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Rental reform legislation ‘golden opportunity’ to improve PRS but small landlords at risk, industry leaders say

  • 13/06/2023
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Rental reform legislation ‘golden opportunity’ to improve PRS but small landlords at risk, industry leaders say
Industry leaders have welcomed upcoming reforms to professionalise the private rented sector (PRS) but warned that piecemeal legislation could overburden small landlords.

The Renters Reform Bill includes measures to abolish Section 21 eviction notices, strengthen Section eight eviction notices, the legal right for tenant to request a pet, introduction of a Decent Homes Standard and mandatory landlord membership for an Ombudsman scheme.

There is also upcoming legislation around EPC regulation that could drive a minimum EPC rating of C for all rented properties.

Nathan Emerson, chief executive of Propertymark, the membership body for property agents, said that it supported the need to professionalise the industry to “stamp out bad practice and eradicate rogue landlords”.

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.”

This was echoed by Neil Cobbold, managing director of PayProp, who noted: “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.”


Legislation should protect tenants and give confidence to landlords

Cobbold said that the reforms should be delivered in a way that “allows 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 eight – 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,” explained Cobbold.

Generation Rent agreed, adding that the bill was a “massive step forward” for the 11m private renters in England.

“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.”

Cobbold added: “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.”


Small-scale landlords should seek partnerships to help come up to standard

Cobbold noted that increasing regulation in the PRS sector was not new, and such legislation had been applied in Scotland, but the volume means that “there has never been a better time for small-scale landlords to seek out partnerships to help them navigate the new landscape”.

He said that property ownership would still be a “sound investment for the vast majority of landlords who provide safe, secure and compliant homes” but landlords who do not have the time to invest in adapting to changes or the capital to bring properties up to standard may look 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,” Cobbold added.

Emerson continued 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”.

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