Agent control scheme to lift letting sector
The British residential leasing market received a government boost recently with the announcement of a scheme to raise standards within the sector.
The government hopes the introduction of the National Approved Letting Scheme (Nals) will encourage owners of Britain's 250,000 empty homes to offer them for rent.
The initiative, launched by the Empty Homes Agency, is intended to give prospective landlords the confidence to let out properties by ensuring greater professionalism among letting agencies and by introducing insurance to cover losses resulting from disputes and agencies' bad practice.
Letting agencies and property managers joining the voluntary scheme must have professional indemnity insurance and a complaints-handling procedure for clients and tenants. All members, apart from housing associations, must provide a protection scheme for deposits.
Housing Minister Hilary Armstrong said: 'Under this scheme, owners can feel more confident about letting their properties. I hope the guarantees of properties being managed by professionals, meeting strict criteria, will lead to more homes being made available for private renting.' The initiative was welcomed by the Association of Residential Lettings Agents (Arla), which has been campaigning for tougher action to stamp out rogue letting agents, some of whom were known to have stolen landlords' and tenants' money.
According to Yolande Barnes, research director at property consultant FPDSavills, many of the empty properties which may now become available are above-shop flats.
Landlords are reluctant to convert, let alone let out these flats, because they form part of commercial premises. This could change, however, following the introduction of Nals.
Many of these properties were highly lettable as their central location within a community and accessibility to transport and other amenities made them attractive to young people, she said.
Typical younger tenants would probably be first-job workers, home sharers and mobile workers, whose jobs made it difficult for them to settle in one area, thus leading them to rent rather than buy homes.
Ms Barnes considered it unlikely that the addition of these flats to the private rented sector could worsen the problems of oversupply that were becoming evident in London.
Nals has been launched as part of the government's drive to create 4.4 million new homes by 2016 to meet projected demand. Therefore, the letting of the empty flats formed one small part of this policy, and it was unlikely that all of them would come on to the rental market anyway, she said.
There are no problems of oversupply in the rest of Britain, outside London.