Parliamentary rental review - What it means for you

This month the Communities and Local Government Committee completed a major investigation into the private rented sector.

The Committee sought responses from a wide range of interested parties, and published a report containing a number of recommendations. Although the government is not obliged to take up these recommendations, they could come to have significant repercussions for landlords and tenants across the country.

Read the Committee’s key recommendations here.

Raising enforcement standards in councils

Councils should have the power to hand out fixed penalty notices to landlords in the event of “minor housing condition breaches”. The council would not have to go to court in order to issue a notice, but landlords who objected would have the right to appeal.

More generally, enforcement arrangements “should pay for themselves”. In practice this could mean that the cost of enforcement is recouped from landlords “who flout their responsibilities”. Where landlords are letting properties below legal standards to Housing Benefit or Universal Credit recipients, councils should have the ability to recoup from the landlord the amount that has been paid to the tenant.

Landlord licensing

The Committee has not called for a nationwide register of landlords, despite significant pressure from housing charities. Instead, it recommends that “the government’s focus should be on giving local authorities greater flexibility and encouraging the use of existing powers.”

Councils should, the Committee says, be given the power to require landlords to register on an authority-by-authority basis, and that these accreditation schemes be run either by the authority or by a “recognised landlords association.”

Safety standards

The government should “work with the electrical industry to develop an electrical safety certificate for rental properties.” In order to get the certificate landlords would be required to submit their properties to a full wiring check every five years, and a “visual” wiring check at every change of tenancy. The government should also introduce a requirement for working smoke alarms in rental properties and, where applicable, carbon monoxide alarms.

Letting agent regulation

The Committee has called on the government to subject letting agents “to the same legislation that currently governs sales agents.” This would mean that the Office of Fair Trading would have the power to strike off agents “who act improperly”. Agents would also be required to have professional indemnity insurance.

In the event that sales agents are required to meet certain standards before they do business, letting agents should be placed under the same restrictions.

Letting agent fees

Agents should be required to publish a “full breakdown” of all the fees that will be charged to the tenant. This breakdown should accompany the property listing, and should be prominent enough as to be “immediately obvious”. Agents should also be required to explain their fees in advance of a property viewing. Landlords should also be told about the fees that will be charged to tenants, and double charging should be banned.

Longer tenancies

The Committee does not call for statutory longer tenancies, suggesting that the fact that some parties are already offering them means that further legislation is not needed. Instead, it calls for a faster eviction process for tenants who do not abide by their contracts, in order to “encourage landlords to make properties available on longer tenancies”. The government should also make it quicker for landlords to regain possession in the event that they want to sell a property.

Affordability

Housing supply should be increased, particularly in London and the South East, in order to reduce rents. The Committee does not call for any specific means by which renting can be made more affordable, but suggests that tenants, landlords, and agents should “discuss” options such as agreed annual rent rises or increases linked to average earnings or inflation.

Tax

The Committee called on the government to “set out proposals for greater co-ordination between the tax authorities and those regulating the private rented sector.” While the Committee indicated that it does not support any specific measure on landlord tax, it noted that responses to the consultation had suggested that a landlord’s Unique Taxpayer Reference be a requirement for the completion of any new tenancy, in order to restrict the potential for tax evasion.