A call for more rental reform has been made to make the lettings industry more transparent and fairer.
The call comes from Neil Cobbold, the managing director of PayProp, the automated payment service.
He says that politicians who are currently drafting new rent reform rules should offer all sides of the lettings sector a chance of voicing their opinions.
Mr Cobbold says that any regulation for the private rental sector should not alienate letting agents and landlords.
‘Landlords are more likely to be onboard with changes’
He explained: “Agents and landlords are more likely to be onboard with any changes if they feel their concerns are heard.
“The rhetoric around rental reform is how one group or another will be harmed, or the dangers of over-regulation.
He added: “Good landlords and agents, and good tenants, have more in common than sets them apart, and they need, ultimately, each other.”
In England, the rental sector is taking part in discussions over the Rental Reform White Paper that is expected this spring.
And in Scotland, there’s a new consultation that will run until April on the ‘A new deal for tenants - draft strategy’.
Major stakeholders are being consulted
Mr Cobbold says he’s pleased to see that major stakeholders are being consulted ahead of planned reforms for Scotland and England.
He said: “When it is done for the right reasons, there’s nothing wrong with new regulations.
“The most respected industries and professions have lots of checks and high levels of regulation in play.”
He said that regulation used to improve standards will work best, but not when it acts as a disincentive.
Also, councils will need the expertise and resources to enforce any new rules or agents and landlords will lose faith in the new laws if they feel there is not ‘a level playing field’.
‘Rental reform in practice’
Mr Cobbold said: “It will be interesting to see rental reform in practice and how much industry backing it gets. This could be the difference in how effective it is.”
The managing director of Accommodation for Students, Simon Thompson, said: “Until we see what is contained in the Rental Reform White Paper, landlords will continue offering quality rental properties for tenants and they will do this effectively.
“However, there will be landlords worried about what the reforms contain, particularly if there’s an impact on profitability which could see more landlords leaving the sector when there’s growing demand for quality homes to rent.”
The fear of landlords selling off their property portfolio is already an issue for the Scottish Association of Landlords (SAL).
They have questioned 635 members who own 4,214 rental properties, to find that one in three is looking to reduce their portfolio.
‘Anti-landlord rhetoric’ is ‘demonising’ landlords
The organisation’s chief executive, John Blackwood, points to ‘anti-landlord rhetoric’ as ‘demonising’ landlords that could lead to thousands of rental homes being sold and leaving tenants struggling to find somewhere to live.
He said: “Our members are clear, demonising landlords will lead to fewer homes in the coming decade being available to rent.
“We know many tenants are not normally in a position to access homeownership, and those tenants who can access the private rental sector will put pressure onto a strained homelessness and social housing services.”
He added that the only way forward in dealing with Scotland’s current housing crisis is to increase the supply of homes for rent.
Fears in Scotland are being mirrored in Wales with a survey from Propertymark revealing that Welsh letting agency members are reporting growing numbers of landlords leaving the sector.
Five landlords in every branch leaving
They say there are five landlords in every branch leaving; that’s double the national average - and higher than is found in any other region.
Propertymark points to the likely cause being the Welsh government’s plan to extend notice periods, and enforce other restrictive measures, as part of its Renting Homes (Wales) Act which will be implemented later this year.
Nathan Emerson, the chief executive of Propertymark, said that the trend of landlords leaving the sector is already hitting tenants.
He added: “With several changes from the implementation of the renting act on the horizon, landlords will face further regulatory pressure.
“Coupled with high demand in the sales market in parts of Wales, this could contribute to landlords exiting the sector.”
London rents enjoy strong recovery
Meanwhile, it has been revealed that landlords in London have seen their rents surpass the pre-pandemic levels.
Real estate firm Chestertons says that strong tenant demand and the return of the ‘corporate tenant’ in the prime and super-prime London market has led to an uplift in rent prices.
There’s also an undersupply of properties for rent adding to rent pressures.
Capital’s average weekly rent is now at £751
Their figures reveal that the capital’s average weekly rent is now at £751, that’s 21% higher than 2020’s figure of £589.
The firm’s head of lettings, Richard Davies, said: “Tenants who secured a property at a discounted rent during the pandemic will be keen to hold on as long as possible, particularly with rising living costs.”
He also pointed to the return of international students and office workers to deliver ‘unprecedented demand’ in London’s rental market that is outstripping supply.
