RENTAL POLICY

Parliamentary panel proposes changes to UK rental rules

PUBLISHED : Wednesday, 24 July, 2013, 12:00am
UPDATED : Wednesday, 24 July, 2013, 3:10am

Recommendations for overhauling regulations covering rental properties in the United Kingdom have been welcomed by landlords and letting agents.

The British Parliament's Communities and Local Government Committee wants the government to make 47 changes to the way the country's private lettings sector operates. Hong Kong investors who let out residential property in Britain could benefit if the committee's recommendations, which were put before Parliament last week, are implemented.

A recommendation for speeding up the eviction process for tenants who fall behind with rent payments would be welcomed by Hong Kong landlords, said Marc von Grundherr, lettings director at London-based Benham & Reeves Residential Lettings. The current eviction process, he said, was embarrassingly slow and could take up to nine months to complete in extreme cases if a tenant knew how to play a legal system that was biased against landlords.

"Landlords can't do anything to evict a tenant until they are two months in arrears, and then you have to apply to court for a hearing and that can take two to three months, and then the tenant can ring up on the day of the hearing and say they are ill, so the hearing gets delayed for another 14 days, and so on," said Grundherr.

How quickly evictions might take place in future would be decided by the government if it adopts this measure.

Another recommendation is for longer tenancies. Currently, most tenancies are restricted to one year by mortgage lenders, but demand from tenants to stay at properties for up to five years is growing, and enabling such extended tenancies would benefit landlords because it would generate a predictable income stream over a longer time span with fewer void periods.

The committee also wants tenancy agreements written in plain English with fewer legal terms, so tenants and landlords can better understand their rights and responsibilities, a move welcomed by the National Landlords Association.

In a bid to root out rogue property investors, the committee wants landlords to provide contact details in tenancy agreements. It also wants landlords who don't carry out maintenance works fined, and for local authorities to recoup rent for sub- standard accommodation let to tenants whose rent is paid by local councils.

The MPs want councils to have the right to demand landlords join accreditation or licensing schemes. Newham Borough Council in East London runs a landlord licensing scheme, and other authorities are looking at doing the same, or running versions limited to particular types of property. Landlords may only let out property in Newham if it comes up to standards acceptable to the council's inspectors.

The committee rejected the idea of introducing rent controls.

Select committees shadow the work of government ministries, and their recommendations have been accepted in the past. Even when a government does not adopt a committee's recommendations, these are sometimes taken up by media and pressure groups who can later influence decision-making.

The British government must respond to the committee's report within two months.

Calls for reforming the private rental sector have grown louder as it has grown in size. According to government figures published earlier this month, more Britons now live in private rented accommodation than social housing for the first time in several generations. Eighteen per cent rent privately, while 17 per cent rent from local authorities and housing associations.

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