New regulations were proposed by the previous administration in response to the Rugg Review of the Private Rented Sector, but have been judged by the new coalition to introduce too much additional red tape.
These included a National Register of Landlords, regulation of letting and managing agents, and compulsory written tenancy agreements.House covered in red tape
Speaking at the first Communities and Local Government questions since the formation of the Coalition Government, the Minister confirmed that the legal framework already in place strikes the right balance between the rights and responsibilities between landlords and tenants, with the vast majority of private tenants reporting they are satisfied with the service they get from their landlords.
Instead, Mr Shapps called on councils to use the wide range of powers already at their disposal to tackle the minority of rogue landlords that fail to provide good quality accommodation and blight local neighbourhoods.
Councils already have powers to require landlords to take action to rectify hazards in their property and where landlords resist, to make and charge for improvements, and to prohibit use of the affected parts of the property.
Local authorities also have discretionary licensing powers to tackle areas blighted by poorly managed privately rented stock.
He said:
"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.
"So today I make a promise to good landlords across the country: the Government has no plans to create any burdensome red tape and bureaucracy, so you are able to continue providing a service to your tenants.
"But for the bad landlords, I am putting councils on alert to use the range of powers already at their disposal to make sure tenants are properly protected."
David Brown, Commercial Director of LSL Property Services comments:
“We want to see the whole private rented sector meet proper professional standards. Most lettings agents, including Your Move and Reeds Rains, had nothing to fear from regulation and may have benefited from the improved reputation of the sector, without having to change their procedures or approach to customers.
"Regulation would have plucked the bad apples from barrel, removing the minority of rogue agents who tarnish the image of the private rental market. Now the onus will be on landlords and tenants to vote with their feet. They should demand the best possible service, ditch rogue agents and seek out higher quality operators.”
John Heron, Paragon Mortgages' managing director, says:
"The total rejection of the Rugg Review Recommendation proposals looks ill-thought out and ignores many of the positive outcomes that certain proposals could have generated. Whilst we applaud moves to scrap additional red-tape for landlords, who are already heavily regulated, there remains a need for mandatory regulation of letting and managing agents.
"There are no mandatory controls of letting agents at present, leaving both landlords and tenants at the mercy of the rogue elements that unfortunately blight the sector, undermining the good work carried out by the majority of agents.
"We have seen agents leaving landlords and tenants out of pocket all too often during this economic downturn by running off with deposits and rent. The Government could have put an end to this by requiring agents to belong to one of the existing voluntary licensing schemes from the likes of the Association of Residential Letting Agents or the National Approved Letting Scheme.
"We welcome the move to cut landlord red tape. Local authorities already have wide-ranging powers to police landlords operating in the private rented sector and, where required, they should make sure they are using those powers effectively.
"As Housing Minister Grant Shapps highlights, the vast majority of the UK's tenants are happy with the service they receive from their landlord and additional regulation was unnecessary and burdensome.
"The private rented sector is critical to the housing market going forward and needs to expand to ensure that it continues to meet growing demand from tenants. Tenant demand is already exceeding the supply of private rented properties, resulting in rental inflation.
"Reducing bureaucracy and red-tape will encourage further investment in the sector, but the Government should also examine how it can increase supply through, for example, helping to widen buy-to-let mortgage availability and creating a tax regime that supports long-term and sustainable investment from landlords."
