Renters’ Reform Bill should not be a missed opportunity to regulate property agents, Propertymark advises

As the Renters Reform Bill makes its way through the House of Lords, Propertymark has advised peers not to miss this opportunity to legislate for the regulation and qualification of property agents.

The industry body also warned against discouraging investment in the private rented sector and to provide more certainty for landlords due to the proposed removal of fixed term tenancies.

The Renters’ Reform Bill had its Second Reading in the House of Lords on the afternoon of Wednesday 15 May, and it has now passed to Committee Stage.

The debate was led by Baroness Swinburne, Parliamentary Under Secretary of State (Department of Levelling Up, Housing and Communities).

Baroness Taylor of Stevenage (Labour) welcomed changes to possession grounds, the appointment of an Ombudsman, the implementation of pet friendly provisions, and the introduction of a property portal. However, she said the Bill has been watered down regarding the abolition of Section 21 no fault evictions.

Baroness Pinnock (Liberal Democrat) supported the Bill and called it ‘long overdue’, but she called for more social houses to be built to take the pressure off the private rental sector, and reiterated Labour’s call to abolish Section 21 no fault evictions.

Lord Best (Crossbench) expressed his concerns over ‘arbitrary’ evictions through ‘no fault of their own’.

The main aims of the legislation, should it become law, are to encourage open-ended tenancies, change the possession process and eventually end Section 21 evictions. It also aims to enhance standards for private rented properties and those who own and manage them.

Propertymark has recommended that fixed term tenancies should remain for those who find them advantageous, especially in the case of student tenancies.

The professional body added that it must be compulsory for there to be written tenancies that consist of an inventory in England. Alongside ensuring fairer deposit deductions, this will enable properties to be protected.

Letting agents should also be appropriately qualified and regulated and stick to completing mandatory continuing professional development within their job, streamlining the private rental sector with the social rented sector that already has compulsory qualifications.

There must also be a review of property taxes on investment in the private rented sector so that landlords can offset mortgage costs against tax liabilities, which has caused rents to surge, and landlords must have the freedom to break even with increasing costs.

Furthermore, Propertymark’s individual research discovered that 88 per cent of letting agents do not agree that the courts would be able to handle the end of ‘no fault’ evictions; 80 per cent believe the end of fixed term tenancies will impact tenants badly; 64 per cent of lettings agents think local authorities would not have sufficient resources to enact the new legislation properly, and only 54 per cent of agents agree that the proposed private rented sector database will improve standards.

Additionally, 72 per cent of landlords are anxious about the end of Section 21, 69 per cent of landlords are concerned about the end of fixed term tenancies, and 62 per cent of landlords are worried about rent review clauses being removed.

Timothy Douglas, Head of Policy and Campaigns at Propertymark said: “The legislation, once passed, will undoubtedly initiate the biggest change to the private rented sector since the 1980s.

“Most agents and their landlords have been reassured by the UK Government’s commitment to court reform and that there will be an effective way to recover possession of their property when things go wrong.”

He added: “However, with the removal of fixed term tenancies still a concern and open-ended tenancies reducing the certainty for agents and landlords the big question is how do we encourage landlords to stay in the Private Rented Sector?

“Furthermore, tenants need qualified and licensed housing providers to level the playing field and legislators must not miss this opportunity to regulate property agents and bring in additional protection for both landlords and tenants.”