Agents list major problems with Renters Reform Bill

Propertymark has set out its pro-agency position on a range of issues contained in the Renters Reform Bill, currently trundling through Parliament.

The Bill is currently ending its Committee Stage which has included oral evidence from Propertymark and others; now Propertymark has also released its written evidence, which says there’s concern amongst its members about the private rental sector becoming increasingly hostile to landlords and letting agents. 

It says fixed-term tenancies must remain an option, saying: “We strongly challenge the proposal to remove fixed-term tenancies. Over 93% of our surveyed agents said that removing fixed-term tenancies will negatively affect both agents and landlords.

“A fixed-term benefits both parties, with security of tenure for the tenant and a guarantee of rent payments for the landlord. For tenants with low income or poor credit history, the fixed term allows a guarantor to be confident about the length of time they are signing up to support them.

“Furthermore, the student rental market relies on fixed-term agreements to facilitate the availability of properties in line with the academic year. Whilst we can support the plan to introduce a new ground to prevent students from refusing to leave at the end of their school year, a more practical solution would be to allow all private tenants the option to choose between a fixed-term and rolling periodic tenancy.”

Propertymark also says the Bill’s grounds for possession don’t go far enough. 

“The removal of Section 21 is the cause for the greatest concern amongst landlords because there is a lack of confidence that the remaining grounds provide them with adequate protection.

“For example, between January 2022 and January 2023 a 120 per cent increase in tenancy fraud was reported by Homeppl with an overwhelming majority of cases involving fake documents. However, with serious grounds such as these remaining discretionary, landlords risk lengthy and costly court procedures with no guarantee of regaining access to their property.

“Propertymark calls for amendments to make breach of tenancy, deterioration of property and acquiring a tenancy by using a false statement mandatory grounds for eviction, and for clear principles that judges must consider to be set out for anti-social behaviour.”

The trade body also submits the view that it still wants the regulation of property agents adding that letting agents will have a significant role to play in ensuring the reforms proposed by the Bill are embedded in the sector. Improving standards through qualifications and officially regulating agents would be the best way to ensure compliance.

“The UK Government has recently announced that property managers in the social rented sector must gain professional qualifications under new rules to protect residents and raise standards. Given that the Decent Homes Standard is being introduced to the private rented sector, bringing it to parity with the social rented sector, there is no reason why private renters should expect an inferior service than those in the social rented sector.”

Propertymark also asserts that only fully self-managing landlords should join a redress scheme, not landlords who do not manage their property full-time. Self-managing agents should be required to join one of the two existing approved schemes rather than a new one being created.

But the trade body adds: “However, alignment of the existing redress schemes is needed. The Property Ombudsman and the Property Redress Scheme currently do not operate to the same criteria or adjudicate against members in the same way, which leads to inconsistencies in agent complaint procedures and a lack of clarity for consumers.  

“Customers do not know what they should expect and are unaware that they must complain to the agent before the redress schemes can act, and this will be the same for landlords once they are also required to register.”

Propertymark adds that mandatory inventories will reduce disputes, claiming: “There is no legal requirement for a written tenancy agreement in England, so the Bill plans to legislate for written statements. However, in their current form, they will duplicate a lot of the information that is already included in a commonly-used tenancy agreement.

“A better option is an enhanced tenancy agreement which includes an inventory, or check-in and check-out reports, which will reduce the potential for a dispute to arise at the end of the tenancy. This would help to ensure that the end of the tenancy process is faster and more straightforward to complete, allowing a tenant to avoid unexpected costs and move more quickly.”

And it concludes the agents’ body concludes its written evidence to the Renters Reform Bill body by urging flexibility on pets should work both ways.

“The UK Government should enable the level at which deposits are set to be more flexible to reflect the greater risk of damage to a property when pets are present. Under the Tenant Fees Act, landlords and letting agents are no longer able to take a higher security deposit for tenants with pets – since 1 June 2019, deposits on new tenancies are capped at an equivalent of five weeks’ rent, where the total annual rent is less than £50,000, or six weeks rent, where the total annual rent is £50,000 or more.

”Propertymark wants to see a definition of what it means for consent to keep a pet to be unreasonably refused, and examples given. Currently, there is no guidance on what this term means in practice.”