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ARLA Calls For Rental Regulation In England

ARLA Calls For Rental Regulation In England

Government Urged To Rethink PRS Regulation

The Association of Residential Letting Agents (ARLA) wants the Government to bring England in line with the rest of the UK by calling for greater regulation of the private rental sector to better protect tenants.

ARLA argues that tenants in England could soon be less well protected than their Scottish and Welsh counterparts, due to the delay by the Government to introduce laws allowing for better regulation of the lettings industry.

According to data released by ARLA, 36% of all households in England are in private sector rented accommodation and the lack of regulation of the Private Rental Sector (PRS) is fast becoming an issue that affects more of the population than ever before.

The Scottish government reviewed its strategy for the PRS on the 30th May, while the Welsh government is set to introduce a Housing Bill legislating for a compulsory licensing scheme for all letting agents in Wales, as well as a code of practice, before the end of the 2012/13 Assembly term.

The announcements by Scottish and Welsh parliaments are in stark contrast with the current UK Government’s stance of opposition to regulation of the Private Rental Sector because of an apparent fear that landlords will become bogged down and put off by having to wade through a mountain of red tape.

On the surface this seems incredibly thoughtful of the Government, however, it is not to be forgotten that they also intend for all landlords to become unpaid agents for the UK Border Agency policing the immigration status of all tenants. No matter how watered down that proposal becomes the intent of those in power was made clear – to tap into powerful resources to save themselves money. It does make you wonder if the reluctance for regulation is simply because the Government can’t find a way to financially benefit from introducing new regulatory legislation at this current time.

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The recent landmark decision to licence all private landlords made by Newham Council could damage the UK’s Private Rental Sector (PRS) if other local authorities adopt the same initiative, according to a number of the UK’s leading property professionals and landlord associations.

The mandatory licensing scheme, which will affect some 35,000 PRS tenancies within the borough of Newham, is intended to reduce the letting of sub-standard rental accommodation and remove rogue landlords from the local lettings market.

All landlords will have to sign up to the scheme, with landlords who fail to obtain a licence facing prosecution and fines of up to £20,000 (GBP).

However, with all UK local authorities subject to financial reforms many of whom will be facing budget and staffing cuts there is some doubt as to exactly how the new regulation will be implemented.

Local authorities across the UK who may now be considering adopting a similar mandatory licensing scheme for landlords are urged to take into account the financial and economic risks to their own local lettings market, by the property professionals operating within areas that may be considering such a move.

It is widely believed by many property professionals that blanket licensing of landlords only penalises good landlords while rogue operators remain off the radar.

Whilst there are bad landlords in every region of the UK, they are a tiny proportion of the overall PRS landlord network. Over regulation of the private-rented sector can stifle good business practices and deter tenants from seeking out rental properties managed by compliant landlords due to unnecessary red tape.

Any reform of the UK PRS should be sector led and funded, maintained and enforced by the Government. By imposing this poorly conceived micro regulation, Newham council could force landlords to leave the borough all together, reducing the available rental housing stock

The news of Newham councils decision came shortly after the Welsh assembly announced proposals for a scheme similar to that in Newham – a registration and licensing scheme for all private sector landlords in Wales.

The Private Rental Sector plays an invaluable role in reducing the national housing deficit, homelessness and creates business opportunities. It is crucial to keeping tenants that could be potential first time buyers with a roof over their head whilst they save for a deposit to purchase their own homes and extra bureaucracy will deter even the most diligent of landlords.

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