Alternative to licensing/accreditation?  Bad landlords, look away now!

by Kirsty McGregor

13:59 PM, 11th September 2013
About 6 years ago

Alternative to licensing/accreditation? Bad landlords, look away now!

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Alternative to licensing/accreditation?  Bad landlords, look away now!

Following on from the discussion entitled “Raising Standards or Raising Funds” it appears that the majority of readers agree that additional and selective licensing and property based accreditation schemes run by local authorities are not necessarily the best route forward. However, there does need to be a simple way of differentiating better quality landlords/properties for tenants in my opinion.

If the sector can self-regulate as much as possible, it would be certainly better than any government intervention.

So what about a simple graded quality rating for rental properties?

Much like the star rating system in hotels, it would be an idea that tenants would easily understand.

When it became an industry standard, rental prices would reflect the rating of the property.

What do you think should be included in such a star rating though?

Comment s/thoughts welcome from both landlords, tenants and letting agents.

Regards

Kirsty 5 star rated buy to let properties



Comments

Paul Shears

19:47 PM, 11th September 2013
About 6 years ago

I would normally be against such a thing the creates yet more red tape.
Personally I rely on reputation alone and it works for me.
However, having seen so much poor quality rental property over the years, the ability for the prospective tenant to narrow the search more efficiently might also raise standards. So I think it's an excellent idea.

Kirsty McGregor

21:44 PM, 11th September 2013
About 6 years ago

Thanks for that Paul, brilliant that you can rely on your reputation. Probably not as easy for new landlords or those with only 1 or 2 properties though. It's only red tape if it's mandatory. What I'm proposing is totally optional. So glad you think it's an excellent idea!

Mark Alexander

7:59 AM, 12th September 2013
About 6 years ago

Presumably there would have to be different classifications? For example, a 5 star B&B in Great Yarmouth is very different to a 5 star hotel on Park Lane or a 5 star holiday park in Torquay.

Classifications might include:-

Flats
Houses & Bungalows
HMO's (e.g. shared houses, bedsits etc.)
Student accommodation
Furnished and unfurnished.

Condition of carpets and decor would need to be taken into consideration of course, as would kitchens and bathrooms. Rating furniture and fitting on age wouldn't necessarily work as fine antique furniture might get rated badly. Wouldn't it all be rather subjective?

If buildings scored points for things like a lift, flats would have an advantage over a bungalow which would never have a lift.

Presumably double glazing would score points, same for properties fitted with burglar alarms, envirovent units etc.

Would secure/gated parking score more than a property with a garage? There are plenty of considerations to parking. If on road parking scored points my house wouldn't get any, however, I have two garages and parking for 200 cars on my own land which is secured by electric gates.

In principle I think it's a good idea (subject to cost) and could be a great differentiator. As always though, the devil is in the detail.

Out of the two options, if I was a tenant I would prefer to know that I am dealing with an landlord who is accredited through a scheme such an NLA. However, how many tenants even know that such an accreditation exists, let alone what it actually means? I can see a property with my own eyes but it is much harder to know whether a landlord knows what he/she is doing.

If star ratings do get traction, it will only be a matter of time before all landlords realise they need to get their properties rated as those that are rated will have a clear advantage in their marketing as soon as tenants become aware of the existence of a rating scheme. A lot will also depend on whether the property portals will get behind the concept and create a new upload field or whether mention of star ratings will just have to be added to the property description.

Have you considered the following? What's to stop a landlord rating all of his own properties as 5 star and adding that into his adverts? For extra credibility landlords could form clubs and all rate their own properties. How would a tenant know how much weight one rating carried over another? For example, any landlord could create the Midlands Rental Standards Rating Unit (MRSRU) tomorrow and rate all members properties as 5 star rated for a fiver each without even having seen them. Members could then put such a rating into their advertising and that would make a mockery of any well considered scheme. Ideally a kitemark for the rating body is required, e.g. ISO 9001. This wouldn't stop what I've said above but it would add further credibility to the official body and they would be far more likely to get free PR on the back of a recognised kitemark..

