Many landlords may not realise it, but within 18 months those operating in England and Wales will have to register with a redress scheme, be recorded on national database and embrace a new, portable ‘lifetime deposit’ for tenants in order to be legal.

That assumes the government’s renting reform White Paper, which is being published this Autumn, turns the proposals outlined in the Queen’s Speech into legislation as planned, most likely in early 2023 but maybe sooner, and usher in the biggest changes to the private rented sector for over 30 years including the much-discussed ban on Section 21 notice evictions, as the NRLA’s Ben Beadle (pictured) puts it.

furlough

“We urge the Government and all others in the sector to use the time they now have to ensure that the reforms are fair and workable for both tenants and landlords,” he says.

Both redress and a landlord database will require substantial bureaucracies and funding to operate effectively and will bring usher in substantial new red tape for landlords to navigate.

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“The Queens Speech talks of enhancing the rights of those who rent with a desire from the UK government to introduce a set of measures to ‘hold bad landlords to account’,” says Timothy Douglas, Policy Manager, Propertymark.

Propertymark has long campaigned for a database of rogue landlords and property agents operated by MHCLG to become publicly available.

It says this is important to help National Trading Standards, the redress schemes and local authorities join up the circle of intelligence for enforcement; landlords and tenants need to know if they are renting or letting through a banned agent and agencies will be able to vet future employees.

“With regards to ensuring all tenants have a right to redress, the UK Government must prevent ‘double jeopardy’ and only extend redress membership to landlords who do not use an agent to fully manage their property,” says Douglas (pictured).

“There were also hints of a landlord register [in the Queens Speech], but the UK Government must ensure existing data across the sector is not duplicated and there is a joined-up approach.”

Complicated

There are similar worries about the government’s ‘lifetime deposits’ proposals which, although laudable, are likely to be complicated to implement.

“Whilst we will work constructively on the detail of the proposal, it is vital that the new system in no way discourages landlords from making valid claims for damage to properties,” the NRLA says. “It is especially important that at no point in the process under such a scheme is a landlord faced with a tenant not covered by a full deposit.

“This could arise when a tenant transitions from one rental property to another, and where part or all of the deposit they paid is required or is being disputed as a result of damage to a property. The scheme must protect the new landlord under such circumstances.”

hooker

Sean Hooker, who is Head of Redress at the PRS (pictured), recommends bringing together the existing elements already in place and plugging the gaps, without having to reinvent the wheel and set up a “whole new system at potentially great cost and burden to the sector”, he says.

“Some form of unified register is definitely needed, so tenants and enforcement agencies can identify who landlords are and the properties they rent out, redress should be available for all tenants regardless of whether the property is managed by an landlord or an agent or whether there is deposit involved, or a no deposit alternative or nothing is in place.

“Once this framework is set up it would be a relatively easy task, through data sharing with for example the deposit schemes, redress schemes, client money protection insurers and local authority licencing, for a comprehensive list to be produced with little need for a separate process for most landlords or agents to undertake.”

Publicly accessible

Hooker says that from this base things like property condition reports and a publicly accessible rogue landlord and agent list would be relatively easy to incorporate.

“You could also look to have a single access to complaints which the Redress Reform Group was looking at and yes, the regulation of property agents.”

The one exception to the database will be that Wales already has one via its Rent Smart scheme.

19 COMMENTS

  1. What about a database for rogue tenants?? It’s always the landlords who are being bashed. Unbalanced, unethical, ludicrous.

    • Exactly as I was thinking. Surely a rogue tenant database would be of benefit. Is this being suggested by the NRLA or Sean Hooker of the PRS?

    • They are all to full of their own pissing importance, to worry about landlords having bad tenants. & of course such a list of bad tenants wouldn’t fit in with their ethos, they’ll make up some nonsense about data control, privacy, anything they can waffle on about to confuse the issue & not answer the question.

      They think Landlords are minting it, & will make a fortune at the end, when they sell, so they don’t feel bad about it. But many such as myself, will simply sell off gradually, & by the implementation date, will be property free. There’s plenty of new comers who will replace us, thinking they’ll be minted, until they come up against the mountain of bureaucracy, & will think twice about being a landlord. I’ve already met some, & we haven’t even had the new BS laws yet.

      At some point, they will have a shortage of Landlord PRS. Regulation does that. history has shown it. it also makes it all more expensive.

  2. As ever, an idealised wish list with no thought of how to practically achieve it. The end result will be half baked, with good LLs trying to comply & rogue LLs just ignoring everything.

