Will Landlords Be Safe Under New Rental Rules?

Will Landlords Be Safe Under New Rental Rules?

Tenants Charter could put tenants in a

stronger position over PRS landlords

Regulations which hand private rented sector tenants more power and rights to request longer leases have been greeted with cautious optimism, although the new code of practice, intended for launch by the Government, would bring in much-needed protection for many tenants from rogue and inexperienced landlords.

The proposed Tenants’ Charter, could mean honest and hard working landlords are at a disadvantage and could be put off from renting out properties.

The results of the introduction, could lead to another shortage of available rental stock for the UK property market leading to rent increases and landlords becoming trapped by more stringent legal binding agreements.The Secretary of State for Communities and Local Government, Eric Pickles, previously unveiled the new charter, designed to allow England’s 9 Million private rented sector tenants to request long-term rental agreements to provide tenants with more stability.

Local authorities will receive Government guidance on how to protect private rented sector tenants from illegal eviction and how to secure tougher penalties for landlord offences.

Mr Pickles, proposed that the tenants charter will raise the quality and choice of rental accommodation, root out the cowboys and rogue operators in the sector, and give tenants the confidence to request longer fixed-term tenancies that meet their needs.

However, there are calls for Mr Pickles to take more measures into consideration to ensure that all PRS landlords and tenants will be on a level playing field as there are concerns that the changes could also prove costly to tenants, who could be liable for stamp duty land tax and legal costs.

Lettings and property management agents should be part of an approved redress scheme, with many already signed up to either of the voluntary schemes already in operation such as those run by the Association of Residential Letting Agents (ARLA) and the Property Ombudsman.

A new code of practice is definitely the way forward for the management of private residential lettings. But it has to be fair for both landlords and tenants.

The danger is that if landlords believe tenants have an unfair advantage, fewer landlords will want to rent out properties for business purposes. That could result in another housing shortage and higher PRS rents for tenants.

Eric Pickles underling, Kris Hopkins is right to want to make letting agent fees transparent and clear but this needs to be more than just good practice, it should be the rule for everyone.

The tenants’ charter could be a good move but there will always be the risk of putting either tenants or landlords at a disadvantage if it is not done properly.

Longer tenancy agreements may well give tenants added security in that they will be able to live in their home for many years. That’s a good thing but it could mean that landlords are unable to enforce necessary rent increases as well as running the risk of incurring stamp duty land tax because of the amount of rent due for the time period, the same as if they had bought a property.

UK private rental sector landlords need assurances that the rent they are charging is keeping up with the local and national market rate. As yet there have been no details released about allowing landlords to review tenant rents on a long tenancy agreement.

The student housing market may, at first glance, benefit from the new scheme for long leases because it would mean tenancies of two, three or four years would cover an undergraduate degree. However, students may be unwilling to fork out the substantial deposit that would be required to guarantee the rent for such a long period.

There is still a way to go to improve the regulation of the private rental sector in order to properly protect both the landlord and tenants, but the Government are finally taking a step in the right direction.

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