I hope that helps and I look forward to reading other people views, especially on what the classifications ought to be and on the aspects of the property which should be scored to determine an overall star rating.

In conclusion, if it was set up right I would probably become an early adopter but 25 years in this business has made me a cynic and I would require quite a bit of convincing, especially in regards to the detail and credibility behind the rating system.

Kirsty McGregor

9:46 AM, 12th September 2013
About 6 years ago

Phew Mark ...where do I start to answer that? Brilliant comments!
Okay...firstly we will remove any questions that aren't relevant, for example lifts in a bungalow wouldn't be answered & the rating for the bungalow wouldn't be adversely affected (nice example thanks I'll use that! :-))

But other than that, there'll be no differentiation between types of properties - eg B&Bs and hotels have different classification. We wouldn't differentiate between a HMO, student let, house or flat....why would we? They are all rental properties and just buildings after all.

Condition of interior is slightly subjective, and is probably the only thing in the rating that is. But it's about condition, not about age. If the fitted kitchen has gashes in the worktops for example, it would be marked down.

As for the rest of the furniture & things that aren't fitted units - eg sofa/chairs etc - the jury was out for a while about whether we'd treat furnished & unfurnished differently. Should you rate the quality of the sofa for example? But in the end, we decided we'd include it as part of the general view of the quality/condition of the interior. So we aren't going to inspect individual pieces of furniture. But if a landlord keeps scruffy furniture in the place, it tends to mean that other aspects (eg walls/flooring etc) are also below par. And this will be reflected in the score as condition of interior walls and flooring will be scored.

Yes -- double glazing generally scores higher (but not much higher as long as the glazing is in good condition, for example DG in a listed property may not be possible. Yes - burglar alarms score higher (even higher if they are annually serviced) & envirovent etc.

Would secure/gated parking score more than a property with a garage? - yes
With parking we would rate according to the highest/best facility available. So in your case, you wouldn't get downgraded because you didn't have on-street parking, when clearly your parking/land is far superior.

Absolutely re landlord accreditation - in time ideally we'll combine the two.
There's loads of landlord accreditation schemes - there's a debate about how useful they are in increasing standards when, as you say, tenants don't generally understand them across the market. They work very well in some pockets of the country. And not well at all in others. So what commercial benefit does a landlord get if he is accredited? Compared to the bad landlords who don't bother. Some tenants are very savvy & well educated. Others aren't. And we definitely need to help them differentiate the landlords. The market is muddled and there's no clear message. We want to start something completely different, but with the same aim of increasing standards and benefiting good landlords. So because there's so little focus on the properties themselves, we wanted to bring that in.

"If star ratings do get traction, it will only be a matter of time before all landlords realise they need to get their properties rated as those that are rated will have a clear advantage in their marketing as soon as tenants become aware of the existence of a rating scheme. " - Hope so!
"A lot will also depend on whether the property portals will get behind the concept and create a new upload field or whether mention of star ratings will just have to be added to the property description." - we are working very hard on that. When we get traction we have already been told from the major 2 portals that we will have their support. At which point, our prices will go up because there'll be much wider (national) commercial benefits. Initially, it will be down to the local landlords/agents/associations to promote locally - which will also work.
Agreed, we've already applied to register the trademark - it's with IPO at the moment.
Agreed, we are in the process of getting ISO 9001.
On our site there will be a page to check all properties listed and it will be our job to audit the market - a combination of clever technology, getting the message out to the tenant market about how to check it's a valid rating, and a lot of hard work!

Well as you can tell, we are a long way down the line to doing exactly this. So I look forward to hearing other landlords/agents thoughts. We've built the rating system based on feedback we've had so far, and although we are about to launch, we still have a little time to amend the content. I want to make sure it's something that landlords value and believe in. And I have the content of the rating programme open in front of me, to add any brilliant ideas that are suggested here and now. So keep them coming, all comments welcome & this will help create the final product.

So t.Thanks for your comments Mark & I hoped you'd be an 'early adopter'. We look forward to giving some of your properties a rating in the near future!

