1st December 2004

Despite a river of new regulation contained in the Housing Act, landlords, tenants and buy to let investors are well placed for the coming new year says the Association of Residential Letting Agents, ARLA. Rental demand is growing and consumer protection through the letting industry's own initiatives is in place and is constantly being strengthened.

These initiatives include the Tenancy Deposit Scheme, the ARLA compensation scheme, (due to be implemented during 2005,) and the long-standing bonding scheme that safeguards clients' monies, such as rents, deposits and management floats. Meanwhile the number of letting agents with industry- recognised qualifications, like the ARLA Foundation and Advanced levels, now runs into thousands.

Said Adrian Turner, Chief Executive of ARLA, "We have concentrated on practical initiatives that make letting and renting safer and easier. We have qualified staff, the mechanisms for dispute resolution, safeguards for clients' money and we will soon have a compensation scheme up and running to cover failure to meet service standards. This is what the public expects today."

However, as the new Housing Bill passes into law, some sections of the Private Rented Sector could be damaged by new legislation. It still provides no real cure for the social problems caused by bad landlords, rogue agents and anti-social tenants.

"No cost-effective, practical method of policing the rotten apples has been suggested or devised," said Adrian Turner.

Meanwhile, the Housing Bill passed this month could damage the sharers' market while empire-building local authorities might be encouraged to make unnecessary demands on good landlords who hold properties that are close to areas of exceptionally low quality housing. These landlords could find themselves targeted just to fulfil quotas.

Although the Housing Bill introduces a mandatory national licensing scheme for Houses in Multiple Occupation (HMOs), the implementation and the charge for licensing is left to each local authority. While government hopes it has introduced a logical method of ensuring the health and safety of those who live in hostel-style accommodation or in bedsits, the reality is that the sharing of houses and flats, particularly by students and young professionals, has been brought into the same framework, unnecessarily.

Potentially it is now possible that should two unmarried couples and a friend share a house or flat, it will have to be licensed. Under the new Act, if five or more unrelated people share ordinary property it becomes lumped together with hostels or bedsits as a House in Multiple Occupation.

ARLA believes that at a time of rising rental demand - which is the inevitable reaction to a softening sales market - landlords will stop letting to sharers to avoid bureaucracy and extra cost.

"This could kill off the traditional 'flat share scenario' that has served so many so well for so long," commented Adrian Turner.

A further fear of bureaucracy comes from the introduction of selective licensing. This is to cover standards in areas of poor housing. There are fears that areas chosen for the application of this form of licensing could be extended by local authorities to cover much more of the rental market in their locality as a lucrative new source of revenue.

ARLA is calling on government to ensure that there is clear definition, both for HMOs and for precisely where selective licensing might be justifiably required. The Association believes that there must be a clear and uniform understanding of what constitutes an HMO as well as a scale of charges for licensing. Poor housing should also be subject to unambiguous definitions that are applied nationally, regardless of whether a property is tenanted, owner occupied or left empty. Leaving the application of standards, policing and costs piecemeal to local authorities provides for the worst of all worlds.

"The Private Rented Sector provides choice in housing. It is a vital safety valve, especially in areas where local authority and other forms of social housing are in short supply. The industry has applied its expertise to provide the practical solutions where there have been difficulties and the degree of co-ordination between the professional bodies has never been closer," said Adrian Turner. "It is industry professionalism, practicality and co-ordination that will help to boost the rental market during 2005."

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