The future of tenant rights

Written by: Andrew Culverwell, Head of Sales & Lettings Compliance, Countrywide

During a time of so much political uncertainty housing maintains a strong narrative with increased tenant rights featuring heavily; a theme that seems set to continue.

Regulation of Property Agents

July saw the Ministry of Housing Communities and Local Government (MHCLG) publish a report of the recommendations of a working group (RoPA) set up in October of last year by the then Housing Minister, Heather Wheeler, to look at the regulation of property agents in the UK.

The working group made a number of recommendations which included:

  1. All agencies should be licenced and include a fit and proper person test.
  2. All customer-facing staff should be licenced and adhere to a Code of Practice.
  3. All customer-facing staff should hold a qualification at Level 3 or above.
  4. A new regulator to be appointed to oversee compliance with an overarching Code of Practice.

Countrywide has long petitioned for the regulation of residential sales and lettings in England. We welcome the proposals and continue to work with industry stakeholders such as ARLA Propertymark and NAEA Propertymark in support of the timely adoption of the working group’s proposals.

Wales

The Renting Homes (Fees etc.,) (Wales) Act 2019 came into force on 1st September and confirmed a fee ban in Wales that will apply to assured shorthold tenancies. Whilst broadly speaking mirroring the ban in England there are a number of important differences. These include:

  1. Unlike in England a charge cannot be levied for varying the terms of the agreement e.g. a change of sharer.
  2. Unlike in England the power to set a maximum deposit has not been used.

As to whether that changes in due course we can but wait and see.

The Welsh Minister for Housing and Local Government recently signalled the Welsh Government’s commitment to giving six months’ notice of their intention to bring in the Renting Homes (Wales) Act 2016 into force.

It introduces radical changes to renting in Wales resulting in a completely different rental landscape to that in England. Amongst other things the Act gets rid of Assured and Assured Shorthold tenancies replacing them with secure contracts. Tenants will have increased rights around changing tenancy and ending it early. As matters progress we will keep our clients in Wales abreast of the changes.

Make Tax Digital

Make Tax Digital will apply to residential properties in 2021 in the UK. It stipulates that landlords should make their returns digitally, including the provision of digital receipts/ transactional evidence. We understand that HMRC will accept returns in only a small number of formats. Conscious of the potential burden this will place on our clients we have commenced development of software that will enable us to report on our client’s transactions in the correct format.

Lettings Reform

In our last update we highlighted proposed changes around the use of Section 21 to end so called “No Fault Evictions”. A Ministry of Housing, Communities & Local Government (MHCLG) consultation on these proposals “A New Deal for Renting – Resetting the balance of rights and responsibilities between landlords and tenants” ends on 12th October. The proposals contained within the consultation document herald the most far reaching changes to the lettings landscape that many of us will have seen. Landlords and tenants are encouraged to respond to the consultation. Further information is available at gov.uk.

A separate call for evidence by MHCLG which closed on 5th September looked at the challenges faced by tenants in affording deposits. The potential for financial pressure around funding a new deposit when changing home featured in the questioning. Concern was raised that tenants may be forced into costly short term borrowing whilst awaiting apportionment/return of their original deposit. The call for evidence also looked at wider improvements to the way the deposit protection process works.

In responding to the call for evidence we flagged the potential risk associated with underestimating quite how complicated the deposit release process is in terms of assessing the condition of the property and agreeing what monies are due to the landlord and what should be returned to the tenant. Over simplification could result in a long list of unintended consequences that serve neither landlord, tenant nor the tenancy deposit protection schemes.

We will keep you informed of progress in future updates.

For more information

Get in touch with your local branch if you have any questions on the current lettings market (regulation, compliance, mortgages, etc).

Contact your local branch