Sean Hooker: End of an era - so what's next for lettings?

The ill-fated Harold McMillian is credited with saying in response to a question on the hardest thing about being Prime Minister: “Events my dear boy, events” - and, boy, have we had some events in the last month.

Two epochs end within two days of each other

The selection of a new Prime Minister was anticipated - and, of course, the inevitable changes to government and the new Ministers who have found favour with our third female supreme leader were always going to take a while to get up to speed with their brief.

However, none of us could have anticipated the sad demise of Queen Elizabeth II, truly an end of an era. Rightly, the country went into an extended period of hiatus, reflection, and remembrance.

We are therefore no clearer down the line of knowing what the impact of a change at the top will mean for the reform agenda in the private rented sector - and this cannot be a good thing.

What we do know, however, is nature abhors a vacuum and this industry is nervous.

The evidence is in: Goodlord's State of the Lettings Industry Report

Goodlord published its annual State of the Lettings Industry Report just on the cusp of the end of the second Elizabethan Age and the findings do not reflect the optimism of the PM that it will be a “new era of hope and progress, our new Carolean age”.

The report reflected the responses of over two and half thousand stakeholders in the sector - landlords, agents and tenants - and examined the sentiments of the participants on issues such as the cost-of-living crisis, the housing stock shortfall, the impact of Proptech on the sector and of course the White Paper, legislation and reform.

You can download your free copy on Newsagent, so I won’t comment in detail on the findings, which are eloquently presented in the report. However, I did have the privilege of seeing the report in advance and commenting on it.

Rent freezes and rent controls

What is clear is the longer we wait for the changes, the more the uncertainty and speculation will increase and this will lead to the market not adapting and addressing the problems the reforms are trying to deal with.

We are already seeing the knee jerk reactions of politicians in Scotland introducing emergency measures to freeze rents and suspend evictions. Our friends north of the border are the masters of their own destiny.

However, the moves are reverberating in England and with a raft of relief measures being announced to alleviate the effects of inflation, soaring energy prices and economic uncertainty, it would not be inconceivable that some measures may be introduced.

I remain agnostic on rent controls in so far as the existing models are concerned and certainly if they worked, without detriment to rental property supply and unfairly treating landlords, there could be a case to introduce them.

I am not however convinced that they would achieve their aims. This is a personal view and any moves to involve a process of mediation, appeals and negotiation as part of a rent review process, would be welcomed.

Collecting data on rent increases

The most vulnerable in our society must be protected, but any measures taken must be evidenced based and proportionate.

I was therefore very interested to see that the Valuation Office Agency is appealing for data from landlords on what rents they are charging. The data they collect by 30th September will be used to help set the Local Housing Allowance rates from April next year.

The more information they have the more accurately the calculation will be and you can still send details of your rents to them using the prescribed forms.

Consultation on housing standards

I was also very interested to see that the government has released a consultation on the Decent Homes Standards. This is a key element of the white paper and plan as outlined, was to mirror the standards in the social housing sector and have a consistent and easier to comply and enforce set of indices to measure housing quality.

The consultation is open until 14th October, so quite a short window but this may indicate an urgency to get the proposals firmed up.

I have noticed that the concept and ideals of raising property standards is welcomed by the National Residential Landlord Association and Propertymark. However, the challenges of bringing up rental properties to be safe but also energy efficient and environmentally friendly, will not be cheap and resources will have to be found to fund the ambitions.

If it relies on the private funds of landlords, this will inevitably lead to further rent increases or stock shortages. You start to see the web of how everything is linked and the knock-on effects that reform will have.

Of course, I will continue to try and unweave what all this means and see if what is revealed is a sticky trap or a holistic and coherent strategy for the sector.

I will therefore be joining Oli Sherlock on 20th October for another live webinar to answer your questions on the White Paper and explore further what we have learned and the direction things are going.

An optimistic note

I started with a quote from one former Prime Minister, and alluded to one from the current one, so I will end with one more. I hope like the eternal optimist, Sir Winston Churchill, who said it, this is not just hope over expectation but the start of something real.

“The era of procrastination, of half-measures, of soothing and baffling expedients, of delays is coming to its close. In its place we are entering a period of consequences.”