocate for reform and be willing to act on it.

How do we achieve that? We need a proportionate response to the issues which matter most to both tenants and landlords. Thankfully, Michael Gove and DLUHC seem to recognise this – with improved security of tenure promised alongside a decent degree of flexibility for landlords. This is a delicate equilibrium and we’ll no doubt see proposed amendments to the Bill which attempt to tip the balance one way or the other as it progresses through parliament.

As we both reflect on this year and look ahead to 2023, it’s also important we give credit where it’s due. The UK’s PRS is largely a dynamic and responsive part of the housing market – and one which plays a vital role in supplying good quality homes to a large proportion of the population. We must keep shouting about that and focus on learning from good examples, while stamping out bad practice from rogue operators.

In our role as a not-for-profit accreditation scheme, we see how agents are central to this mission. Alongside councils, local agents are often the ones who spend time reviewing, assessing and explaining changes in regulation – meaning that landlords can understand their responsibilities, and tenants know their rights.

We need to keep these conversations going and remind each other that we are all broadly calling for the same thing. I believe strongly that the Government’s reforms can achieve their objectives – which are largely commendable – but, in doing so, it’s critical we avoid an exodus of independent landlords from the market, which would make the housing supply shortage much worse.

If 2023 will be the year in which rental reform is delivered, then let’s also make it the year we work together to make a proper success of it.

By Isobel Thomson, safeagent’s chief executive, for Property Reporter.

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