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Industry News


Consultation on new rent standard launched


The Regulator of Social Housing is consulting on a revised five year Rent Standard, due to come into effect from 1 April 2020. The process ends at the end of July, with the new standard bringing an end to the annual round of one per cent rent cuts at councils and housing associations. It follows Housing Secretary James


Brokenshire’s direction to the regulator, back in February. The standard provides for the following:


• For the regulator to also regulate rents charged by social housing stock- owning local authorities, aligning the regulation of council rents with private registered providers;


• To lock in the annual reductions in social rents between 2016 and 2020, implemented through the Welfare Reform and Work Act 2016;


• To restrict rent increases on social rent and affordable rent properties by up to CPI+1 per cent annually from 2020 for a period of at least five years – striking a balance between the interests of landlords, tenants and taxpayers


• To reinstate the five per cent flex for general needs stock and 10 per cent for supported housing providers – allowing registered providers discretion over the rent set for individual properties, taking into account local circumstances and affordability in consultation with tenants.


Fiona MacGregor, chief executive of the RSH, said: “The direction itself has previously been consulted on by the Government, but the aim is to ensure that the setting and management of rents is clear and easy to understand for all registered providers of social housing. “The long-term rent settlement should


help provide a stable financial environment for the social housing sector to make the best possible use of its resources in supporting the delivery of new homes and effectively managing and maintaining properties, while protecting the interests of social housing tenants.” The standard also states that private


registered providers may be granted exemptions from the rent standard, if the regulator feels that complying with the standard jeopardises its financial viability.


N


early half of all private landlords and letting agents are more likely to sell some or all of their rental properties as a result


of Government plans to end Section 21 repossessions, so-called ‘no fault’ evictions. The headline outcome from the Residential


Landlord Association’s biggest ever survey of more than 6,500 landlords and agents showed that more than 46 per cent of them plan to sell. The research also found that over 40 per cent of


landlords are waiting for other planned changes by the Government to become clear before they make decisions on their ability to provide homes to rent. The findings come just weeks after the Royal


Institution of Chartered Surveyors warned of private rents increasing by an average of three per cent a year over the next five years as a result of landlords being less prepared to rent property while demand from prospective tenants increases. In April, the Government announced plans to


end Section 21 repossessions, alongside proposals on improving the Section 8 process, under which landlords can repossess properties on grounds such as rent arrears or anti-social behaviour. This process requires landlords to apply and be


granted permission to repossess via the courts, yet official data shows that it takes over five months on average from application to repossession. According to the survey, of those landlords with experience of such repossessions, 79 per cent did not consider the courts to be reliable. Almost 91 per cent of landlords supported the


establishment of a special housing court, bringing together all housing disputes under a single body.


REPOSSESSION GROUNDS With concerns that landlords selling property will usually require tenants to be evicted, the RLA’s survey found that 48 per cent of respondents said that they would be encouraged to purchase a


16 | HMM June/July 2019 | www.housingmmonline.co.uk


More than 6,500 landlords and agents showed that more than 46 per cent of them plan to sell


property to rent with a tenant in situ if they could reclaim the three per cent stamp duty levy on the purchase of rental homes on the condition that the tenants can remain in the property for a year or more. The survey also found widespread support for


new grounds to be established upon which landlords can regain possession of a property. These grounds could be used by landlords who wanted to sell a property, for example, or those who want to let to groups such as students, who do not require the indefinite style tenancies being proposed by the Government. David Smith, RLA policy director, said: “Security


of tenure means nothing unless the homes to rent are there in the first place. With the demand for private rented housing showing no signs of slowing down it is vital that landlords are confident that they can quickly and easily get back their property in legitimate circumstances. “While the system should clearly be fair to


tenants, it needs also to support and encourage good landlords. Our survey shows how complex it will be to ensure that the grounds on which landlords can repossess properties are both clear and comprehensive. “This needs to be underpinned by a court system


that is fit for purpose and properly resourced. At present it is neither. It is vital that the Government’s planned reforms are carefully considered to avoid finding ourselves needing to reopen this whole issue later down the line.”


Half of private landlords likely to sell over Section 21 plan


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