Landlords face £65 annual PRS Database fee as HMRC takes on rent increase disputes

Landlords will have to pay a £65 registration fee per property annually under the government’s new national landlord registration service.

The government has confirmed that landlords will be required to register their rental properties through its “Register Your Rental Property” service as the PRS database is rolled out across England.

The database will launch regionally, starting in the West Midlands in December, before being introduced across other areas over the following 12 months.

Alongside the PRS Database, the government has also announced additional power to the Valuation Office (VOA), allowing it to rule on rent disputes.

Important first step

Under the new rules, landlords will be required to provide information about their properties, including:

• the property address;
• the number of residents and bedrooms;
• the amount of rent received; and
• copies of required certificates, including gas, electricity and Energy Performance Certificate (EPC) documents.

The government adds under future legislation, landlords will also be required to register any unoccupied properties before marketing them for let. Letting agents and landlords will need to include registration numbers on adverts.

Housing Minister Matthew Pennycook said: “Rollout of a national landlord registration service is an important first step toward establishing our new innovative database of private rented sector properties which will empower tenants, support responsible landlords and help councils enforce our transformative Renters’ Rights Act.”

Fee is fair and sustainable

The government claim the £65 fee for each different property is “fair and sustainable” for landlords.

In a press release, the government said: “Landlords need to pay the fee each time you register a different property.

“The government has set the fee at a level that balances the need for fairness and sustainability for landlords, with the cost of operating the service, and tackling non-compliance in the private rented sector. In return for the fee, landlords will get access to information to help them meet their legal obligations and be able to show they are complying with the rules.

“Fees will also support activity to identify and act on non-compliance with the Renters’ Rights Act. This will include funding to help councils have the staff and skills they need to identify and tackle non-compliance and drive slum landlords who persist in breaking the law out of the sector.”

HMRC Valuation Office responsible for challenges to rent increases

The government have also announced that HMRC’s Valuation Office will become responsible for decisions on challenges to rent increases in England, rather than the First-Tier Tribunal.

Mr Pennycook explains: “By transferring responsibility for making initial rent determinations to HMRC’s Valuation Office, we will ensure that challenges to proposed rent increases are determined faster and pressure on the tribunal system is reduced, giving tenants and landlords confidence that rent disputes will continue to be resolved efficiently and effectively.”

Minister for Courts and Legal Services, Sarah Sackman, said: “I am on a mission to continue to modernise our courts and tribunals, from digital improvements to better efficiency, so those using the system can get justice sooner.”

“This change is another step in that plan. By ensuring rental disputes can be resolved through a new dedicated service, this will provide quicker decisions for renters and landlords while relieving future pressure on tribunals.”

For the moment, the government say renters who want to challenge a rent increase must still apply to the First-tier Tribunal.

According to the National Residential Landlords Association (NRLA), the scheme is expected to take two years to be introduced, although it is not yet clear when this process will begin.

Industry reaction

Greg Tsuman, managing director for Lettings at Martyn Gerrard, said on the PRS Database: “While this is yet another expense for landlords to pay, £65 a year is unlikely to be the straw that breaks the camel’s back. This is a common-sense measure, and the increased transparency and improved standards it should create for the sector are well worth the cost.

“Landlords might balk at the prospect of more red tape, but in practice, the requirements are all things they should already have been doing. For most responsible landlords, the changes will be simple to manage. However, we are still awaiting the full details before we have complete clarity. A key question that remains unanswered is whether the responsibilities can be delegated to managing agents, as many landlords would prefer to rely on these services rather than handle everything themselves.

“The changes will help protect tenants from unscrupulous landlords and provide a clear warning to anyone considering renting a property if the landlord is not registered on the database. The additional transparency for tenants should reduce the risk of exposure to substandard properties. It should also prevent delays in starting a tenancy due to boiler or electrical issues. It is similar to ensuring that a car for sale has passed an MOT.”

Responding to the government’s announcement that HM Revenue and Customs’ Valuation Office will be responsible for decisions on challenges to rent increases in England,

Mr Tsuman said: “The Valuation Office is a logical choice for determining rental increases. It’s reassuring to see the Government’s awareness of the challenges involved in employing a professional surveyor to assess rental changes.

“The Valuation Office has all the requisite expertise, so it is only natural to rely on it as the most cost-effective solution for the taxpayer.”