National Landlords Association (NLA): UK trade association for private residential landlords

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Home > Campaigning > Rugg Review

Independent review of the private rented sector

NLA Response to Government Proposals
August 2009

NLA news release:
• Confusion reigns over UK private landlord registers

Downloads:
• NLA Response to the Government to the Rugg Review
[ 695KB]

NLA and Crisis Working Together at Party Conference

The NLA and, homelessness charity, Crisis have joined forces to outline a combined vision for the future of the private-rented sector at this year’s Conservative Party Conference.

Launched in Manchester at an event co-hosted by the organisations, the ‘New Directions for Renting’ booklet [ 862KB] outlines a vision for a thriving private rented sector that is commercially attractive to landlords and provides people in housing need with well managed, well maintained homes.

The Government's response to the Rugg Review

The National Landlords Association (NLA) has responded to the Government’s response to the Rugg Review. The Government’s response set out their proposals for the reform of the private-rented sector in England. This long waited response is not the Green Paper which the industry was initially promised and it is unclear when these proposals might realistically reach Parliament. However, it does mark the continuation of the wide-ranging debate about what changes are actually needed to improve and grow the sector.

What’s in the response?

The Government’s response addresses proposals in last year’s Rugg Review and the 2006 and 2008 reports by the Law Commission on rented accommodation. These reports were broad and covered numerous issues affecting the sector. However the Government’s main proposals are:

A National Register of private landlords –

The biggest issue for the sector will be the Government’s proposal for a web-based and telephone register run by an independent organisation which will cover all landlords. Whilst the Government has said it is not suggesting that landlords would have to meet any pre-set criteria in order to register, landlords will need to be registered in order to let property. The Government has also proposed that landlords would have to submit the addresses of their property holdings each time they register and the Government believes that there should be sanctions for the worst offending landlords.

We have argued that this current proposal is “well meaning but flawed”. The NLA can see some merit in Dr Rugg’s proposal for a light-touch, no-hurdle license which would help drive out rogue landlords and enable tenants to have confidence that they were renting from a professional landlord. However, the Government’s initial proposals seem to go beyond the spirit of Dr Rugg’s proposal.

The NLA is adamant that any proposed system should seek to steer well clear of being overly-complex and ineffective, in the same way that many see the current HMO licensing schemes. It is important that Westminster learns that lessons of the Scottish landlord registration scheme which has currently not achieved its objectives.

The regulation of letting agents –

The Government has accepted the recommendations of the Law Commission and Dr Rugg that there should be mandatory regulation of lettings agents. It has said that regulation should be carried out by an independent body and should be compulsory.

We have supported the principle of landlords being protected from unscrupulous agents and welcome a firm commitment to tackle this issue.

Written tenancy agreements –

The Government is also taking up the Law Commission’s proposal for all tenancy agreements to be in written form. It is not yet clear which option the Government prefers: either minimum requirements for a valid tenancy agreement enshrined in law; or a model tenancy agreement in legislation with the option for other additional clauses.

The NLA has always been in favour of landlords working on the basis of a written tenancy agreement. A written tenancy agreement enables both the landlords and tenant to see and know what is expected of both parties and to formally recognise their relationship during the tenancy. That is why the NLA launched a standard online AST for members. However, trying to institute an actual model tenancy agreement in legislation would be cumbersome. The Government will need to carefully consider the practical implications of proceeding in that direction.

Other proposals include:

Increasing the threshold for access to Assured Shorthold Tenancies (AST) and the associated legislative framework from £25,000 to £100,000 of aggregated annual rent.

Encouragement of institutional investment in the sector by creating opportunities to invest on a large scale and for the long term. This would include the introduction of a long-term funding model for new private rented housing in England.

Development of a more sophisticated and disaggregated understanding of the sector in terms of improving the evidence base upon which decisions are made.

Staff in voluntary organisations – Shelter, CAB etc. – should attend training in private rented sector housing management.

Encouragement to landlord organisations to make support and training services more widely available to enable better understanding of what is involved in "truly professional private rented sector housing management."

Local authorities should be actively encouraged to explore ways in which to improve their engagement with private landlords in their areas.

Making accreditation available to all landlords wherever they operate. Consideration should also be given to whether a national accreditation scheme should be established.

Increasing protection for tenants whose landlord defaults on a mortgage.

What we will be doing?

The publication of the Government’s response marks the start of a consultation period for these proposals. Given the extent and breadth of the Government proposals we will be looking to be at the heart of the debate, ensuring that the interests of our members are safeguarded and that any proposals benefit the wider private-rented sector.
We will be:

Actively participating in the Task and Finish Groups established by Communities and Local Government which are designed to inform decision-makers on the proposals for the national register of landlords and the regulation of letting agents;
Continuing discussions with Communities and Local Government to make certain that landlords views are taken fully into account; and
Pushing for the focus of any programme of reform to be consistent with growing the professional letting industry and nurturing a proper culture of renting in the UK.

We will also ensure members are kept informed and up to date with developments.

The Rugg Review report
Published 23 Oct 2008

NLA News releases:
• Review marks major watershed in attitudes to PRS: renting is not second best

Downloads
• NLA submission to the review [150kB PDF file]
• Rugg Review – executive summary [590k PDF file]
• Rugg Review – full report [4.4Mb PDF file]

See also:
• DCLG News release: Creating a less risky rental market for Landlords and Tenants
• Centre for Housing Policy (Univerity of York) website

Dr Rugg at NLA National Conference
Dr Julie Rugg discussed key recommendations made to government following her wide-ranging review of the sector. More about the Rugg Review can be found in the November 2008 UK Landlord.