During beers down the pub with friends unrelated to the property industry a few weeks ago, I was asked what ‘all the fuss was’ over the ‘renting reforms’. It had been at the top of most national newspaper new websites that day and those gathered at the drinking establishment had not – unlike the readers of this magazine – been paying much attention to the Renters (Reform) Bill and its progress from a promise by then Prime Minister Theresa May to draft legislation.
After a pause for thought, the best comparison I could muster was a Government deciding what to do about a rickety bridge. This river crossing had for many years served the traffic traversing it well without much need for action or debate. And then bridges became a hot potato as traffic increased and queues built up to use its water-resisting abilities.
But rather than build a new bridge, or maybe several new bridges, the Government decided to vastly increase the regulation of bridge maintenance and charge its operator higher taxes which, even the most commercially moronic could see, was not going to reduce the queues either side of the crossing or the creaks and groans coming from its sagging struts.
A bridge too far
And that is where we are now. Successive Tory Governments have attempted unsuccessfully to bypass their own ‘heartland’ voters and carpet the Home Counties with Redrow’s and Barratt’s finest bricks and mortar, thus diminishing supply as our population continues to rise.
As readers will be aware, this is not just a supply problem. Keen to appear to be the tenants’ champion, Gove and his ministerial compatriots have packaged the Renters (Reform) Bill to try and patch up our groaning and creaking housing sector. But it doesn’t solve the key problem. Landlords are powerful in areas where demand has continued for years to dwarf supply.
Some of its measures are required, I would hasten to add. For example, it’s about time local authorities were empowered and better funded to tackle rogue landlords and agents, and a national register of landlords has been needed for some time, as has a common basic ‘decent home’ standard for the PRS. But on the other hand, banning Section 21 – the key plank of the Bill – will achieve very little other than making it more difficult for landlords and agents to evict all but the most extreme cases of bad behaviour or rent debt.
The Renters (Reform) Bill is going to create daily operational and admin headaches for agents.
Agents reading this may shrug their shoulders and deduce that none of this broad-brush wonkery affects their small patch of Albion. But it already is and will do increasingly. The Renters (Reform) Bill is going to create daily operational and admin headaches for letting agents, increase their workload overall and ensure they do more work for landlords for the same fee. It will also hasten consolidation within the PRS as the small-portfolio landlords move into the safer and less heavily taxed short lets market, into commercial or wherever they think their retirement nest egg might do better.
My expectation is that the worst aspects of the Bill will be diluted in the greatest tradition of British legislative ‘fudgery’ and some of its self-defeating elements improved to make sense. Let me give you an example – the Bill promises to ban agents and landlords from ‘blanket’ banning tenants in receipt of benefits. From a social justice perspective this makes sense – it’s unfair and unpleasant to make life difficult for people already struggling in life. But the reason most landlords ban tenants like this is that they have little desire to get involved in the housing benefits and/or Universal Credit system.
Rather than make the payment of such benefits direct to landlords as standard, tenants on benefits are to be given the right to challenge and/or report agents for refusing them – although proving this going to be difficult for the redress scheme or schemes tasked with policing this system.
Were my friends down the pub convinced by my short but exasperated monologue? Possibly. But overall, I’d say the Bill is just another example of reforming legislation that sounds good on page three of The Sun newspaper, but in the real world will improve little for tenants at the bottom end of the PRS, and just create more red tape for those who manage properties across the whole of it. We need more and better-quality rented homes – build-to-rent anybody?