Sean Hooker: 6 key insights from the "Lettings and the legal tsunami" panel

7 December 2021

From landlord registration and redress, to enforcement and consumer rights - Sean Hooker, Head of Redress at the Property Redress Scheme, delves into a panel at the Negotiator Conference 2021, to highlight the expert speakers' top lettings legislation insights.

“Everything changes but change itself. Everything flows and nothing remains the same...You cannot step twice into the same river, for other waters and yet others go flowing ever on." This quote, attributed to Heraclitus the Greek philosopher, could be used to describe the challenges facing the property agent sector over the last decade or so, but certainly will be the mantra for the years to come.

Over the last year, I have spent a lot of time examining, preparing, and predicting what the future holds for the private rental sector and how businesses will adapt, evolve, and, fingers crossed, thrive. It was therefore a real privilege and pleasure to hear one of journalism’s most prominent soothsayers and commentators, Robert Peston, at The Negotiator Conference 2021 joined by a first-class panel of expert speakers had been gathered to be interrogated by Mr Peston and of course the audience: Ben Beadle of National Residential Landlord Association; Valerie Bannister, currently at Your Move, formerly ARLA President and current Director of Propertymark; David Cox, Legal and Compliance at Rightmove and ex-ARLA CEO; and Paul Shamplina of Hamilton Fraser, founder of Landlord Action.

Given the title of the debate, Lettings and the Legal Tsunami, it doesn't take a genius to work out the themes for the discussion and the general mood of the anticipating audience. However, what we actually got was a considered and constructive analysis of the potential reforms in the pipeline, this despite the Government leaving us all hanging, with the delay in publishing their Renters' Reform Bill White Paper. However, from the collective insights from the panel, it is relatively clear what the directions of travel will be. Whilst the devil will be in the detail and the timetable for the reforms needs to be set, the next four to five years will see radical changes, and these will have a major impact for agents.

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Regulation of Property Agents

Bannister pointed out that the industry itself has been calling for many of the reforms under the Renters' Reform Bill for years. However, what we have to focus on is the unforeseen consequences that will come from this. Her view is that the key to the success of creating a sustainable, healthy market that works for agents, landlords, and tenants, is the implementation of the Regulation of Property Agents (RoPA). She pointed out that much of the heavy lifting on this has already been done, through RoPA. If the government gives the green light to this, then the framework will be in place for the other reforms. This is the view I very much endorse and have said so frequently.

Landlord registration

Peston was curious about landlord registration and wondered whether this would be the panacea that many believe. It was interesting that the panel was not anti the idea. Beadle thought it was a good thing, as the reality was it wouldn't really change the quality and standard of properties in the rental sector. He felt that this was clearly evidenced by the ineffectiveness of the plethora of local authority licencing schemes up and down the country and the experiences of the devolved countries of the UK, which already have such registers in place. Cox went further, saying it just wouldn't work. Licencing, according to him, has failed, up and down the country.

Landlord redress

Shamplina pointed out that if you introduced landlord redress, this would de facto be a landlord register. Beadle totally agreed with this, adding that such a scheme would level the playing field and that tenants who are driven by the property and not who managed it, should have the same expectations and rights whether it was rented out by a landlord or agent. Bannister added that the way forward was for the government to fully adopt the idea of property “MOTs” tied to the unique property reference number (UPRN).

Enforcement

All four panellists were in agreement that such a register would only work if there was adequate funding for enforcement. The proposed changes to the eviction process and court reform were discussed at length and Shamplina shared his on the ground experience of how this was impacting landlords. Beadle was quick to remind everyone that the landlord community had shown great forbearance during the pandemic but was now running out of patience as arrears for many reach unsustainable levels. Again, resources are key to the delivery of successful change, with courts and the bailiff processes needing significant input. Shamplina also highlighted the importance of putting in place alternatives to court such as mediation.

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Lifetime deposits

Lifetime deposits were also discussed, and Beadle was positive that the government had listened to the industry and a workable solution can be found using bridging insurance. However since the Tenant Fees Act and advent of no deposit alternatives, the issue of affordability that drove the proposal were less contentious.

Consumer rights and energy efficiency

Cox highlighted the challenges faced in the implementation of all the changes and used the example of the disclosure of material information that is now expected to be provided to consumers right at the start of entering into a transaction. From a portal point of view, he believed they were doing their part, but the challenges for agents to collate and present all information should not be under-estimated. He also highlighted that the energy efficiency and safety requirements that will be required, will be absolutely paramount for agents to be on top of as the government pushes forward with their climate change agenda and property standards. The announcement of changes to carbon dioxide alarm legislation only a few days before is a typical example for legal requirements the average agent has to keep up to speed with.

The sector's obligations

At the end of the day, it will be down to those on the ground to roll up their sleeves and make things work. For the vast majority of you, this has always been the case. The sector is resilient, adaptive, and innovative, and will make whatever it is presented with effective. For those that embrace the process, I am confident that even with the potential scale of the wave crashing towards you, the surf boards will come out and you will ride the crest with aplomb.

For others who think that they can just carry on the same, it will be more challenging. As the quote attribute to CS Lewis goes, “Isn’t it funny how day by day nothing changes, but when you look back everything is different?” Being forewarned is forearmed, and therefore using the formidable resources from your expert trade organisations, keeping in touch with all the developments in the industry through regular contact with breaking news and opinion on mediums such as Goodlord's Newsagent, The Negotiator and Landlord Zone, and of course fully engaging with the White Paper process when it eventually comes out is essential.

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