In his recent article, Julian Huppert MP declared that “landlords should have to compete on quality not just on price.” The Residential Landlords Association agrees. The question is how to achieve this.
Many councils have chosen some form of licensing to identify the ‘rogues’ who over-crowd homes and rent sub-standard properties.
The problem with licensing schemes is they identify the good landlords who sign up but fail to find the crooks. Even Newham, the most pro-active borough in this respect, has failed to reach the hardcore of 20% of rogue landlords after a year’s intensive enforcement.
A new approach is needed so that the compliant majority can self-regulate through an independent sector body freeing local authorities to concentrate all their resources on identifying and checking on those who do not sign up.
Co-regulation would mean the compliant majority can be supported by a clear brand identity and trusted by tenants. Such a scheme would not be a soft option. It would include Alternative Dispute Resolution (ADR) and independent property inspections with strong sanctions against those landlords failing to abide by their obligations to be accredited under the scheme.
Councils can then target the non-compliant, the naive and the ignorant minority causing the problems. The question still arises about how are they found.
Troubled tenants are often reluctant to approach councils directly for fear of retaliatory eviction. We believe that council tax returns should be amended to include details of the tenure, owner occupied or tenanted? If tenanted, the tenant can then be asked on the form to provide details of the landlord which will complete the council’s records simply and without prejudicing the tenant’s position.
The absence of a landlord’s details should arouse suspicion. It is an offence for a landlord not to provide them to their tenants and by cross checking with Land Registry records the suspect landlord can be identified. This solution would be far cheaper than the £300m cost estimated for a landlord register under the previous Labour government.
In his article Mr Huppert calls also for the creation of new longer, family friendly tenancies. The reality is that this is already happening within the existing system.
English Housing Survey figures show that the average length of residences in the private rented sector is now already 3.8 years. What is more, such is the willingness of landlords to keep good, rent paying tenants on in their properties that those who stay on long term are enjoying discounted rents. As the English Housing Survey reports, tenants who had lived in their current home for less than a year paid an average weekly rent of £175 compared with £154 for those resident for 5-9 years and £106 for those resident for 20 or more years.
The RLA believes that rather than reaching for new legislation, the current Assured Shorthold Tenancy regime should remain, but with a right for the tenant to renew their contract at the end of the contractual period. Where a dispute arose over a renewal, it could then be dealt with using dispute resolution
We call on the Government to look seriously at our suggestions to properly root out the criminals who reap misery for tenants.
* Alan Ward is Chairman of the Residential Landlords Association. It tweets @RLA_News. Its manifesto for the private rented sector is available on its website.
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7 Comments
Alan, I agree with the first part of your article on self-regulation. But I think in the second part you may be confusing the length of time a tenant is in a property with the length of their tenancies during this period. So for example I might have a succession of one-year tenancies meaning I stay in the same property for six or seven years, but at any stage during that process I have at most the certainty that I will still be there another eleven months….. Similarly you cite figures suggeting tenants who have been in situ a long time pay less in rent on average. That probably is the case, due to landlords leaving the rent the same when they renew the tenancy, but is there any evidence linking lower rents to longer actual tenancies (not residency)?
I am not being deliberately awkward – through somewhat odd circumstances I am both a landlord and a tenant and am interested in how the whole system can be made to work better for everyone.
Mark – the tenancy duration and value question depends on whether the tenant is in London or the regions and if the tenant has used an agent or taken the tenancy direct with a landlord. So many variations.
The London market must not be used to dictate policy elsewhere.
Although agents have an incentive to churn tenancies, and hence earn fees, this is not universal and many will allow tenancies to become periodic rather than risk raising the rent, or charging the tenant administrative renewal fees causing the tenant to seek alternative property. A void is expensive for all concerned.
Market stats are wide ranging. the English Housing Survey generally quote VOA, Valuations Office Agency or ONS, and are conservative but soundly based, while the media tend to quote commercial agents who have an incentive to attract landlords and extrapolate their inflated rental data across the rest of the country.
