Julian Huppert writes: Improving the private rented sector

Terraced housingThere are 9 million people in the private rented sector in the UK. Many of them get a rough deal from landlords who push the rules, and letting agents out to exploit them.

Letting agencies have been allowed to charge exorbitant fees to do the simplest, cheapest administrative tasks – sending an email, posting a letter or changing a name on the tenancy. According to Shelter, 1 in 7 people who use letting agents spend £500 on fees, that’s on top of rent and deposits!

Last Wednesday, I presented a Bill to tackle these problems. My proposals would end these excessive fees, and extend the rules controlling estate agents to letting agents as well. I also want to make it easier for people to choose good landlords. In my constituency the Lib Dem led City Council’s property and landlord accreditation scheme has been a huge success, giving tenants’ assurances that they’re getting a good deal and generally driving up the quality of properties with rogue landlords being driven out of the market. It’s also helped us improve the standards of safety and sustainability. I believe that similar schemes should be operated across the UK. Landlords should have to compete on quality not just on price.

I also proposed that the Housing Ombudsman cover the entirety of the private rental sector – not just the good landlords who choose to sign up. Tenants must have proper recourse when things go wrong, at the moment the power lies too heavily in the hands of the landlords and the market who takes advantage of the fact that home ownership is becoming increasingly difficult.

When we think of renters we usually conjure up images of students house-sharing or young professionals starting out in the working world, but a third of the 9 million people renting are families. The current system doesn’t accommodate their needs. Whilst 6-month or yearly contracts suit some for others they don’t and contracts should be flexible enough to reflect this. Families should feel secure enough to put down roots and make the house their home. And landlords can benefit from the normalisation of longer term contracts – after all stable rents and solid landlord-tenant relationships are surely a thing of dreams for landlords too!

We should be striving for a fairer and more stable private rented sector and I hope my Bill will be the first step in achieving this.

* Julian Huppert was the Liberal Democrat MP for Cambridge from 2010-15

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10 Comments

  • The rental sector is a cut-throat business in this country, both for tenants who have little protection against bad landlords and for landlords who have little protection against bad tenants – this latter point always gets overlooked because of the perception that landlords are raking it in are always the ones at fault. Anyway, it’s good to see someone doing something positive in this area, especially with so many families now prone to being kicked out at short notice because of Thatcher’s Assured Shorthold Tenancies. Security of tenure desperately needs addressing with much longer notice periods. ASTs play to the speculative landlord market as the tenants can be kicked out at short notice and the house sold quickly.

    I’ve been on both sides of the renter/landlord equation and have experienced bad tenants that have done a huge amount of damage well beyond the size of the deposit after the useless letting agents failed to carry out proper inspections and failed to negotiate fairly on the amount of the deposit to be retained. Letting agents are a huge problem as there simply isn’t enough money to be made from letting a house for the two parties (agent and landlord) to make a return on the investment. Capital returns outside of London and a few select areas are non-existent – house prices in my street are lower than they were 10 years ago – so the only return on investment is the rental yield which is historically very low and gets split between the agent and landlord. The only way for the agent to make money is to provide a threadbare service and hide the costs from the landlord – hence why the tenant gets asked to stump up most of the fees, although in reality it is the landlord that indirectly pays as they then can’t charge as much rent. I fear that removing lots of the fees will push up rents, with the agents increasing the percentage they take from the rents to make up for lost revenue, but at least the whole process will be more transparent.

  • The rental market in Camrbridge consists of tens of thousands of properties. The scheme you mention has under 500 accredited properties, according to its own website. It’s hard to believe that this would drive anyone out of the market.

  • Eddie Sammon 18th Mar '14 - 1:40pm

    I’m not comfortable with tampering with sole traders and SMEs too much. It is not as though landlords and letting agents are the rich and powerful operating in an oligopoly or monopoly. I recommend caution.

  • Eddie Sammon 18th Mar ’14 – 1:40pm
    “…………….It is not as though landlords and letting agents are the rich and powerful operating …….”

    Eddie, you will I hope admit that whilst it every landlord is “rich and powerful” there are some who most definitely are.

    Prince Chares for example – a landlord for a lot of people – would you describe him as “poor and powerless” ?
    Or will you have to wait for The Guardian’s court case to reveal the content of his spidery letters before you comment ?

  • apologies — the screen keyboard is having a bad day– or I am! That should have read —-
    Eddie Sammon 18th Mar ’14 – 1:40pm
    “…………….It is not as though landlords and letting agents are the rich and powerful operating …….”

    Eddie, you will I hope admit that whilst NOTevery landlord is “rich and powerful” there are some who most definitely are?

    Prince Charles for example – a landlord for a lot of people – would you describe him as “poor and powerless” ?
    Or will you have to wait for The Guardian’s court case to reveal the content of his spidery letters before you comment ?

  • Eddie Sammon 18th Mar '14 - 3:24pm

    Yes John I agree totally that some landlords and letting agents are rich and powerful and we should tackle them. I also agree that we should get rid of rogue landlords. However, I just err caution – we are getting into a situation where the lines between public and private ownership are being blurred – no need to nationalise the utility companies, because you can control their prices anyway!

  • Little Jackie Paper 18th Mar '14 - 7:18pm

    ‘The current system doesn’t accommodate their needs. Whilst 6-month or yearly contracts suit some for others they don’t and contracts should be flexible enough to reflect this. ‘

    Six month deals are wonderful for no one but landlords. By and large this is going to be very difficult to do anything about. Where there is a mortgage involved banks will ordinarily insist on short-term lets only so that in the event that the landlord defaults the property can be taken over easily. Given that we are recovering from a massive balance sheet recession, banks are unlikely to change tack here. Where there isn’t a mortgage involved things are different, but the idea of benevolent landlords helping families put down roots is just really naïve. One assumes Dr Huppert will never be reliant on a shorthold tenancy.

    Ultimately the privatisation of housing has been a 30 year catastrophe. What sort of, ‘market,’ gets billions in Landlord Subsidy/housing benefit and still sees spiralling prices and rents? Is there any evidence of landlords competing on price and quality for anyone but the very top end of the market? The housing market is nothing but a direct transfer of wealth from the young workers to the propertied who generally are at a huge generational advantage. The only way that this will ever change is through measures that make squeal all those voters who have done very nicely out of an economy where ever more returns accrue to capital and not labour. In many ways BTL is emblematic of almost everything wrong with this country – we simply have a load of houseprice inflation and financial engineering in the big black hole where we should have a productive economy.

    Indeed, it is one of the great oddities of Thatcherite economic policy. The general belief was that inflation was the great evil, just not house price inflation.

    And this is before we get to the small mattera of building and BANANA planning objections, and foreign ownership of residential housing stock.

  • Chris Randall 19th Mar '14 - 9:49am

    The real answer to the bad landlords is a viable strong social housing sector which has disappeared over the last 30 odd years along with almost all the tenants rights.

  • I agree with Chris Randall, I don’t understand why politicians haven’t come up with a sustainable social housing model. Everything else is a temporary fix. I’d like to see a limit on the number of homes a single person can own too. We live on an island and space is a limited resource, we need to think these things through and come up with solutions that benefit normal working people.

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