Housing Minister Grant Shapps has announced he will scrap plans to introduce new regulations on private landlords and letting agents.
But although the announcement has been welcomed by buy to let property investors, who believe they are already over regulated, the lettings industry is not so happy.
Speaking in Parliament, Shapps confirmed that with the buy to let private rented sector already governed by a well-established legal framework, the Government has no plans to introduce any further controls.
Instead, he urged local authorities to use their existing powers to tackle any rogue landlords.
Currently councils can request landlords take action against hazards in their property or, if force is necessary, authorise and charge for improvements while prohibiting use of the affected parts of the property.
Authorities also have discretionary licensing powers to tackle areas blighted by poorly managed privately rented stock.
New regulations were proposed by the previous administration in response to the Rugg Review of the Private Rented Sector and included a National Register of Landlords, regulation of letting and managing agents and compulsory written tenancy agreements.
The new coalition thinks this is too much red tape.
Shapps explained: “With the vast majority of England’s three million private tenants happy with the service they receive, I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords.”
Shapps has also confirmed he will not unravel the controversial houses in multiple occupation (HMO) rules, which seek to crack down on homes shared by more than three people.
The HMO restrictions give councils power to refuse landlords the right to rent homes to more than three un-related people.
The move was opposed by property bodies and the National Union of Students (NUS), with fears it could create a nimby’s charter in areas that desperately need HMOs to house students, as well as immigrants, key workers and anyone else unable to afford to buy.
Ian Fletcher, director of policy at the British Property Federation, said: “Rugg delivered a thoughtful report and balanced package of measures nearly two years ago.
“Rather than grasping the moment, successive Labour housing ministers prevaricated, cherry-picked and ultimately manipulated the report for their own political ends.
“The blame for the death of the Rugg Review lies not with the current coalition, but with the previous government.
“It is therefore understandable Grant Shapps wants nothing to do with it. Landlords had lost all confidence in the ever more complex ‘simple’ registration proposals, and will be glad to see the back of them.”
The Association of Residential Lettings Agents (ARLA) said it was ‘extremely disappointed’ with the recent announcement regarding its industry.
Operations manager, Ian Potter, said: “This move risks seriously hampering the improvement of standards in the private rented sector, the sector's reputation, and the fundamental role it plays in the wider housing market, as well as failing to protect the consumer who has nowhere to go when there is service failure or fraud.
“Currently, any person or organisation can become a letting agent. Until that is changed via national regulation, unprofessional, unqualified and unethical operators will continue to exist to the detriment and expense of consumers and the market as a whole.”
David Brown, Commercial Director of LSL Property Services agrees. He said: “We want to see the whole private rented sector meet proper professional standards.
“Regulation would have plucked the bad apples from the barrel, removing the minority of rogue agents who tarnish the image of the private rental market.”
Javier Carrillo, lettings manager at West End specialist estate agency, also feels let down by the Government’s decision. He commented: “We believe that this decision has massive implications for the property market; it means that anyone without the legal and basic property knowledge is able to set themselves up to practise as an estate agent.
“For regulated agents like us, it also creates unfair competition as these unscrupulous agents will try to win deals by overvaluing properties and offering fake properties to attract customers.”
Plans to increase the annual rental threshold for assured short hold tenancies from the current level of £25,000 to £100,000 will go ahead and will come into effect on October 1.
