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PropTech Today – supporting smarter, more streamlined enforcement with PropTech

Housing is back on the political agenda with a bang. The government’s new Levelling Up White Paper sets out sweeping reforms for the private rented sector, including the end of ‘no-fault’ Section 21 evictions, extending the Decent Homes Standard to privately rented homes, and the creation of a national landlord register.

Politicians in Westminster have also pledged to release a Rental Reform White Paper this spring, which will provide further detail on the future direction of lettings regulation. Meanwhile, devolved and local governments are also planning to tighten up rental rules – including a headline-grabbing push for rent control in Wales.

The sector has already had to adjust to other incoming regulations in recent years, including gas and electricity safety checks and stricter minimum EPC requirements.


Putting regulation into practice

How will local authorities manage the new rules? There is a hope that with additional regulation will come additional funds to better police the industry, but with the limited resources local authorities have to make do with, many are already struggling to keep up with existing regulations. Freedom of Information requests by the National Residential Landlords Association (NRLA) revealed last month that most local authorities don’t register property inspections thoroughly.

Landlords and agents worry, understandably, that the new regulations will not be enforced evenly and will be burdensome to comply with, imposing further costs on law-abiding housing providers while allowing rogues to stay under the radar. In PayProp’s roundtable on lettings industry transparency last year, Agent Rainmaker’s Sally Lawson estimated the cost of compliance for letting agencies at £170,000 per year. While many property professionals welcome high regulatory standards, they need to know that they are fairly applied – and any perception that they aren’t is damaging.

The proposed reforms will also put greater pressure on agents and landlords to collect data themselves. With Section 21 evictions likely to end in England and Wales, industry groups are calling on the government to make all Section 8 grounds for possession mandatory – but they will still need to be able to prove in court that their grounds are valid.

Bridging the gap

At present, gathering and presenting evidence to support an eviction can be time-consuming for landlords and agents. The NRLA has found that many fall back on ‘no-fault’ evictions under Section 21, even in clear-cut cases of rent arrears, to avoid the admin burden of the Section 8 process.

But it doesn’t have to be this way. The PropTech platforms that letting agents already use on a daily basis can provide a complete and transparent record of the data that local authorities – and if necessary, courts – need.

For example, a letting agent who collects rent may be able to rely on their payment processing system to automatically create an uneditable log of all incoming and outgoing transactions. In addition, leading platforms enable agents to easily show, in real time, if a tenant is in arrears, and by how much. If the platform also allows agents to send automated payment reminders, they would in addition have a record of their attempts to contact the tenant.

Technology has another important advantage too: according to PropTech industry experts at the PayProp roundtable, people who mistrust human administration may more easily trust that automated processes are uniform and fair.

As unfair as it is, our industry suffers from a poor public reputation. With PropTech-powered agencies diligently generating detailed evidence of compliance, sharing this data with tenants, landlords and local authorities may help improve that reputation.

PropTech providers can therefore play an important role in helping the government better regulate the industry. By showing government the tools and systems on offer, providers together with agents and the wider industry can help regulators set common-sense evidence requirements that agents can fulfil using the tools they already have.

In turn, local authorities will find it easier to check for compliance so they can dedicate more resources to enforcement, leading to better protection for tenants.

The public sector is already listening. Later this month I’ll be hosting a seminar on client money protection in the private rented sector at the National Local Government Event, with a focus on the future of rented sector regulation. As PropTech providers, our job isn’t to try and steer rented sector regulations, but we can help the people responsible for setting and enforcing them to understand our areas of expertise.

*Neil Cobbold is Managing Director of PayProp UK

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    More cobblers from Cobbold. Can he not afford to pay for advertising?


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