RICS recommendations for the Private Rented SectorMake Text Bigger
The Royal Institute of Chartered Surveyors (RICS) have produced a Rented Sector Policy Paper for England.
To see the full report Click Here
The Introduction starts:
“Since the 1990s, the UK has undergone significant demographic change: people are settling down later and living longer, incomes of younger households generally haven’t risen in real terms since 2008 (Redfern Report 2016), albeit disproportionately to house prices. At the same time the UK is experiencing a difficult economic climate, and homelessness is on the rise. As a result, a much greater proportion of the population will be renting property, and those applying as homeless are expected to increase over the next two Parliaments.”
The RICS Recommendations for the Private Rented Sector are:
– Repealing the second home SDLT charge. As a minimum, Built to Rent properties should be exempt if sold onto smaller investors.
– Reconsideration of the proposed changes to mortgage relief as a means to halt, and reverse, the exodus of small scale investors leaving the sector.
– The UK Government introduces a legal obligation for all letting agents to be a member of a recognised professional body, such as RICS and ARLA, or the National Approved Letting Scheme (NALS).
– Investigation into the notion of tenant passports as a means to negate the charging by letting agents for background and finance checks. Held by local authorities, this passport should also save money for the tenants, and the administrative burden placed upon letting agents.
– Lettings agents should have to comply with the same regulatory requirements as estate agents through their inclusion in the 1979 Estate Agency Act.
– Introduce statutory minimum professional standards for all residential lettings agents, by giving statutory force to the Private Rented Sector Code of Practice.
– Establishment of light-touch landlord registration. This low-cost registration scheme, held and enforced centrally, will ensure that all let properties across England are known to HMRC and the Home Office. By using data held by Tenant Deposit Schemes (TDS), this proposal will also assist risk profiling and locating illegal immigrants.
– Establish Development Delivery Units (DDUs) to work in partnership with local authorities, using with Compulsory Purchase Order (CPO) powers if necessary, to allocate land specifically for use by Build to Rent, and other, developers.
– Stock owning local authorities should be enabled to use better the prudential borrowing capacity of their asset base to support Build to Rent development.
– The Government should enter into land covenants on public owned land under which the Local Authorities would retain ownership of the freehold, and negotiate fixed long-term leasehold on the land. The ground rent received by Local Authorities would be related to the land value and would represent a portion of the overall sites’ income.
– Commitment to a long term approach should provide stability for institutional investment, building on the Build to Rent Fund.
– Using the taxation system to encourage contributions from self-invested private pension schemes (SIPPS) to unleash the untapped potential of pensions to invest in the PRS. This should provide a route for the pressure building in the Buy to Let market, by enabling the creation of new vehicles and increase supply over and above existing development levels.
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