Private Rented Sector

Lord Pickles Excerpts

Wednesday 16th October 2013 Written Statements

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

The private rented market is a vital asset to this country. It is an important option for the millions of people who prefer the flexibility that renting offers, or who are simply saving up for a deposit so they can buy a place of their own. The coalition Government are delivering a series of policies to promote home ownership and affordable housing. But we recognise there is more to do to support a vibrant private rented sector.

I am therefore today announcing a package of further measures to help millions of hard-working tenants get a better deal when they rent a home. These measures will give tenants the know-how to demand longer-term tenancies, stable rents, better quality accommodation, avoid hidden fees when renting a home and demand better standards.

Equally, we recognise the need for proportionate regulation. Excessive red tape—such as compulsory landlord registration fees or rent controls—would reduce investment, restrict choice for tenants and ultimately drive up costs for tenants.

We also recognise the need to support the vast majority of law-abiding, decent landlords in managing their properties and ensure they are protected when tenants intentionally do not pay rent or damage their property. At the same time, action should be taken against the small number of rogue landlords to stop tenants being ripped off when they rent a flat or house and ensure tenants have the confidence to take action without fear of eviction or harassment.

Ensuring high-quality accommodation

I have set out today that we will develop a code of practice on the management of property, in the private rented sector. This code of practice will set out what landlords, letting agents and property managers should do when providing tenants with homes to live in. It will make clear that it is their responsibility to maintain the property to an acceptable standard to prevent tenants having to pay for repairs out of their own pockets.

Tenants have a right to live in homes that are safe and well maintained. We will undertake a review into how we can ensure tenants are satisfied that their homes are safe and healthy and what standards of hygiene and sanitation they can expect and how they will be protected from damp or excess cold. We will consider the scope for requiring landlords to repay rent where a property is found to have serious hazards. This will include considering extending local authorities’ ability to recoup housing benefit through rent repayment orders, so that taxpayers’ money is not used to support landlords who provide sub-standard property.

Protecting tenants from rogue landlords

Tenants must feel able to raise concerns or complaints with their landlords about the homes that they live in, and they must be able to do this without fear of eviction.

We will also work with local councils to share best practice on the prosecution of landlords for housing offences. This will make clear the importance that local authorities demonstrate that such offences have a real impact on the lives of tenants.

Cutting costs for tenants

A Tenants’ Charter, published today in draft, will tell tenants what their rights are, what to expect and what to ask for and what to do if they have any problems. This will explain the flexibility which exists to enable tenants to ask for longer tenancies and promote awareness among tenants of what to expect, including on the transparency of lettings agents’ fees. Greater transparency will help stop unreasonable practices and unfair charges by letting agents, and would-be tenants will know the full costs before they sign up to any contract.

We will also develop a model tenancy agreement, by early 2014, which will simply and more clearly set out the rights and responsibilities of tenants and landlords alike and help tenants to understand which clauses should be in every agreement, which are optional but standard and which are unique to that property. We have already directly encouraged those bidding in the second round of the Build to Rent fund to support longer-term tenancies.

We will shortly lay before Parliament the secondary legislation setting out the conditions compulsory redress schemes must meet. All letting and management agents will be required to belong to such a scheme. This will ensure that complaints about their service can be investigated by an independent person. A complaint could be made where the agent had not made clear what fees would be charged and, where a complaint was upheld, the redress scheme could require the agent to pay compensation to the tenant.

Supporting good landlords

We know that the majority of landlords in the private rented sector are good landlords who have excellent relationships with their tenants and who maintain their properties. We want to ensure that all tenants have this same level of service and the same standard of property. We also know that there are some bad tenants out there; we will work with landlords to identify any improvements that can be made to the eviction process, so that the law-abiding landlords have confidence that they can get their property back if a tenant stops paying the rent and which will provide them with more confidence to offer longer tenancies.

We recognise that many buy-to-let landlords will be prevented from offering longer tenancies because of restrictions in their mortgage. We will be holding a mortgage lenders summit to identify the barriers to lenders agreeing to longer tenancies and consider how lenders can make it easier for landlords to offer longer tenancies that benefit families.

Increasing the supply of rented housing

Increasing the supply of housing will provide more choice for tenants and more competition between landlords, which will in turn deliver longer tenancies, stable rents, more professional landlords and better properties for people to live in.

This is why we have introduced the £1 billion Build to Rent fund, and we are offering up to £10 billion in housing guarantees, to bring more developers into the market, and build homes specifically for private rent. These will be high-quality developments that will drive up standards in all areas of the sector. To ensure delivery, quality and affordability, we have appointed a specialist private rented sector taskforce precisely to promote these two schemes to the wider industry. We are also encouraging local authorities to promote purpose-built rental schemes on their land holdings and via the planning system.

We are supporting hard-working tenants while ensuring that good landlords are not penalised by the introduction of unnecessary red tape and rooting out the rogue landlords and letting agents that all too often give the sector a bad name.

I would like to thank the my hon. Friend the Member for Rossendale and Darwen (Jake Berry) for his assistance on this policy development in his capacity as a member of the No. 10 policy board.

Copies of the associated documents are being placed in the Library. My Department is also publishing today the Government’s formal response to the Communities and Local Government Select Committee’s report on “The Private Rented Sector”.