BLOG: ‘This week’s elections will influence the future of the private rented sector’

This Thursday, voters up and down the country will be casting their votes in local elections which are likely to reflect on the Conservative Government’s turbulent term to date and provide some indication as to the likely result of the next general election.

For private sector landlords there will be many pressing and immediate local issues – so which do you take into account when casting your vote? And if a candidate turns up on your doorstep, how can you use the opportunity to lobby for much-needed change in support of the private rented sector?

Short-term lets

Holiday lets may now be under threat in certain areas of the country. Housing Secretary Michael Gove told Parliament last month that that there was a “problem in the private rented sector, particularly in beautiful parts of our country, where homes are being turned into Airbnbs and holiday lets in a way that impedes the capacity of young workers to find a place where they can stay in the locale”.

Consequently his Department announced its proposal for a new planning use class for short term let properties.

According to the consultation document, a use class C5 would permit local planning authorities to “consider planning applications for new build short term lets and grant permission conditioned to the new class where appropriate”.

Existing properties would automatically fall under class C5. But for new short-term lets, planning permission would be required. This is an important consideration for landlords wishing to add to their short term lets portfolio.

Furthermore, the Department for Culture Media and Sport has launched a separate consultation on a new registration scheme for short term lets to be introduced through the Levelling up and Regeneration Bill.

Selective licensing

Selective licensing effectively gives councils the ability to cap the number of HMOs. In such areas, all private landlords must obtain a licence and if they fail to do so, or fail to achieve acceptable management standards, the authority can impose a fine.

According to the legislation, Selective Licensing Scheme (SLS) should only be introduced in response to a problem with low housing demand or where there are significant and persistent problems of anti-social behaviour and should be consistent with the council’s housing strategy.

Landlords looking to expand their portfolios in areas with SLSs should question candidates as to why the council has introduced (or plans to introduce) selective licensing, how the (potential) impact on landlords can be reduced and how any funds already raised through selective licensing have been used.

HMOs

Another contentious issue currently awaiting a response is the question of individual council tax bandings per room for HMOs. Proposals to remove the contentious tax are contained in the recent consultation Council Tax Valuation of Houses in Multiple Occupation. Currently the tool is used inconsistently and its impact comes at a considerable cost to landlords.

Renters’ Reform Bill

The Renters’ Reform Bill includes changes to open ended tenancies (specifically student lets) and the abolition of Section 21. Our own research into the use of Section 21 found that suggestions that it is widely misused are vastly over-stated – some 80% of landlords had never used Section 21 and of those that had, 6% did so when the tenant was in breach of the lease and only 3% where the tenant was not in breach of the lease.

Landlords have an opportunity to quiz the door-stepper on their knowledge of and support for these contentious policies, and perhaps to ascertain whether candidates understand the pressures being put upon landlords – or wrongly believe that penalising the private rented sector will somehow resolve the housing crisis.

Allison Thompson is National Lettings Managing Director of Leaders Romans Group