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RLA’s 10 recommendations for Boris

RLA
Written by RLA

The Residential Landlords’ Association has submitted its response to Boris Johnson’s consultation on the private rented sector…

The Residential Landlords’ Association has submitted its response to Boris Johnson’s consultation on the private rented sector.

The Mayor of London’s proposals for a new, London-wide accreditation scheme has met with warm support from the RLA; but the association is urging Mayor Johnson to go even further, with ten key recommendations outlined in its response:

#1 Adopt the RLA’s Small Plots policy

The RLA is concerned that the Housing Covenant, and current Government policy, does not include any provision for encouraging small and medium sized investors to finance growth in the private rented sector. Therefore, the RLA recommends that Mayor Johnson adopts the RLA’s ‘Small Plots’ policy to regenerate small plots of local authority-owned land for the creation of more homes in the private rented sector.

#2 Support the RLA’s call for one definitive rent level survey

Several rent surveys currently exist, providing conflicting information on rent levels, thereby casting doubt on the reliability of affordability statistics. Reliable evidence is needed to inform decisions by investors and policy makers. The RLA is calling on the Government and the industry to establish a single, clear, rent level survey that gives all sides a credible basis from which to make future decisions affecting the sector – and wants Mayor Johnson to support its call.

#3 Support tax reform of the PRS

It is imperative that residential landlords are treated like other businesses for tax purposes with a tax system that helps promote housing supply for rent as well as quality accommodation. The RLA has published its tax reform proposals, which include rollover relief for reinvestment of capital gains, and believes the Housing Covenant would benefit from the Mayor supporting its proposals.

#4 Develop alternative sources of finance for the PRS

Historically the sector has relied on banks for the bulk of its loan funding.  With all the problems and constraints faced by banks the RLA believes that the sector can no longer depend on the banks to provide the necessary capital for purchase or improvement of properties.  Alternative sources such as bond funding need to be found.

#5 Recognise the drawbacks of Section 106 and the adverse impact of the community infrastructure levy on build-to-rent

In terms of supply we need to recognise the draw backs of Section 106 contributions as well as the adverse impact of community infrastructure levy on build-to-rent developments and conversions. The PRS needs to be expanded to cater more and more for the less well-off who cannot currently access social housing or owner/occupation.  Expecting them to contribute to affordable social housing for those in a similar financial position to themselves is unrealistic and will inhibit housing supply.

#6 Streamline regulations to ensure criminal landlords are caught, and good landlords are not targeted

The RLA has identified over 100 regulations that govern the private rented sector, some dating back to the 1730s. The RLA believes that landlords face an unfair regulatory burden, and that local authorities are bogged down by legislative overload. That is why the RLA believes the myriad of rules and regulations urgently needs to be streamlined, in order to concentrate activity on enforcement and criminals, rather than bureaucratic box ticking. Furthermore, an active accreditation scheme is vital to allow good landlords to self-regulate, freeing up the resources of local authorities to pursue criminal landlords with confidence.

#7 Work with the RLA to develop a longer term tenancy agreement that protects both tenants and landlords

With work on the RLA’s longer term tenancy proposal at an advanced stage, we would welcome the Mayor’s input in order to create an agreement that is right for the London market.

#8 Work with the RLA to link tax reform with property regeneration

In the proposed Housing Covenant document the Mayor has intimated that he wishes to see any changes to the tax regime counterbalanced by “commitments from landlords to improve properties” and would like to, “…explore how this could be achieved.”

#9 Support RLA calls for the retention and extension of LESA

The RLA believes landlords who want to undertake energy improvements independently of Green Deal should be able to claim tax allowances for the work they undertake. The RLA is campaigning for the Government to retain and extend LESA – the Landlords Energy Savings Allowance.

#10 Support RLA calls for landlords to have the choice of paying the Green Deal charge directly

The RLA believes that in order to avoid tenant resistance, and allow tenants to see real savings on their energy bills, landlords should be allowed to choose to pay the Green Deal charge directly.

In its response, the RLA concludes, “We believe that Mayor Johnson’s proposals contain many positive developments for the PRS, and that he has correctly identified some of the key issues that are acting as barriers to a better sector.

“However, we are not yet wholly convinced that the Mayor has correctly identified the backbone of the PRS as being landlords with small to medium-sized portfolios. Without their participation, the housing sector in London would be facing a real crisis. Whilst we welcome more institutional investment, the RLA hopes that Mayor Johnson will recognise the importance of these landlords, and the crucial role they play in providing good and affordable housing in London.

“Whilst some of the recommendations rely heavily on Government legislative reform, we believe that with the Mayor’s support this reform can be achieved; and, if adopted, our recommendations will strengthen the Mayor’s objectives and provide extra support for the backbone of the PRS.

“The RLA would very much welcome the opportunity to discuss these issues in greater detail with Mayor Johnson in the very near future.”

Further information

About the author

RLA

RLA

The Residential Landlords Association (RLA) represents the interests of landlords in the private rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and an additional 16,000 registered guests who engage regularly with the association, we are the leading voice of private landlords. Combined, they manage almost half a million properties.

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