The private rented sector is not fit for purpose. This much has long been obvious to those working on the front line in Shelter’s advice services, and to our supporters.
Thankfully, it seems this is a reality increasingly dawning on our politicians too, with a growing number from all parties sharing our view that the sector simply doesn’t meet the needs of the 9 million people who now live there.
And on Tuesday, after much campaigning by Shelter and others, the Government finally joined that chorus. In an amendment to the Enterprise and Regulatory Reform Bill, the Government introduced measures which will make it compulsory for letting agents to be members of a redress scheme. This was effectively a compromise to an amendment tabled by Labour’s Baroness Hayter – who has pursued this issue doggedly down the years – which the Government opposed but were defeated on by 5 votes in the Lords in March.
So what does this all mean? At present, around 40% of letting agents are totally unregulated, operating outside of existing voluntary schemes. They have no obligation to provide renters with the basic consumer protections already required of estate agents, such as the right to redress should things go wrong.
The day to day reality of this is that the worst agents are effectively free to leave homes in disrepair, or to run off with people’s money, without facing meaningful repercussions. Even industry bodies describe much of the lettings market as akin to the ‘wild west’.
The Government’s amendment looks to address this by requiring all agents to be members of an ombudsman scheme, such as the TPO (The Property Ombudsman). This will provide the 66% of renters who use letting agents with guaranteed access to accountability in the event of poor service, giving them someone independent to take their complaint to.
It is unambiguously a good thing – and made possible by the nearly 800 Shelter supporters who wrote to Vince Cable, the Business Secretary, to voice their support.
Of course, the letting market is just a part of what is wrong with the rented sector. And this amendment will not solve all its ills, of which the lack of guaranteed independent redress is just one of many. For one thing, we would like the Government to have gone further and accepted Baroness Hayter’s amendment in full (which would have provided additional protections such as measures to prevent agents absconding with deposits or money that should be passed on to the landlord).
Nevertheless, it is a welcome start on which the Government deserves credit for seeing sense. And a vital acknowledgement that things have to change in the sector.
More importantly it is something to build on for the many remaining challenges ahead.
Renters may soon have guaranteed means through which to air their complaints – but we urgently need further action to tackle the root cause of those grievances.
The biggest of which, from the point of view of the renters we hear from, is undoubtedly the high, unexpected and unfair fees which letting agents often charge.
As far as Shelter is concerned, Tuesday’s welcome announcement was not the end of the matter. We will be working hard to ensure it is just the first step down a long road to making the private rented sector a better, more secure place to live.