But the plan falls short of making it compulsory for lettings agents to have a professional qualification which many in the industry believe is needed. Currently no qualifications are needed to set up as a lettings agent in the UK.
The plan see the introduction of a tenants charter that should combat hidden fees from unscrupulous letting agents and means tenants can request long term rental deals that cut costs and provide stability for their family.
Communities and Local Government Minister Eric Pickles said that the proposals reinforce existing policies, including the £1 billion Build to Rent scheme, which is delivering newly built homes specifically for private rent.
As part of the second round of the Build to Rent scheme, bidders are encouraged to offer longer term, family friendly tenancies as part of the mix of rented accommodation being offered.
‘The private rented market is a vital asset to this country. It’s an important option for the millions of people who want a bit more flexibility, or to simply save up for a deposit so they can buy a place of their own,’ said Pickles.
‘Tenants deserve better value for money, and dodgy landlords should be under no illusion they can provide a shoddy service with impunity. Our proposals will raise the quality and choice of rental accommodation, and sharpen the tools available to tenants and councils so we can root out the cowboys and rogue operators in the sector,’ he explained.
‘These measures will also give tenants the know how to demand longer term tenancies that cut costs and meet their needs and when things do go wrong, the confidence to take action without fear of eviction or harassment,’ he added.
New regulations will force letting and property management agents to join a compulsory redress scheme. It is estimated that 3,000 agents, that is 40% of the entire industry, have yet to join one of the existing schemes. The move aims to ensure tenants’ complaints about hidden fees and poor service are investigated independently, and where a complaint is upheld, they receive compensation.
For the first time the government will publish a new code of practice setting standards for the management of property in the private rented sector, with a view to making it statutory to provide greater confidence for tenants in what they can expect.
The new tenant’s charter aims to help tenants understand what they should expect from their rental deal, and how they can take action if they are the victim of hidden fees or poor standards of accommodation. There will be a model tenancy agreement which landlords can use to offer longer tenancies of three years or more, which will, provide extra security and stability for families.
Pickles said that the government is also committed to produce extra guidance for local councils on how to protect tenants from illegal eviction, how to push for harsher penalties before magistrates for housing offences where these have a real impact on peoples’ lives, and to plan for new private rented developments in the future, including on their own land.
The government will also review the process by which tenants can raise concerns about the standard of their private rented property and the response they should expect from their council in enforcing standards of safety and hygiene
The review will also consider requiring landlords to repay rent where a property is found to have serious hazards. This could include allowing councils to recoup housing benefit so that taxpayers’ money is not used to support landlords who provide sub-standard property.
Clive Betts, chairman of the Communities and Local Government Committee, said it was clear that the government had taken on board many of the recommendations in its private rented sector report published earlier this year.
‘Much remains to be done if renting is to become an attractive alternative to owner occupation. It is disappointing, therefore, that the government does not see fit to crack down on cowboy letting agents and their rip off fees and charges. It is also regrettable that the Government has declined to give local authorities the powers and freedom they need to improve housing in their areas,’ he pointed out.
Peter Bolton King, global residential director of the Royal Institution of Chartered Surveyors (RICS), which has campaigned for tougher rules, said that the introduction of a code of practice specifically covering those managing rented property should certainly improve standards.
But he too is disappointed that there will be no compulsory regulation for letting agents. ‘Consumers still cannot be sure that the agent they're dealing with is suitably qualified or knowledgeable to operate. As part of our consumer research last year, almost 90% of people questioned felt that agents should be forced to register with an independent regulatory body before trading,’ he explained.
‘We will continue to call for a consistent national regulation scheme for lettings agents which protects the public where the risks are greatest,’ he added.
Richard Lloyd, executive director of consumer group Which?, said that making charges clear upfront will enable people to shop around more easily, and longer tenancies could mark the end of unnecessary renewal fees.
‘The new legislation giving landlords and tenants access to a complaints scheme now needs to be brought in as soon as possible and there must be strong action taken against any agent in breach of the scheme,’ he added.
