The Institute of Economic Affairs (IEA) has called on Government to deregulate the private rented sector (PRS) and alleviate the ever-increasing burdens on landlords.
Referring specifically to the ‘Tenants Charter’ proposed by Secretary of State for Communities and Local Government (CLG), Eric Pickles, the IEA argue that giving tenants the power to legally demand longer term tenancies from landlords ignores market changes and individual circumstances of a landlords cash flow.
The IEA state that “The new rules must be seen in the context of an already heavily regulated market”; arguing the regulatory burden on landlords is already so great that disincentive to invest within the private rented sector (PRS) is already rife and any further obligations are likely to deter anyone looking in.
Amongst the pressures that a landlord must take on are:
- Housing conditions and the renovation costs to adhere to standards
- Strict and costly local authority licensing schemes
- Proposals of landlords checking a tenants immigration status, coupled with heavy sanctions
The situation is something that the RLA has been arguing for some time. Landlords are often seen as large property owning millionaires who have little concern for tenant or property condition and are only interested in retrieving rent. The reality is obviously different and the burden of regulation weighs heavily upon people that may be part-time or even accidental landlords.
The IEA say in their publication: “It may seem counterintuitive, but the best way to help tenants in the long-term is to reduce the regulatory burden on landlords rather than increase it.”
The IEA evokes the spectre of ‘rent controls’ which plagued the PRS to the point of near extinction taking its stock to fall to at least 10 per cent of total housing stock before being abolished in 1980s…and it is being touted for a return. Rent controls is a topic that Alan Ward has been extremely vocal in speaking out against.
The IEA concludes by saying that planning and building regulations should be ‘liberalised’ in order to give lower income families the option of owning their own homes.