    And where do the costs go? Onto the tenants rent. When will the do gooders learn?

  3. Surely if good landlords were rewarded there’d be fewer rogue landlords, but as the situation stands, good landlords are being punished over and over again by inflicting higher taxes and ridiculously high licencing fees. Now, no doubt, there will be a fee for joining the database and a fee for joining the redress scheme.

    I don’t receive a lot of profit from letting properties and any further costs would probably make letting properties not worth while.

    Should I start putting my rents up now to cover this? Or should I evict the families living in my properties, sell up, and invest elsewhere?

    • Start putting your rents up now – slowly but surely is best as no tenant likes a sudden big increase. Best start asap imho.

    • I’ve already started evicting tenants as I’ve had enough of the on sided legislation… It’s too stressful trying to get shot of bad tenants. The way things are going all rental properties will be run as a Limited Company with no direct person to contact. It’s pretty obvious government don’t want small businesses renting property other wise you wouldn’t need to set up a limited company in order to offset your mortgage interest against your tax. Luckily for me I’ve been at it 25 years and am getting out. I don’t envy you new landlords at all with the onerous legislation introduced in the last 5 years or removal of tax allowances. But good luck anyway, I find it too stressful now.

  4. Over the last few years there has been a lot of additional redtape that coupled with the eviction ban has shown that the govt do not value the fact that millions are housed in great accommodation in the PRS when at the same time govt have withdrawn from social sector housing.

    I for one have removed as much risk as possible from the portfolio, sold off under performing properties etc.
    Now all properties are either rated C or D with an easy fix like a new boiler to move to C…. I have worked with my best tenants to move them into the best properties and sold the rest and the less good tenants have been removed from the portfolio.

    Result is about half of the portfolio has gone and to be honest if the current incessant beating up of landlords persists then as my best tenants move on I think I will sell up.

    There are other, far easier ways to make a few quid without the high risks associated with the PRS from dog bites to cannabis farms, prostitution, drugs and all the ramifications of the eviction ban and people gaming the system and avoiding paying rent.

    When Tony Blair offered to house everyone in the EU it was the PRS that filled the gap… What thanks did we get… NONE.

  5. I’m puzzled as to why councils don’t know who landlords are. Whenever you buy a property, you are required to pay Council Tax if it’s unoccupied or an HMO, I believe. You also have your name registered as owner at the Land Registry. Anyone can access Land Registry records, including councils. How many landlords remain untraceable? Isn’t this a sledgehammer to crack a nut?

  6. In 2019 HMRC estimated there are 1.63 million private landlords in the UK but only around 500,000 regularly file tax returns. With the prospect of having to legally identify themselves for the purposes of compliance, how many are going to be concerned about being caught out for past and/or future rental income and decide it’s prudent to pull the pin.

  7. This appears to be doublespeak for the end of deposits, or at least, the end of deposits under LL control. Having the LL able to hold on to the deposit, is a HUGE incentive for T to not cause damage. Im seeing increased pressures to abandon insurance based deposit schemes in favour of custodial ones. These 3rd party deposit holders are just ordinary Ltd companies who presumably invest the money in bogus ways (Greek bonds perhaps). Their auditors are not even in the top 10. Personally, ive always felt T’s deposit is safer in my bank account than someone else’s.

  8. If a tenant cannot afford the initial deposit then alarm bells start to ring when considering whether they can afford the monthly rent.

  9. The Government rely on the PRS to accommodate the growing population of renters. More and more landlords are selling up due to all the additional legislation being introduced so less accommodation is available resulting in higher rents (due to supply and demand), is this really what the Government had in mind? I really don’t think so, but it’s what is happening. Landlords and agents alike cannot keep absorbing all these additional costs; they will eventually be added to the monthly rent for tenants.

  10. HMRC describe me as an Investor and not in trade… Well in that case investors can and will invest anywhere they get a decent return. the risk to reward ratio is way out of line in the PRS. So govt, Gen rent, shelter etc can introduce whatever landlord bashing wheezes the choose..

    I in return are perfectly free to simply sell up and invest elsewhere where the risks are less and the returns more solid…

  11. All those involved in this latest idiotic scheming, totally divorced from reality, should be made to write out 10,000 times………Private Landlords are not there to provide social housing, free social housing very often for the past eighteen months.
    Secondly said know nothings of reality should be made to work for a minimum Of three months with a private landlord experiencing the reality of the job.
    Make them deal with the smashed doors, walls, no rent, housing benefit spent on anything but rent and a lot worse, then let’s hear what their big idea is.

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