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PRS Very Much On The Government Radar

March 18, 2013 | Landlord News  

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It has been announced that the All Party Parliamentary Group for the Private Rented Sector is to launch an inquiry into raising standards and regulation of the private rented sector. The secretariat to the group is the Residential Landlords Association.

Housing minister Mark Prisk told the group last month that the Government’s key objectives for the PRS was to make it “bigger and better”. This new inquiry is set to get underway as the ongoing inquiry by the cross-party committee at Communities and Local Government into the PRS enters its final stages.

All interested parties are being called upon to provide their views on how standards in the sector can be improved and how regulation can best be implemented to safeguard and satisfy all concerned. A report will be put together with recommendations and presented to ministers.

In addition to written submissions, meetings will hear from invited experts, the first of which is scheduled for May 14, which will be discussing the topic of improving safety in the PRS.

Chairman Martin Vickers, MP for Cleethorpes, said, “All the official figures show that the private rented sector is now the only housing tenure growing. Whilst good news for those in need of a home as well as supporting economic growth, this increase in the size of the sector needs to be sustainable.


“Growth of this kind naturally increases choice for tenants who may then be able to avoid poor-quality stock.

“This inquiry, however, will assess how to ensure that this is matched by measures that improve safety in the sector as well as securing a regulatory system that supports growth, whilst rooting out the minority of landlords who bring the sector into disrepute and cause misery for tenants.

“I would encourage all those with an interest to have their say.”

So, if you have something you wish to say on these subjects, you are invited to provide written submissions of no more than 1,500 words by May 1 to Ed Jacobs by emailing admin@prs-group.org.uk

Though foiled in her first attempt in January, Labour peer Baroness Hayter’s proposal – an amendment to regulate letting agents by bringing them under the scope of the Estate Agents Act – just about scraped through second time around. The majority was very slim – only five – with 211 in favour of the proposal and 206 against.

The votes were divided very clearly along party lines. It will be interesting to see how this divisive amendment plays out when brought before the Commons. If the amendment is approved by the Commons, all letting agents will be forced to belong to an ombudsman and could be banned by the Office of Fair Trading, which presently does not recognise letting agents as estate agents. It would also prevent banned estate agents from trading as letting agents.

Although the proposal has taken a step further than in its previous attempt, Government opposition remains strong. Speaking last week, Viscount Younger of Leckie, parliamentary under-secretary at the Department for Business Innovation and Skills, made clear that boosting the supply of rented homes means avoiding excessive regulation. He said, “Excessive regulation, however well intentioned, can result in precisely the outcomes we want to avoid. That is why we did not proceed with the proposals of the previous Government, such as a national register of landlords and the full statutory regulation of letting agents.”

“We have heard a number of people express the view that the lettings market is totally unregulated. That is not in fact the case.” He then highlighted legislation such as the Unfair Trading Regulations, and Unfair Terms in Consumer Contracts Regulations.


He continued, “We know that trading standards bodies use these powers to prosecute lettings agents. Some very substantial fines, and indeed prison sentences, have been handed down to agents who engage in serious misdemeanours, such as misrepresenting their membership of professional bodies, or indeed misappropriating clients’ money.”


He strongly supported “making better use of existing regulations before we create new ones”.

However, supporters of the bill are supremely confident. Ian Potter, managing director of ARLA, said, “We all look forward to working with the Government on the Bill as it moves back to the Commons for final approval.”

Property Ombudsman Christopher Hamer said, “This will mean greater protection for a number of consumers.”

It remains to be seen which way the wind will blow in the Commons, but it could well be marginal again.

As if that wasn’t enough PRS news from Westminster, the topic of landlord licensing has cropped up again. This time, MPs have been advised that compulsory licensing of private landlords is not necessary.

Councillor Jonathan Glanz, cabinet member for housing at Westminster City Council, told a committee that sufficient powers for dealing with rogue landlords already exist. He said, “The majority of landlords in Westminster do provide decent homes but there are powers in place which we, and other local authorities, can call upon for when landlords renting privately to tenants in their area do not play by the rules.

“Last year, council officers in Westminster carried out more than 1,500 inspections resulting in 206 legal notices being served and seen prosecutions, with hundreds of homes being made safe in the profess.

“So, we do not believe in burdening the vast majority of landlords who are law abiding with further regulation and red tape, but instead concentrate our efforts on targeting the rogue landlords who are acting criminally, to ensure the safety and wellbeing of tenants renting in the private sector.”

The Communities and Local Government inquiry into the PRS continues on Monday with a session held in Leeds, then the next Monday in London. Invitees include the National Union of Students and the National Landlords Association. The cross-party committee is chaired by Labour MP Clive Betts.

 

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