Reforms herald a brighter future for tenants

Millions of tenants will get a better deal when they rent a home under new plans to help hardworking people according to the Minister for Communities and Local Government, Eric Pickles.

Under a new set of reforms rogue landlords will be targeted in a new drive to stop people being ripped off when they rent a flat or house.

The ambitious package of proposals will ensure England’s 9 million private tenants:

• avoid hidden fees from unscrupulous letting agents

• get proper protection from rogue landlords

• can request long-term rental deals that cut costs and provide stability for their family

• feel confident to demand better standards and management of their property by landlords

The proposals reinforce existing policies, including the £1 billion Build to Rent scheme, which is delivering newly-built homes specifically for private rent.

As part of the second round of the Build to Rent scheme, bidders are encouraged to offer longer-term, family friendly tenancies as part of the mix of rented accommodation being offered.

Eric Pickles said:

“The private rented market is a vital asset to this country. It’s an important option for the millions of people who want a bit more flexibility, or to simply save up for a deposit so they can buy a place of their own.

“This government is on the side of hardworking people and the last thing we want to do is hurt tenants and kill investment by increasing costs and strangling the sector with red tape. But tenants deserve better value for money, and dodgy landlords should be under no illusion they can provide a shoddy service with impunity.

“Today’s proposals will raise the quality and choice of rental accommodation, and sharpen the tools available to tenants and councils so we can root out the cowboys and rogue operators in the sector.

“These measures will also give tenants the know-how to demand longer-term tenancies that cut costs and meet their needs – and when things do go wrong, the confidence to take action without fear of eviction or harassment.”

Mr Pickles announced that:

– Within days, he would publish new regulations that will force letting and property management agents to join a compulsory redress scheme. 3,000 agents, 40% of the entire industry, have yet to join one of the schemes, which will ensure tenants’ complaints about hidden fees and poor service are investigated independently, and where a complaint is upheld, they receive compensation.

– Revealed that, for the first time the government will publish a new code of practice setting standards for the management of property in the private rented sector, with a view to making it statutory to provide greater confidence for tenants in what they can expect.

– Announced he will publish a draft of a new tenant’s charter. The charter will help tenants understand what they should expect from their rental deal, and how they can take action if they are the victim of hidden fees or poor standards of accommodation.

– Set out the timetable for the introduction of a model tenancy agreement, which landlords can use to offer longer tenancies of 3 years or more, which will, provide extra security and stability for families.

– Committed to produce extra guidance for local councils on how to protect tenants from illegal eviction, how to push for harsher penalties before magistrates for housing offences where these have a real impact on peoples’ lives, and to plan for new private rented developments in the future, including on their own land.

The Secretary of State also announced that:

• A mortgage lenders summit will consider how lenders can make it easier for landlords to offer longer tenancies that benefit families.

• The government will review the process by which tenants can raise concerns about the standard of their private rented property and the response they should expect from their council in enforcing standards of safety and hygiene

• The review will also consider requiring landlords to repay rent where a property is found to have serious hazards. This could include allowing councils to recoup housing benefit so that taxpayers’ money is not used to support landlords who provide sub-standard property.

The new package will support existing measures to improve the private rented sector, including:

• The £1 billion Build to Rent scheme, will deliver newly-built homes specifically for private rent – and, as part of the second round of the scheme which is currently open, bidders are encouraged to offer longer-term, family friendly tenancies as part of the mix of rented accommodation being offered.

• A £3 million fund for councils in England will help them tackle acute and complex problems with rogue landlords, and build on work to tackle ‘beds in sheds’, where £2.6 million was provided to 9 councils and backed by a ministerial task force. More than 500 illegally rented outhouses have been discovered since 2011 and action is being taken against the owners.

• The Legal Aid, Sentencing and Punishment of Offenders Act 2012 will provide magistrates’ courts with the power to impose unlimited fines on landlords who are found guilty of not meeting their statutory responsibilities. These powers will be complemented by Schedule 16 to the Crime and Courts Act 2013, which will allow the courts to take account of an offenders assets as well as his income which will help tackle rogue landlords who have limited documented income but significant assets.

• The Mortgage Repossessions (Protection of Tenants etc.) Act 2010 has increased protection for tenants from repossession if their landlord faces mortgage difficulties.

Published on the 16th October 2013: the draft tenants charter and the government’s response to the Communities and Local Government Select Committee’s report on the private rented sector.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/251148/Draft_Tenants__Charter.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/251147/CM_8730.pdf

Further information

Reducing costs for tenants

Rents in the private rented sector are falling in real terms, both in London and across the country, but tenants can still face unfair costs. Today’s package will address this through:

A new tenants’ charter

• The charter will ensure all tenants know what to expect from their tenancy and, if something goes wrong, where to go for help.

