Nigel Lewis examines the effects of housing policy on the UK property and rental market, and how getting the right balance on legislation is crucial.
If you pay any attention to what goes on in parliament on a day-to-day basis, which isn’t everyone’s idea of fun, then it soon becomes clear that efforts to govern the housing sector fall into two buckets.
The first is the sensible, often grindingly dull but vital legislation that makes the sector tick and within that bucket lies some of the Renters’ Reform Bill. For example, allowing those with pets to access private rented accommodation, having a national register of accommodation and also giving tenants access to redress when things go wrong are all long overdue and sensible.
But in the other bucket lies something very different – legislation that is driven by ideology, and that goes against common sense.
Housing policies are a mixed bag
The Tories were very adept at this and arguably led to their downfall; its natural voter base did not support radical changes to the private rented sector, so its attempts at reform were always stymied.
A good example of this was the proposed regulation of letting agents and property management firms. Too many landlords and investors have stories to tell of (at best) amateur behaviour by a small minority of agents or (at worst) appalling negligence and even criminality.
So forcing agencies to become licenced, for staff to have minimum qualifications and the introduction of a regulator to police the sector seemed like a good idea back in 2019 when the Regulation of Property Agents report was produced.
But successive Tory governments kicked Lord Best’s proposals into the long grass, largely because its supporters dislike ‘red tape’ and prefer ‘small government’.
Labour’s impact so far
I am sorry to report that Labour is fast disappearing down a similar, but politically different, rabbit hole.
The Renters Rights’ Bill, which is a more severe version of the Tories’ Renters Reform Bill, is being loaded with measures (via parliamentary amendments) some of which reek of ideology rather than common sense.
I shall give you one example. Housing minister Matthew Pennycook last month said he wants to outlaw the practice of asking tenants for ‘rent in advance’ or more than a month, saying in parliament recently that the Government “recognises that demands for extortionate rent in advance place a considerable financial strain on tenants and can exclude certain groups from renting altogether.
“We are very clear that the practice of landlords demanding large amounts of rent in advance must be prohibited.”
While this may make for a great soundbite among Labour’s grass roots, and helps establish its role as a movement of social justice, for anyone who manages tenancies this would be problematical, to put it mildly, and disastrous for some tenants.
Because, while Pennycook has slammed ‘rent in advance’ of more than a month, many experts I’ve spoken to say banning the practice will make finding homes to rent more difficult for vulnerable tenants (i.e. those with poor credit and renting histories) as soon as the Bill becomes law.
Most landlords and agents use ‘rent in advance’ to insure themselves against tenants who don’t pass referencing. This doesn’t just include the poorest tenants who have CCJs, ASBOs or Money Orders against their names, but also foreign students and business people who don’t have credit or renting track records within the UK, which is why landlords renting to both types of tenants ask for rent in advance.
Should the sector be run by politicians?
The sector also faces a double whammy. The Renters’ Rights Bill will make it more expensive and time-consuming for landlords to evict tenants who have stopped paying their rent and refuse to move out, often because councils tell them to in order not to make themselves ‘intentionally homeless’.
This will make many investors and landlords fearful of higher-risk tenants because, once they move in, removing them will take – official figures show – on average – six months.
Therefore, how will landlords be able to take on riskier tenants when they are caught between these two things?
As someone who is paid to keep an eye on what Governments get up to, I wonder more and more these days if the management of the UK’s housing stock should be taken out of politicians’ hands and the sector run by those with less ideological aims.
A good example of a better model would be the armed forces, which are run by professionals who provide the best means to defend the UK’s interests militarily, with politicians overseeing their efforts from the sidelines and steering overall defence policy.
This model would work well for housing – task those who understand how housing works and who provide and/or use it on a day-to-day basis to deliver what the nation needs in a pragmatic manner.
It might be worth a try. The political flip-flopping every few years in recent decades has not provided what tenants want, which is affordable homes to rent.
Nigel Lewis is an award-winning journalist and editor who has covered the property sector for 25 years including work on national newspapers, magazines and online news and features including spells at The Daily Mail as well as Channel 4 and, more recently, leading specialist titles covering property investment, buy-to-let and the agency sector.
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