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Red tape register

Speculation is mounting that the Government will adopt proposals for private landlords to be licensed when it responds to the Rugg review in the next fortnight.

In the original paper published last October, Julie Rugg and co-author David Rhodes from the Centre for Housing Policy at York University, pot forward introducing a light-touch licensing system for landlords and mandatory regulation for letting agencies.

It has been suggested that landlords could have to pay around £50 to register with a national body and comply with letting standards. If they fail, they could get struck off or have points against their licence.

Buy-to-let brokers and lenders are concerned over how the plans could affec the already struggling sector.

The Mortgage Broker Limited and Buy to Let Centre managing director Darren Pescod says the prospect of a register is ridiculous and just another piece of red tape.

He says: “This will potentially drive out new first-time landlords. If would-be landlords are looking at the rates and fees involved just for setting up a mortgage, and then see there is more paperwork because of having to join a register, it will put them off.

“I cannot see how they are going to monitor this and how they are going to enforce it. I can only see, based on history, that this is another cost for the landlords and costs are just going up and up.”

The measures are aimed at ridding the sector of rogue landlords but Pescod says such people would not be deterred.

He says: “If you want to be a dodgy landlord, then paying a £50 fee to go on a register is not going to stop you.”

But Nationwide Specialist Lending managing director Larry Banda says licensing landlords could boost confidence in the sector.

He says: “I do not think any good landlord will be put off by being on a register. Anything that gives confidence to tenants about the strength and stability of the private rented sector would be welcome, provided it is not done in an overly bureaucratic and unnecessarily restrictive way.”

Mortgages for Business managing director David Whittaker says residential landlords are already governed by more statutes than virtually any other business and he is concerned over how the register will work alongside existing measures.

He says: “Will it be encouraging people to go and join a recognised body with some monitoring or will they be obliged to do so? The jury is still out on that.”

Whittaker says the industry should make sure existing bodies, such as the National Landlords Association and Residential Landlords Association, work effectively before creating a new one.

Whittaker and Banda both warn that the Government’s response to the review should be careful not to damage the private rental sector’s role in meeting demand for affordable housing.

Whittaker says: “Given that the Government does not seem to have a cohesive social housing plan, it cannot afford to upset the one sector that is going to plug the gap for them.”

Banda says: “Because it is so hard for first-time buyers at the moment we need a strong rental sector supported by landlords doing the right thing by their tenants.”

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