• It will clearly explain how tenants can ask for longer tenancies. Longer tenancies cut costs by helping tenants avoid the fees associated with contract renewals and moving between rental properties – these upfront fees are typically around £300 but can be higher.

• Longer tenancies will also give families greater certainty and security, especially for those with children at school.

Ending hidden fees

• The charter will set out how tenants will be able to demand transparency on lettings agents’ fees, and how to take action if agents introduce hidden fees.

• New legislation will make it compulsory for all letting agents to belong to a “redress scheme”. This will ensure tenants’ complaints about hidden fees and poor service can be investigated independently, and where a complaint is upheld, receive compensation.

Model tenancy agreements

• A new model tenancy agreement will provide tenants with a clear guide to rental contracts.

• Tenants will now be able to identify which clauses in their agreement are optional or unique to that property. This will help tenants negotiate longer fixed-term tenancies and demand greater certainty over future rent rises.

Better value for money from rental homes

Tenants deserve value for money from their rental deal. That means homes that are properly managed, safe and well maintained. Today’s package will introduce a new:

Code of practice

• The code of practice will address the management of property in the private rented sector, setting out the standards landlords and property managers should meet.

• This responsibility includes maintaining the property to an acceptable standard, and ensuring tenants do not have to pay for repairs out of their own pockets.

• This will be made statutory using existing powers.

A review of standards in the private rented sector

• The government will ensure there is a robust system in place to check that tenants’ homes are safe, with appropriate standards of hygiene and sanitation, and protection from damp and excess cold.

• We will also review the current process for tenants to raise concerns about the condition of their property with their local council, and what they should expect in response, which is not widely understood.

• The review will look at how councils inspect properties, how they can demand landlords carry out maintenance, and how they can take action against landlords who continue to rent out dangerous and unacceptably dirty properties.

• In particular, the review will consider requiring landlords to repay rent where a property is found to have serious hazards. This could include allowing local authorities to recoup housing benefit so that taxpayers’ money is not used to support landlords who provide sub-standard property.

Protecting tenants from rogue landlords

If tenants do suffer at the hands of unscrupulous landlords, they need protection and a clear route for taking action. In addition to ending hidden fees and reviewing standards in the sector, today’s measures will also provide:

Help for councils to protect tenants and prosecute rogue landlords

• Tenants must feel able to raise concerns about the homes they live in, without fearing reprisals from their landlord.

• New guidance will clearly set out the role of public authorities in protecting tenants from illegal eviction and harassment, so tenants have the confidence to demand the service they deserve.

• We will produce a best practice guide for councils on how to prosecute landlords for housing offences. This will explain how councils should demonstrate to magistrates that offences are not merely technical breaches of housing legislation, but grave neglect of duty that makes tenants’ lives a misery.

Boosting the quality and choice of rental homes

The private rented sector is a vital part of the housing market and growing in importance.

However, investment to expand the sector has traditionally been on a small scale by individual landlords. The government has established the Private Rented Sector Taskforce to encourage long-term institutional investment and professional landlords into the market. The taskforce is facilitating the introduction of ground-breaking initiatives, including:

£1 billion Build to Rent Fund and £10 billion of Housing Guarantees

• This new approach will revolutionise the way new homes are delivered for the rental market and improve choice and quality for tenants.

• The Build to Rent fund has already identified forty-five potential schemes, and £10 billion of government-backed guarantees are starting to attract institutional investment in the sector.

• Boosting the supply of rental homes, backed by a sensible regulatory framework, will support longer-term tenancies, and increase competition between landlords offering decent, reasonably priced accommodation.

• Increasing competition between landlords will also lead to longer tenancies, stable rents and more professional landlords.

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One thought on “Reforms herald a brighter future for tenants

  1. Paul Smith

    Paul Smith, CEO of haart, comments on DCLG’s announcement into improving standards of lettings agents and landlords:

    “We very much welcome any reforms that make life more difficult for the rogue landlords and unscrupulous lettings agents that give the rest of the industry a bad name. We are committed to an open and honest approach with tenants and are keen to see them properly protected.
    “A new code of practice, setting standards for management of property in the private rented sector, while a positive step in the right direction, in our view does not go far enough. Most honest agents will already be working to a code of practice and we believe that enshrining these principles in law is the best way to rid the industry of dishonest landlords and agents.”

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