Housing Minister says Fees Ban Consultation will inform detail of Policy

White Paper release holds Minister back, but Gavin Barwell lays out his general agenda for the Private Rented Sector.

Housing Minister says Fees Ban Consultation will inform detail of Policy

On 12 January 2016 the Housing Minister Gavin Barwell made an appearance in front of the All Party Parliamentary Group (APPG) for the Private Rented Sector and said the consultation is to inform the detail of the policy and how it would work.

The session began with Barwell laying out his general agenda for the Private Rented Sector going forward, but warned that he was restricted in what he could say due to the upcoming release of the Housing White Paper. He said that, in his view, the UK is not building enough homes and he sees the private rented sector as part of that solution.

A large focus of the Minister’s opening remarks were around the Government’s Build to Rent agenda. He said it is intended to increase further institutional investment and will feature heavily in the White Paper. He continued that institutional investment is good for the sector because it brings longer tenancies, better value for money and is a provider of income security.

After his opening remarks the Minister then took questions from MPs. The MP for Dulwich and West Norwood, Helen Hayes welcomed the Government’s move to ban letting agent’s fees because cost was one of the three challenges facing the private rented sector in her constituency. The Minister agreed with the issue about cost and noted the main reason for costs going up was a lack of supply of homes to rent and rents going up by more than wages.

James Gray MP raised concerns on behalf of his constituents about recent changes to mortgage interest relief and stamp duty, which he said meant many landlords would not be making any money at all from their property and lead them to leave the sector. In response, Mr Barwell said the implications need to be considered, but HMRC’s analysis was that just one in five landlords would be affected by the mortgage interest changes.

He also said that it is clear that both the quality and satisfaction of the homes themselves, and the renting sector, is improving. However he stated that there are still problems such as affordability, as housing costs are starting to outstrip incomes.

Baroness Grender said that the private rented sector could help meet housing needs in an environment where not enough houses are being built but that it involved the need for changes in tenure and to make it more secure beyond build to rent. The Minister said the Government wanted to make as quick progress as it can on letting agent fees and will be asking officials to analyse data on average tenancy lengths and the number of section 21 evictions.

Responding to questions from Sarah Daly from Sustainable Homes and Clive Betts MP on the issue of rogue landlords Mr Barwell said he was not in favour of mandatory registration, but rather supported looking at the data where such individuals operate and hitting them directly. He also said that local authorities can decide if they wish to publicise banning orders where they are made.   

Commenting after the APPG meeting, ARLA Managing Director David Cox, said:

“It’s clear that the Housing Minister is set on large scale changes to private renting in England, but what’s important is that the Government listen to the sector and follow the evidence.   

“Since 1980s, England has been building up to 40% fewer homes than the 240,000 needed annually. The resulting shortage of about two million homes has left the country with soaring prices and a growing gulf between the property haves and have-nots.

“Unfortunately, the Government doesn’t seem to realise that punishing hard-working letting agents who deliver a hugely valuable service will not in the long run improve the affordability of the sector and the service that tenant’s receive.”

“ARLA and its members will be engaging fully with the Government’s consultation. It’s vitally important for the future of the sector that service levels remain high and tenants get value for money.”   

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