Steven Burnell

23:16 PM, 12th September 2013
About 6 years ago

I think the theory & the practice are too difficult to reconcile for the above proposal to be viable, As per Mark's comments (echo my own off-the-cuff thoughts), it sounds too complicated to be practical if it is to be independent & credible & not to be abused or too costly.
An alternative theory:
If I offer good flats / houses at fair rents & if I get this offer to the market effectively either directly or via an agent then I would hope to rent them without too much difficulty in the current market, especially if the tenant believes I will be a good (but not soft) landlord?
But if the rental market dips, then buying market must have picked up so good opportunity to realise assets at capital profit & reduce rental supply so good property @ fair rent from reputable landlords will still let to remaining demand from good tenants?

Kirsty McGregor

23:26 PM, 12th September 2013
About 6 years ago

Reply to the comment left by "Steven Burnell" at "12/09/2013 - 23:16":

Hi Steven
Give us a chance! We can make it work practically - it's not just a theory.
Out of interest, what price would you say was viable for, say a 2 year rating?

But agreed, in areas where there's no voids and rental market is strong, it may not be worth it to a landlord in the early days (however as the brand gets more recognition, not having a rating could be detrimental - much as with the hotel industry, no star rating says a thousand words!). So...what if your "competitor" landlord did it? And you didn't? As long as the tenant education is there, it won't take much for the message to spread and a tipping point to be reached - even if that only happens in local pockets around the country.

Gina Blomefield

8:53 AM, 13th September 2013
About 6 years ago

Looking from a different perspective tenants with small budgets might be rather depressed that they could only search for properties with the least stars and what good landlord would want to have a property on the lowest ratings? I am all for increasing the recognition of the landlord accreditation schemes and encouraging more landlords to qualify.

Mark Alexander

9:07 AM, 13th September 2013
About 6 years ago

Reply to the comment left by "Gina Blomefield" at "13/09/2013 - 08:53":

Hi Gina

Could the same be said for holiday makers and hoteliers though? It seems to work in that market so why not ours?

I'm sure that 5 star bedsits exist, in fact, I know a former chairman of Norwich City football club used to let the most amazing student rooms to weathly foreign students (mainly Chinese I seem to recall) attending UEA in Norwich for more than £1,000 and that was over 10 years ago! I've not spoken to him recently so I'm not sure he's still in the business but that was his market for several years.

On the other hand, if the budget is say £60 a week wouldn't a person be looking for 1 star HMO's in much the same way that they would be looking at B&B's or cheap camp sites for their next holiday?

Gina Blomefield

9:19 AM, 13th September 2013
About 6 years ago

Reply to the comment left by "Mark Alexander" at "13/09/2013 - 09:07":

Hmmm well I just feel that as the ratings for B & Bs, hotels etc are undertaken by local councils they are independently evaluated - don't think the AA do them any more? However trying to make a fair and realistic system of star ratings for a properties in which people plan to live is much more complicated - bad hotel or B & B you can just leave not so easy if you have signed an AST.

I think the professionalism of the landlord is also as important as the state of the property itself. You could get a brilliant looking property but still have a bad landlord who does not fix problems, protect deposits etc - unlikely perhaps but possible. Equally there are perhaps rather tired properties where the landlord is excellent in caring for the tenants.

Kirsty McGregor

9:27 AM, 13th September 2013
About 6 years ago

Reply to the comment left by "Gina Blomefield" at "13/09/2013 - 09:19":

Hi Gina
Thanks for your post - yes I understand what you mean, but I think Mark is right. We would really like to think that a 1* property would be a min standard for an LHA tenant for example, and it's a fact of life that better quality things cost more than others - and we can't all afford the best there is.

Completely agree that landlord accreditation is very important - and hopefully in time we could have a joint kitemark. But there are so many landlord schemes around already, it's a very dis-jointed market. However the market for property ratings really doesn't exist - certainly not in this form anyway.

We have been tending to find however that a good landlord generally means a good property...it's a natural progression to just being professional.

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