A PropTech entrepreneur is advising landlords worried about red tape to use letting agents.
Neil Cobbold, managing director of rental payment service PayProp UK, says currently planned reforms to the private rental sector are just the tip of the iceberg.
“No matter which party wins the next election, reforming the private rental sector will be high on their agenda. Proposals to reform the PRS and introduce new rules and regulations cover everything from energy efficiency to tax returns to anti-money laundering measures” he says.
“Inevitably, landlords are going to need support complying with an ever-growing range of new measures. Using professional letting agents who routinely ensure compliance across their fully-managed portfolio is the obvious solution for landlords who can’t commit to managing their rental properties full time. The risk from non-compliance is great, ranging from hefty fines to banning orders.“
The long-awaited Renters’ Reform Bill is due to be introduced in Parliament later this year and government leaks suggest it will confirm the removal of Section 21 eviction powers, improved grounds for possession under Section 8, a change from assured shorthold tenancies and the creation of a Property Ombudsman to which every landlord will have to be signed up.
Meanwhile Minimum Energy Efficiency Standards - or MEES - are also to be introduced by the Department of Business, Energy and Industrial Strategy. Currently, all rental properties have to achieve an Energy Performance Certificate rating of at least Band E but there are new proposals are for this to be upgraded to a C.
The timetable is still unclear but it has been understood that it could - but not necessarily will - be imposed on all new tenancies as early as 2025.
In addition, Cobbold says there are already many compliance regulations that landlords must adhere to including 29 that cover health and safety alone.
Alongside the government’s reform programme in England a growing number of local authorities have introduced licensing schemes, while in Scotland there is both a rent cap and eviction ban imposed on private rental sector landlords.
Cobbold adds: “Increasing regulation in the PRS is nothing new, but the volume of upcoming changes means there has never been a better time for landlords to seek out partnerships to help them navigate the new landscape.
“The future is bright for the sector and property ownership will continue to be a sound investment which provides a regular income as well as capital growth. Nevertheless, it’s become much less viable to manage that investment passively.
“Letting agents and landlords make a perfect match. The agents have the professional and managerial expertise to get the optimal return from the landlords’ valuable assets, ensure their tenants have a great rental experience and protect them from the penalties of non-compliance.”
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