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TODAY'S OTHER NEWS

Industry self-regulation now moves centre-stage says PropTech chief

A leading PropTech figure says a political issue north of the border demonstrates the advantages of voluntary industry codes of practice over formal regulation. 

Neil Cobbold, UK chief sales officer at automated payment service PayProp, says the recent decision to scrap a Bill to introduce a rent cap in Scotland is a case in point. The Fair Rents (Scotland) Bill was withdrawn from the Scottish Parliament in July, just a few weeks after being introduced and before it could be debated.

Put forward by a Labour MSP, it intended to cap rent increases for private tenancies at no more than the annual Consumer Prices Index plus one per cent.

Private tenants would also have been given the right to apply for a 'fair rent' to be based on the condition and amenities of the property, determined by a rent officer or First-tier Tribunal no more than once in any 12-month period.

But the Bill was scrapped last month because of a shortage of time and resources in the current pandemic period, with the measure in any case unlikely to become law before next year’s Scottish elections.

"Rent controls are complex to introduce and deeply controversial among landlords and property professionals. Therefore, now may not be the best time to consider such far-reaching regulation as the market continues to recover from the unprecedented shock of the last few months” explains Cobbold.

And he believes the principle shows that, in England too, it’s just too difficult to bring in new legislation now - thus giving the industry itself an opportunity to act.

"The difficulty of bringing forward new property industry legislation makes the role of self-regulation that much more important” he adds.

“In contrast, initiatives like the ongoing Code of Practice Steering Group consultation, based on the recommendations of the Regulation of Property Agents report [in 2019] give property professionals a chance to agree new industry rules that are sensitive to challenging market conditions.”

Cobbold says that while COVID-19 could affect the plans for many pieces of legislation, property professionals should take the opportunity to make their voices heard.

“The consultation period will remain open until September 4 and I would encourage everyone involved in the industry to give their feedback” he says.

“With so many from the sector already getting involved, we can reasonably expect the final document to reflect our needs and concerns while ensuring that we continue to do our best for landlords, tenants and homebuyers” Cobbold concludes.

  • Bryan Shields

    It holds the prospect of a blood bath for clients

  • PossessionFriendUK PossessionFriend

    Rent Controls would force some landlords to exit the market as the very last, last, latest straw that broke the rental market's back, but asides -

    It would ( like virtually every meddelling the govt has done in the ' Private ' rented sector, actually INCREASE rents, as Landlords would take the opportunity to increase ( on the use it or loose it basis. )

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    • 18 August 2020 20:24 PM

    Yep absolutely no LL would NOT increase rent to the maximum allowed.

    The BIG ISSUE would be whether the maximum allowed would be sufficient to ensure the property is still viable.

    Nobody knows what such maximum would mean in practice.

    Therein lies the problem!!

    It is the maximum amount that would be the determining factor for many LL.
    Of course there would be a possibility of a rental black market which seems to occur everywhere there are rent controls

    Such rent controls would cap whatever could be borrowed with a BTL mortgage.
    Obviously no lender would be able to offer more than could be based on the controlled rent.
    That could mean LL being severely restricted in LTV.
    No more 75% more like 50 or less percent!!

    LL would need to come up with massive deposits.
    They simply won't bother.
    What about when LL attempt to remortgage?
    Can't do it on the basis of a higher market rent.
    Stuck on a SVR; a very expensive one!

    I sincerely hope I won't be an AST LL when not if rent controls are introduced.

    The damage such controls would do to the property market and consequently the whole economy DON'T bear thinking about.

    Govt would need to have a cap for a reasonable market rent.
    Basing on LHA rates would destroy the PRS.

  • girish mehta

    looney ideas, wont work, we had rent controls before and people could not find houses. landlords could not maintain them. rent was high. you did not have choice. I do not increase my rent every year. if the rent control come in. it is fine, I will ask for 10% negotiate to 8% every year that is 40% increase in 5 years. what about the tenants. will they be getting any added benefit.
    Another scheme thought out so the can employ some politician or a minister in charge at a high salary .this scheme is of no benefit to anyone.
    The market will find the correct rent, no need to bring any regulation. Tenants will find places they can afford to rent. the government needs to pay fair rent allowance for people on benefit instead of pushing their responsibility to someone else. if they start paying fair LHA rates then most of the issues with affordability would be met.
    sensible government policy needs to be thought out instead of penny pinching policies.in overall they would pay same by the time you pay people to operate and fund the alternative schemes

    keep it simple stupid??

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