There was a time when the Conservatives saw the private rented sector as an untouchable business model not to be tampered with – not anymore!
Political reality has sunk in as the sector has doubled in size and now the Government has embarked on a series of changes in an effort to win over private tenants.
The launch of a consultation on extending tenancies to three years is but the latest in a series of initiatives, designed to show private tenants that this administration understands their needs and is willing to legislate on their behalf.
There is something akin to an arms race going on between the Conservatives and Labour as to who can offer tenants the most in terms of security and protections, while not totally alienating professional landlords.
Dealing with rogue landlords
In recent times the Government has introduced banning orders and a national database of rogue landlords and agents to make it easier for tenants to identify and report unsafe conditions, while also encouraging local authorities to act against them to protect tenants. The London Mayor has brought in a similar model for the capital.
Other steps being taken include banning letting fees to tenants and capping tenancy deposits and ensuring all letting agents are registered.
They are also looking at establishing specialist housing courts, taking landlord and tenant disputes out of the county court system where cases can take many months to come before a judge.
This causes problems for both sides adding to tenant insecurity and a landlord’s financial woes. The maxim is that ‘slow justice is no justice’ and they are looking to reverse this.
Next up for change are the rules governing Houses in Multiple Occupation (HMO).
These come into effect from 1st October but private landlords are being urged to prepare now for their introduction, which are designed to improve property conditions for residents.
All HMOs from that date with five or more people comprising of two or more family units will require a licence to operate.
Currently a HMO licence is only required if a property is over three or more floors, so the main change is the removal of the number of storeys from the HMO definition.
The Government estimates an additional 160,000 properties will need to be licensed in England as a result.
The new legislation also introduces minimum space standards for bedrooms, an area often abused by rogue landlords wanting to squeeze as many tenants as possible into their properties.
Recent raids and prosecutions in Brent, north west London have seen examples of 16 people living in a two bedroom flat and 35 people squashed into a three bedroom house, with some of the tenants forced to sleep in the garden with just a tarpaulin for shelter.
Minimum space requirements
In future, rooms providing sleeping for one adult must be no smaller than 6.51m2. And rooms sleeping two adults must be no smaller than 10.22m2.
Rooms slept in by children aged 10 or younger must be no smaller than 4.64m2.
Landlords must also provide adequate receptacles such as bins, for the storage and disposal of household waste produced by residents at the property.
Where minimum space standards are not being met, councils will be able to grant a period not exceeding 18 months for the landlord to rectify the situation.
This will put pressure on both landlords and on the enforcement officers employed by local authorities, particularly in areas with high numbers of HMOs like cities and seaside resorts.
Landlords are required to apply for a licence before 1 October and to comply with any changes needed to be made.
If, after this period they have not complied with the new scheme, then landlords face serious penalties, including hefty fines and criminal prosecution.
Typical of the action already being taken at a local level is the selective licensing scheme that goes live in Nottingham on the 1st August.
From that date private landlords with property in certain parts of the city will need a licence to show their property meets safety and quality standards set out in the conditions of the licence.
The scheme is being introduced into areas of the city where the council has gathered evidence of poorer property conditions and it covers an estimated 32,000 privately rented homes.
Will it work?
However, not everyone is pleased with the changes. David Cox, Chief Executive of ARLA Propertymark, commented: “Licensing doesn’t work and it never has done.
“The Government’s aims (improving the private rental sector) are laudable, but these policies are impractical. Licensing means councils spend all their time administering schemes, rather than enforcing against rogue, criminal landlords.
“Implementing standards for minimum bedroom sizes means small, cheap bedrooms will be taken off the market at a time when there’s an acute housing shortage. This will increase costs for other tenants living in the property, and means those who need or want these small, cheap bedrooms will be left without anywhere to live.”
He added “Coupled with the gradual removal of mortgage interest relief, new energy standards for landlords, and the ever-increasing fees for these schemes, means landlords are being hit from every side.
“At a time when the Government is concerned with rising rent costs, all its policies are just increasing costs for landlords, fostering a private rented sector where financial burdens due to ever-changing legislation will keep rising.”