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Government’s private rental sector reforms ‘self-defeating’

Conveyancer trade body criticises approach to boosting private rental supply

13 February 2017

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The government should rethink its ‘confused’ and ‘self-defeating’ approach to reforming the private rental sector, the Conveyancing Association has said.

Last week the Department for Communities and Local Government published a 104-page report pledging to fix England’s ‘broken’ housing market by building more affordable homes.

While the Conveyancing Association was largely supportive of the plans, it has expressed concern over the ‘confused’ approach to the private rental sector.

In its view, support for new-builds for rental purposes has been countered by increased stamp duty for private landlords, banning letting agent fees, and the possibility of extending licensing requirements for houses in multiple occupation.

Lloyd Davies, the Conveyancing Association’s operations director, welcomed the focus on ‘tenure neutrality’ but said the state’s approach to increasing rental property supply was potentially ‘self-defeating’.

‘The housing white paper, on the whole, does present some much-needed joined-up thinking, however, in the case of the private rental sector this seems to be lacking,’ he said.

‘The CA has long advocated a U-turn on the additional stamp duty charge for landlords because we feel it negatively impacts on the UK housing market and overall transaction numbers. It appears at present that the government only wants institutional investment in the PRS and is actively looking to discourage individual landlords – the lifeblood of the sector – from adding to portfolios, or even continuing in this sector.

‘When the need for rental property supply is great indeed, and the government acknowledges its importance, it seems utterly self-defeating to do this. We would urge the government to change its mind on this and make the market far less difficult for individual landlords to deliver much-required supply of properties.’

The association did, however, back many of the measures within the government’s report, namely to improve land registration and leasehold processes.

The body said it was ‘fully supportive’ of the government’s commitment to becoming the ‘world’s leading land registry for speed, simplicity, and an open approach to data… to achieve comprehensive land registration by 2030’.

Beth Rudolf, director of delivery at the association, said ‘developing a stronger and more transparent Land Register is vitally important’.

The government also pledged to develop greater fairness and transparency in leasehold with a view to eradicating all unfair and unreasonable abuses.

The Conveyancing Association, which has campaigned on the issue of leasehold reform for many years, said it was encouraged by the focus on leasehold and welcomed the prospect of leasehold reforms forming part of the Law Commission’s 13th programme of law reform.

‘The CA’s leasehold campaign has particularly focused on lease administrators’ charges and the delays that can hold up the leasehold process,’ said Rudolf.

‘We will continue to offer our views on how these can be overcome, including measures for the adoption of a charging structure, a register of lease administrators, plus a redress scheme for consumers and a commitment from those companies to respond within a required timescale. We will certainly be contributing to forthcoming consultations in this area.’

To improve leasehold education, the association said it will publish a consumer guide on leasehold costs covering many of the questions raised about purchasing a leasehold property and the charges that come with it.

Matthew Rogers is a reporter at Solicitors Journal

matthew.rogers@solicitorsjournal.co.uk | @lex_progress

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