Renters’ reform risks shrinking the PRS even further, says Propertymark

Propertymark has revealed that it has warned the Levelling Up, Housing and Communities Committee that England’s private rental sector (PRS) will shrink further if current plans for reform are carried out.

The organisation has submitted written evidence to the committee because it has opened an inquiry into the UK Government’s plans to reform the PRS.

The committee’s questions focus on the likely impact that the proposals set out in the ‘A Fairer Private Rented Sector’ White Paper and other recent announcements from the government.

The inquiry wants to know whether the proposals strike the right balance between landlords’ and tenants’ interests – and whether they will result in a ‘fairer’ private rented sector and if supply will be affected.

‘Landlords often form their view of the housing market’

Timothy Douglas, the head of policy and campaigns at Propertymark, said: “Letting agents and landlords often form their view of the housing market and the longevity of the sector based on sentiment and certainty.

“There are elements of the proposed reform that if progressed will create further risk and our member agents say they have seen enough to convince some of their landlords to sell up or indicate an intention to.

“Our research shows many properties sold off by landlords are not returning to the rental market.”

He added: “If landlords reject the changes and no longer want to make their properties available for rent, there is a danger the private rented sector will become smaller and even more expensive.

“The knock-on effect will see local authorities under unmanageable pressure to help many households secure a suitable alternative against a backdrop of significant under-supply of affordable homes to rent.”

Propertymark’s submission to the committee

The key points in Propertymark’s submission to the Levelling Up, Housing and Communities Committee include:

·         Impact on supply

Fewer homes may be available to renters if reform of the private rented sector does not equally consider the rights and needs of letting agents and their landlords with those of tenants.

Propertymark says its member agents are already reporting their landlords selling up or considering doing so since the proposals within the White Paper were published in June.

·         Removal of fixed-term tenancies

Concern exists around the lack of long-term security for property owners who make them available for rent because of plans to move away from fixed-term tenancies.

Furthermore, the government’s proposals to move to periodic tenancies will not work in the student market and will likely reduce the supply of student homes in the general PRS.

·         Revised grounds

Propertymark welcomes the government’s commitment not to introduce rent controls but questions the robustness of revised grounds for possession.

It says without Section 21 there needs to be an equal balance between tenant protections and the ability of the landlords and Propertymark’s member agents to take possession of their properties in reasonable circumstances.

More consideration needs to be given to how workable grounds relating to anti-social behaviour will be. Landlords currently rely on serving a Section 21 in these situations as the other existing grounds require a tenant to be convicted, which is not always likely.

·         Court processes

Propertymark also calls for changes to the court process to speed up possessions, and for a full pilot of the removal of Section 21, mediation, and the new court process to measure the impact before they are rolled out across the country.