Speaking in Parliament, Mr Shapps confirmed that with the private rented sector already governed by a well established legal framework, the Government has no plans to introduce any further regulations.
Instead, he urged councils to use the wide range of powers they already have at their disposal to tackle the minority of rogue landlords that blight some communities, provide a poor service to tenants and damage the reputation of the private rented sector.
Council powers include:
– Powers to require landlords to take action to rectify hazards in their property;
– Where landlords resist, the ability to make and charge for improvements and to prohibit use of the affected parts of the property; and
– Discretionary licensing powers to tackle areas blighted by poorly managed privately rented stock.
– New regulations were proposed by the previous administration in response to the Rugg Review of the Private Rented Sector, but have been judged by the new coalition to introduce too much additional red tape. These included a National Register of Landlords, regulation of letting and managing agents, and compulsory written tenancy agreements.
Grant Shapps said:
"With the vast majority of England’s three million private tenants happy with the service they receive, I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords.
"So today I make a promise to good landlords across the country: the Government has no plans to create any burdensome red tape and bureaucracy, so you are able to continue providing a service to your tenants.
"But for the bad landlords, I am putting councils on alert to use the range of powers already at their disposal to make sure tenants are properly protected."
David Brown, Commercial Director of LSL Property Services said:
“We want to see the whole private rented sector meet proper professional standards. Most lettings agents, including Your Move and Reeds Rains, had nothing to fear from regulation and may have benefited from the improved reputation of the sector – without having to change their procedures or approach to customers. Regulation would have plucked the bad apples from barrel, removing the minority of rogue agents who tarnish the image of the private rental market. Now the onus will be on landlords and tenants to vote with their feet. They should demand the best possible service, ditch rogue agents and seek out higher quality operators.”
Javier Carrillo, lettings manager at West End estate agency, LDG, said:
“It is extremely disappointing that the new Government has decided not to proceed with regulating lettings agents. We believe that this decision has massive implications for the property market; it means that anyone without the legal and basic property knowledge is able to set themselves up to practise as an estate agent. This increases consumer risk because their money might not be protected – unregulated agents don’t always have professional indemnity insurance or audited bank accounts, and many hold their client’s funds with their own business funds which offers no protection if the agents’ business fails. For regulated agents like us, it also creates unfair competition as these unscrupulous agents will try to win deals by overvaluing properties, offering fake properties to attract customers.
“Estate agents already have a bad reputation thanks to the detriment caused by some unregulated lettings agents. There is no reason why a good estate agent wouldn’t sign up to regulations to enhance their standard and differentiate themselves from the bad agents. What’s more, agents like us are already registered with self-regulatory schemes such as ARLA and NAEA to offer all of our landlords and tenants peace of mind at the time of instructing us.
“We receive hundreds of calls a day from prospective tenants, current tenants and landlords requesting advice which we are proud to give, because we have acquired the knowledge from the various legal and comprehensive courses that are required to be a member of ARLA and the NAEA.”
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