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Posted on October 17th 2013 by admin-movingin

Pickles unveils reforms package for private rented sector

New regulations are to be published “within days” by the Government, which will require all letting and managing agents to join an approved redress scheme.

A new Code of Practice setting standards for the management of property in the private rented sector is also to be published, and could become statutory.

Additionally, a Tenants’ Charter is being published and goes out to consultation, and a timetable given for the introduction of a new model tenancy agreement giving tenancies of three or more years.

Local councils will also be expected to step up their activities within the private rented sector.

They are to be given guidance on how to protect private tenants from illegal eviction, how to push for harsher penalties for housing offences, and told to plan for new private rented developments, including on their own land.

The announcements were made yesterday in a package of measures flagged up by Secretary of State Eric Pickles as heralding “a brighter future for hard-working tenants”.

But the measures have come under fire for being too soft, and not going far enough.

They do not require letting agents to have Client Money Protection insurance, and do not give powers to the Office of Fair Trading to ban letting agents. Nor will letting agents have to have Professional Indemnity insurance. Nor is there any crackdown on fees charged by agents and no mention of regulation of letting agents.

As such, Pickles has rejected some key proposals made this summer by the Communities and Local Government committee report into the private rented sector.

Clive Betts, the MP who chairs the CLG committee, said: “It is disappointing that the Government does not see fit to crack down on cowboy letting agents and their rip-off fees and charges.”

Ian Potter, managing director of ARLA, said he too was “disappointed” that there was no mention of insurances, or the way agents handle client money, or of regulation.

He said: “We will continue to call on the Government to introduce these powers to ensure that we drive out bad practice in the sector once and for all.”

Richard Lambert, of the National Landlords Association, said: “We believe that the Government has missed an opportunity to require greater professionalism of letting agents. While the requirement to belong to an approved redress scheme is a step in the right direction, it does little to protect the financial interest of landlords and tenants working with unregulated agents.”

Peter Bolton King, of the RICS, said the Government needs to go one step further, and called for a consistent national regulation scheme of letting agents.

Nonetheless, Pickles called his plans “ambitious”, saying that the UK’s nine million private tenants would get a better deal as a result.

In particular, said Pickles, tenants would be able to:
    •    avoid hidden fees from unscrupulous letting agents

    •    get proper protection from rogue landlords

    •    request long-term rental deals that cut costs and provide stability for their family

    •    feel confident to demand better standards and management of their property by landlords
Pickles said: “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.
“This government is on the side of hard-working people and the last thing we want to do is hurt tenants and kill investment by increasing costs and strangling the sector with red tape. But tenants deserve better value for money, and dodgy landlords should be under no illusion they can provide a shoddy service with impunity.
“Today’s 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.
“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.”

Pickles also announced a summit for mortgage lenders to consider the issue of longer tenancy agreement. He also announced a review of how tenants can complain to councils about private rented accommodation.  
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.

Pickles made his announcement in tandem with another, from the OFT, which yesterday launched a major consultation into how letting agents and landlords must comply with a raft of legislation.