In 2006 the rental market saw the implementation of a raft of new legislation that kept landlords very busy learning new procedures in what the Association of Residential Letting Agents is calling the ‘class of 2006’.

However, 2007 looks set to be legislation-free, apart from the implementation of mandatory tenancy deposit protection, and landlords and tenants can look forward to continued growth in both the supply and demand for good quality rental property.

Only ‘Function Creep’, the process where national and local government find new ways of widening the imposition of existing legislation and regulation, can dampen the current optimism in the private rented sector.

“If a landlord has worked through the class of 2006 in HMOs, EDMOs, HHSRSs and DDAs, he should look forward to enjoying 2007," forecasts Adrian Turner, chief executive of ARLA.

However some change in the market may be expected. Last summer, as soon as the grace period elapsed for landlords of HMOs, Houses in Multiple Occupation, significant numbers left the sector. Should this trend continue, next year could prove difficult for tenants on low incomes.

EDMOs, Empty Dwelling Management Orders, were widely misunderstood by the public and the press after a classic example of function creep by a local authority.

However, after a misguided attempt to attach an EDMO to a property under probate, it became understood that EDMOs are designed to retrieve empty or derelict property to help lessen housing shortages.

HHSRs, Housing, Health and Safety Ratings have arrived without disruption. They were introduced to ensure that all housing leaves the nineteenth century and enters the 21st century as homes fit for habitation by the standards of 2007.

2006 was rounded off with the arrival of the DDA, the Disability Discrimination Act... This has also arrived without causing disruption, undue cost or upheaval. The rumours were untrue and landlords will not have to alter physical features in their properties, like widening front doors or installing chairlifts when it would be obviously uneconomic to do it.

Professional bodies serving the private rented sector will continue to spend a considerable amount of time pleading with government to licence all lettings agents as the surest way of abolishing the cowboys and the rogues.

"Although ARLA membership soared during 2006 and is set to continue growing next year, we cannot regulate the whole market. We need government help with this one," commented Adrian Turner.

In 2007, landlords will still have some learning to do. All recent surveys show that they have yet to absorb the requirements of mandatory deposit protection. However, they have until next April to decide whether to comply through insured schemes or to use the custodial scheme, where deposits have to be banked with a government appointed agency.

With the implementation of all the parts of the Housing Act 2004 that cover the rental market, both landlords and tenants should look forward to continued and steady growth in rental housing. ARLA research predicts an average growth in tenancies of 20-30,000 a year for the next ten years.

For tenants in 2007, buy-to-let will continue to increase the range and improve the standard of housing available, while young households will not be forced into owner occupation at a financially precarious time of life.

Adrian Turner believes 2007 augers well for landlords, tenants and letting agents within the self-regulated sector. "We have got the framework of ethical standards, consumer safeguards and good quality property," he said.

However, he warned that only vigilance and strong lobbying will contain the progress of function creep in government. "We have to be very aware that only a strong, competitive market will keep standards improving. And we must be very aware that these positive market forces can be quickly destroyed by over legislation and by over-zealous, empire-building administrations at all levels of government: local, regional and national," he added.