A year ago, Theresa May used her speech at Conservative Party Conference to commit to intervening in markets which aren’t delivering as they should. At the time, we wrote on this blog about how this could potentially be good news for the millions of renters who are battling a dysfunctional rental market. It seems we were right to hopeful. At the weekend the Secretary of State for Communities and Local Government announced a range of measures aimed at improving the rights of tenants.
This commitment was also trailed by the Prime Minister on Sunday morning. What was striking was the marked shift in tone around renting and, crucially, government’s role in delivering for renters. During her interview the Prime Minister said the government had ‘listened to what people said at the election’ and identified renting as a key area of focus. Perhaps she’s also seen analysis of the increasing importance of renters as a political force.
Either way, it’s a significant moment. We’ve been a slightly broken record on this topic in recent years, reiterating that fact that the face of renting is now unrecognizable from what it was a decade ago and that the private rental market is no longer fit for purpose. We’re excited to hear the Prime Minister acknowledging this evolution of the rental market and responding to it with a range of proposals for reform.
As ever with political announcements, the devil will be in the policy detail. But on the face of it there are some genuinely exciting opportunities:
We like the idea of creating a dedicated Housing Court, which would solve one of the biggest challenges in the private rented sector (PRS) facing both landlords and tenants. As it stands, a growing number of cases are going through increasingly overstretched courts, pushing the system to breaking point. It can take a very long time to get a court hearing date and there are horror stories of cases being allocated insufficient time, or being heard by someone not a housing law expert, only to be adjourned, sometimes for months. The situation isn’t good for anyone. Having a dedicated Housing Court should, as the Secretary of State said, provide ‘faster, more effective justice’ and hopefully put an end to protracted disputes.
Landlords and redress schemes
Similarly, the compulsory registration of all landlords with a redress scheme should ensure that all tenants have an avenue for resolving issues much quicker. Often tenants don’t have a sufficient avenue for redress, which not only breeds resentment, but leaves renters living in inadequate and sometimes unsafe accommodation. And unfortunately, existing redress schemes are inadequate when it comes to compelling landlords to meet legal obligations such as carrying out repairs. Indeed, access to a redress scheme shouldn’t override a tenant’s right to compel a landlord to carry out repairs, as offered by the ‘Fitness for Human Habitation’ Bill. But strengthening tenants’ hands and equipping them with better tools for resolving problems is surely good news.
Regulating letting agents
Proposals to require all letting agents to be regulated are also very welcome. This is something that has been recommended by key players in the lettings industry, including the National Approved Letting Scheme (NALS), as a way of raising standards in the sector. Through our services we see the consequences of the current lack of regulation; some of the worst practice we see is committed by letting agents, rather than landlords, meaning this change could offer meaningful protection to the people we help.
The one disappointment for us is on security of tenure; the government is planning to give incentives to landlords to offer 12-month tenancies. Given that the majority of tenants have 12-month contracts already, it isn’t clear why the government plans to incentivise something the market is already delivering. Additionally, our priority when considering reform of the renting market is making sure that low-income families will be able to share in the benefits. Given what we know about the discrimination faced by low-income renters and families generally, we are sceptical that incentives are really the way to deliver for the ‘ordinary working people’ the Prime Minister wants to help. It is much more likely that it will improve the situation for ‘safer bets’, such as young professionals.
These plans also feel like a watering down of the plans previously announced in the Housing White Paper – namely incentivising Build to Rent landlord to offer tenancies of three years to all tenants. In her interview, the Prime Minister specifically raised the issue of short tenancies, acknowledging how unsettling these can be for renters and highlighting the fact that many more people will be renting longer term. The government will need to be bolder on this issue if it is going to deliver proper security to renters.
Overall, it has the potential to be an impressive package of policies which could tackle some of the biggest issues in the PRS and bring about genuine reform. We’re looking forward to working with the government on delivering this reform and improving the rights of renters.