With a new government and ministers at the Department for Levelling Up, Housing and Communities concerned mostly with the rising cost of living, Private Rented Sector (PRS) reform could take a back seat for the foreseeable future.

But according to rental payment specialists PayProp, now is the time for the industry to put forward proposals to ensure that the measures in the recent Renters’ Reform White Paper work for all in the PRS – when they arrive.

PayProp has submitted an extensive response to the White Paper, and UK Managing Director Neil Cobbold is now calling on the whole housing sector to make its voice heard too.

Evictions

With the government proposing a new Ombudsman to settle disputes between tenants and landlords, PayProp says we need more clarity on what role they will have in cases of rent arrears and antisocial behaviour before and during any eviction process.

“While the White Paper confirms the removal of Section 21 and the expansion of mandatory eviction grounds under Section 8, the government may have to go further to speed up the Section 8 process to keep tenants and landlords out of limbo,” says Cobbold. “As non-payment of rent makes up a large proportion of current Section 8 cases, we would also wish to see the government allow third-party evidence from PropTech providers, as well as banks and other sources, to be submitted to the courts. We ask the department to establish a set of standards that this evidence must meet in order to be accepted by the courts as verification that it is a true reflection of rent demands and payment history.”

Cobbold says with this evidence, all rent arrears evictions cases could be dealt with by a First-tier Tribunal, as it will be clear at this stage if a tenant has breached the conditions of their tenancy agreement. “We also call on the government to clarify when a mandatory eviction notice can be served for persistent arrears, and to establish a new mandatory ground for eviction in cases when landlords need to refurbish a property to comply with the newly-proposed Decent Homes Standard.

Rent changes

The White Paper also suggests that tenants should be able to challenge rent increases more easily. PayProp asks that the government recognises the role of letting agents in this process. Agents can provide an effective and impartial channel of communication between landlords and tenants on proposed rent increases. As part of this, PayProp argues that there should be a standard template for proposed rent increases that also lays out the tenant’s rights and means to challenge an unfair rent increase.

In order to help landlords and agents set expectations and allow tenants to challenge a rent increase, the government is further urged to define what a ‘fair increase’ is and to produce a full set of criteria for what constitutes a fair increase. These could include inflation, rental prices on the open market and property conditions.

Additionally, in the current proposal, rent increases challenged at the Housing Tribunal can only be reduced. However, given the potential for a time delay between the case being brought and being heard, PayProp says tribunals should be allowed to set a higher increase than was initially demanded in line with market conditions at the time the case is heard.

The landlord/agent relationship

A large percentage of landlords use letting agents to manage their properties. However, says Cobbold, the White Paper does not fully recognise the opportunities this relationship brings to raise standards in the PRS.

Many of the changes proposed by the White Paper require landlords to demonstrate compliance. The government could reduce that burden by allowing letting agents who fully manage properties to take on some of those duties.

“We also ask the government to allow managing agents to access the proposed Property Portal on the landlord’s behalf,” adds Cobbold. “If they also provide Application Programming Interface (API) routes into the Property Portal, agents using PropTech can easily automate information and evidence uploads, greatly reducing the burden of compliance without compromising standards”.

Recognising the need for reform

“Many in the PRS agree there’s a need for reform,” says Cobbold. “With a new team at the Department for Levelling Up, Housing and Communities, the industry has a golden opportunity to engage with the new administration and iron out some of the inconsistencies in the recent White Paper. If we all work together at this, we can make sure the proposals deliver balanced reform that benefits tenants, landlords and letting agents.”

“While we have yet to see where PRS reform sits on the new government’s agenda during the ongoing cost of living crisis, the importance of the housing sector to the economy and to people’s lives mean that it should remain a priority,” Cobbold says, “We ask the government to take into account views from across the industry to ensure we have an efficient and accessible PRS that delivers high-qualify housing for all.”

“We also ask everyone with a stake in the future of the housing sector – landlords, letting agents and service providers – to let the government know what they need from rental reform.”

To read the full recommendation from PayProp, download the report.

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