Assetz® News - Rugg report may lead to rewards for better landlords

Rugg report may lead to rewards for better landlords

24th October 2008 |

Many investors in buy-to-let will enjoy the boost of an industry that has a better reputation as a housing provider, one with a strong reputation for quality and sound regulation. Specific rewards for those who show themselves to be good landlords could be better still.

If all this sounds like a dream, it is no longer. Such are the proposals of the Rugg report, authored by Julie Rugg of the University of York. The report states that the private rental sector should not be considered the "third" best choice for accommodation and the best approach to take towards the industry is to recognise its value - specifically for large groups such as students and young professionals - and encourage its expansion while raising quality standards.

Having a good reputation counts, so tenancy and landlord protection are important areas covered in the recommendations, with mandatory regulation for letting agencies and streamlined grievance procedures to prevent protracted disputes being two new measures that could protect the interests of landlords and tenants alike.

Moreover, the expansion of the industry could be linked directly to rewards for the best landlords. The report advocated tax incentives in areas such as stamp duty to help the best investors add to their portfolios. Thus being a good landlord will not only be an important part of the role of an investor, but the key to future success.

Housing minister Margaret Beckett declared herself impressed with the report, describing it as "comprehensive and authoritative". She also said: "The private rented sector plays a really important role in the housing market. Many of us have rented a house at some stage of our lives and it's crucial that we have a high quality sector that works well for both landlords and tenants, and encourages mobility."

How this may translate into legislation is not clear yet, of course, but the Royal Institution of Chartered Surveyors made it clear that it expects the government to act, stating: "We trust that the government will follow this lead and take an open minded approach to engagement with the sector, seeing those involved as genuinely interested collaborators rather than vested interests. Without effective engagement of this kind, the report will be a lost opportunity."

The Centre for Cities was keen to see action too, with director Dermot Finch arguing that the advocacy of more rental accommodation will be important for "fast growing" cities such as Bristol and Cambridge, which "urgently need more high quality private-rented housing to support their labour markets". He advocated adjusting the government target for housebuilding and factoring in more rental homes, suggesting that the extra worker mobility afforded by such housing is critical in hard economic times.

So while the extent to which the report's proposals are transformed into reality remains to be seen, it may just be that the recognition of buy-to-let as a good thing is growing, something that in turn could help the industry to grow in the years ahead.