Warning on red tape overload for rental sector

Thursday 28th June 2012

Letting agents and landlords face ‘gross regulatory overload’ that serves only to drive up rents at a time when tenants can least afford it.

The accusation comes from the Residential Landlords Association which, in a new study, has identified over 100 individual pieces of legislation and regulation containing around 400 individual measures affecting the private rental sector.

Richard Jones, the RLA’s policy director, said: “With much talk about whether there is too much regulation, the RLA’s investigation was surprising for the sheer volume of regulations affecting the way landlords conduct their businesses day to day.”

Among the measures is antiquated legislation still in force, such as the 1730 Landlord and Tenant Act, allowing landlords to require tenants to pay double the yearly value where they stay on after expiry of a fixed-term lease; and the Distress for Rent Act 1737, regarding provision for landlords where tenants desert premises, and obliging tenants remaining in premises after they give notice to quit to pay double rent.

The findings follow warnings in a report on the private rented sector by Professor Michael Ball which demonstrate that the cost of regulation is invariably passed on to tenants in the form of higher rents.

The RLA says it will now cost out these measures to give an idea of how much extra tenants have to pay as a result.

Jones said: “The RLA’s findings clearly show that the private rented sector is facing regulatory overload.

“While the RLA will consider carefully the list of regulations and those which should rightly remain to protect landlords and tenants alike, already over-stretched local authorities cannot be expected to police all these, and more, regulations, as called for by some.

“You can pass as many laws as you want, but the key issue is actually enforcing them.

“With a supply crisis in the private rented sector, we must do more to make investing in it attractive for potential new landlords. Faced with such regulation, it is little wonder that many simply do not feel up to it.

“We would urge the Government to seriously look at those regulations that could be scrapped altogether without harming tenants’ or landlords’ interests.

“A good start would be to promote the virtues of self-regulated accreditation schemes. These enable local councils to use their finite resources to root out those landlords who provide a criminal service.”