Managing Director of PayProp UK, Neil Cobbold, believes the current raft of proposed measures set to affect the PRS this year will be followed by further reforms.
He said: “No matter which party wins the next election, reforming the PRS will be high on their agenda. Proposals to reform the PRS and introduce new rules and regulations cover everything from energy efficiency to tax returns to anti-money laundering measures.
“Inevitably, landlords are going to need support complying with an ever-growing range of new measures. Using professional letting agents who routinely ensure compliance across their fully-managed portfolio is the obvious solution for landlords who can’t commit to managing their rental properties full-time. The risk from non-compliance is great, ranging from hefty fines to banning orders. “
Signed up
In what has been described as the biggest shake-up of the sector in England for decades, the Renters’ Reform Bill is due to be introduced in Parliament later this year.
The bill is thought to contain the removal of Section 21 (so-called ‘no fault’) evictions, improved grounds for possession under Section 8, the change from assured shorthold tenancies and the creation of a property ombudsman to which every landlord will have to be signed up.
Minimum Energy Efficiency Standards (MEES) are also to be introduced by the Department of Business, Energy and Industrial Strategy. Currently, all rental properties have to achieve an Energy Performance Certificate (EPC) rating of at least Band E. New proposals are for this to be upgraded to a C. The timetable is still unclear but it could be imposed on all new tenancies as early as 2025.
In addition, there are already many compliance regulations that landlords must adhere to including 29 that cover health and safety alone.
Failure to comply
Alongside the central government’s plans to reform the PRS in England, a growing number of local authorities have introduced licensing schemes in an effort to improve housing standards and reduce anti-social behaviour. Failure to comply with the terms of these licences can also carry severe financial penalties.
Cobbold said: “Increasing regulation in the PRS is nothing new, but the volume of upcoming changes means there has never been a better time for landlords to seek out partnerships to help them navigate the new landscape.
“The future is bright for the sector and property ownership will continue to be a sound investment which provides a regular income as well as capital growth. Nevertheless, it’s become much less viable to manage that investment passively.
“Letting agents and landlords make a perfect match. The agents have the professional and managerial expertise to get the optimal return from the landlords’ valuable assets, ensure their tenants have a great rental experience and protect them from the penalties of non-compliance.”