Good words – better than most from RLA, but dispute resolution does not quite cut it for security of tenure.
Landlord says he is selling, the tenant has to go – this could be a family tenant who correctly asked that various problems were fixed (cost the landlord money); the case goes to dispute resolution and the landlord wins – surely it is reasonable that if he is selling he has the chance to maximise sale price by giving best first impression – no clutter, no mess… standard advice to sellers. Fair enough. A month later landlord takes house off the market – it is not selling / he has changed his mind… he starts renting it out again. Cost to landlord? 1 months rent. Cost to family tenant? Stress during ADR, stress in moving, costs of moving, stress in finding new schools, etc. and, maybe the landlord lied: he had no real intention of selling, just wanted that tenant out. His loss of rental income? Possibly tax deductible – or by earning 1 month less he pays less tax … he does not lose except for the administrative effort of form filling and attending to ADR which his apparent situation will win. Average tenancy includes all those tenancies where, currently, people do not complain about dilapidations for fear of landlord ending tenancy: they need security and will compromise a very great deal of comfort, fuel poverty and unhealthy conditions so that their children have continuity for schooling, transport, etc.
I like your Council tax landlord/tenanted notification idea – simple and makes sense. But also think that registration of HMOs (in modern terms, properties with 3 unrelated people living their) is daft: simply register ALL tenanted properties – inspect at random, and require a list of basic standards be met, with penalties if failed, incrementally increase those standards year on year. Also, councils to check that all registered (tenanted) properties have indeed got EPC, gas safety cert, and so on. Further, share the tenanted property list with HMRC in relation to capital gains tax residency requirements for owner/landlord, who is clearly absent during tenancy period.
Finally, I cannot understand why councils and regulations are determining minimum bedroom size – any room with a window for ventilation and space for good access to a bed, a chair, a small table … is big enough assuming that there are shared living space: kitchen, bathroom, living room… some people on minimum wage will happily pay less (even struggle to do so) for a smaller sleeping space – it is a compromise that makes sense; why are we precluding these choices? I even hear councils making judgements about minimum numbers of kitchen cupboards… daft nonsense; start with wind and weather tight, then gas/electric safety, then insulation/draught-proofing to limit fuel poverty…
Councils’ lack of success on this score may or may not be connected to the awful cuts you’ve hit them with. Doubtless old Huppert who pops up to do the “Look at this progressive thing!” doesn’t think it’s anything to do with him.
LAs already know their area and have (had?) people working on housing. It makes much more sense for it to be done there, accountably, than by a self-regulating body. It;s reasonable too that general taxation pay for it not good landlords.
Alistair – your reasoning is surely false? Why would ADR find in favour of the landlord if the tenant “correctly asked that various problems were fixed” ? And if there are building problems the landlord will have to fix them before a sale. But the further false premise of your argument is that the old tenant goes and the next walks in. Not in the real world outside London.
No landlord wants a void period. With normal mortgage repayment ratios at 125% – £625 rent means the landlord’s mortgage repayments will leave just £125. Take off another 10% for the agent and there’s just £62.50 left . It isn’t all profit. And if the agent has to market the property there’s typically another month’s rent gone. Remember Mr Micawber? Result misery.
Prof Michael Ball of Reading, has calculated that landlords’ typical net returns are less than 1%.
If a landlord has a tenant paying the rent, and behaving responsibly, it makes sense to keep the tenant in-situ. And for another EHS stat only nine percent of tenancies are ended by landlords.
Regarding room sizes – these are vital tools to prevent overcrowding using the Housing Health and Safety Rating System, HHSRS, from the 2004 Housing Act and the provisions of the1985 Housing Act. Unfortunately what is a good landlord’s bijou living space is a criminal landlord’s opportunity to pile them in. We can’t have it both ways and it is vital that councils have the resources to investigate and enforce against the crooks.
Thanks for responding Alan
If thats the case why have my children been forced to do the 6 monthly shuffle for the last 10 years or so?