Eric Pickles to better regulate landlords and letting agents

Plans include forcing letting agents to join a redress scheme allowing complaints about poor service or hidden fees to be independently examined.

The government is preparing to announce rules to better regulate the private rented housing sector, including a requirement that all letting agents join a new compulsory redress scheme.

The redress scheme, requiring new legislation, would allow complaints about poor service or hidden fees to be independently examined, and where a complaint is upheld, receive compensation, the communities secretary, Eric Pickles, will say, building on announcements made at Conservative party conference.

At present 3,000 letting agents, 40% of the entire industry, have yet to join a voluntary redress scheme.

Pickles will also publish a new tenant’s charter on Wednesday as well as set out details of a new code of practice setting standards for the management of property in the private rented sector, with a view to making it statutory.

The plans stop short of a full register of private sector landlords proposed by Labour, but shows the extent to which ministers have recognised that an unregulated private rented sector is hitting the cost of living, and exaggerating problems in the housing market.

The private rented sector now represents 17% of housing stock and involves over 8.5 million people, including many under 35. It is predicted to rise to 22% of housing stock by 2025 as owner occupation remains outside the reach of many young people. Tenants in the private rented sector are paying as much as 30% of their disposable income on rent.

There has also been growing concern that the poor regulation of the private rented sector is allowing rents to rise far faster than earnings and that in turn is pushing up the government’s housing benefit bill.

At present there is not even a basic criminal records check on anyone setting up as a letting agent, and most tenancy agreements do not last longer than six months.

Pickles will promise to publish a new code of practice, backed by statute, setting standards for the management of property in the private rented sector. This code will include responsibilities to maintain the property to an acceptable standard, and ensuring tenants do not have to pay for repairs out of their own pockets.

Proposals for the code 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 substandard property.

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.

The Tenant’s Charter will go out to consultation setting out what redress private sector tenants can seek. It will explain how tenants can ask for longer tenancies, something that cuts costs by helping tenants avoid the fees of up to £300 associated with contract renewals and moving between rental properties.

He will also set out the timetable for the introduction of a model tenancy agreement, which landlords can use to offer longer tenancies of three years or more, which will provide extra security and stability for families. At present, assured shorthold tenancies can be just six months.

Councils will also be given fresh guidance on how to protect tenants from illegal eviction and how to push for harsher penalties before magistrates for housing offences.

Labour has called for longer-term tenancies, and more predictable index-linked rents, but has opposed the return of rent controls. The Labour MP Jeremy Corbyn, speaking in the Commons on Tuesday, said the state of the private sector rented housing market is such that “if a tenant makes any complaint about the service provided by their landlord, they stand little chance of the tenancy being renewed”.

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

Article courtesy of The Guardian

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