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

by Kirsty McGregor

13:59 PM, 11th September 2013
About 7 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

Mark Alexander

9:47 AM, 13th September 2013
About 7 years ago

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

I would actually go as far as to say a good landlord is more important than a star rating. The most popular pubs are not necessarily the most expensive or trendiest, they do, however, tend to be the friendliest.

Wouldn't it be great if all good landlords were to choose to become accredited through education based schemes like NLA Accreditation etc. AND have all their properties star rated?

The rogues would be easily identifiable by tenants and the authorities and would be forced to up their game or deal with the crappiest of tenants, which of course they totally deserve to get.

Kirsty McGregor

10:33 AM, 13th September 2013
About 7 years ago

Reply to the comment left by "Mark Alexander" at "13/09/2013 - 09:47":

The star rating wouldn't be graded on how expensive/trendy/new the property/fixtures are. It's more about condition. We would want it to be as objective as possible, and to keep subjective opinions about fashion/trend completely out of it.

Yes the utopia of both a landlord accreditation & property standard ....one day I hope we'll look back on this feed and remember the bad old days! There's got to be a better way to improve quality across the board and easily differentiate the better ones...

Romain Garcin

10:48 AM, 13th September 2013
About 7 years ago

If only related to condition, then IMHO it would only potentially save time for potentials tenants who could decide not to bother with a viewing. Moreover, if landlord complies with this system he also probably has an EPC and nice pictures of the property in his ad, all of which have the same purpose.

Hotels, B&Bs, holiday lets, etc.m are different in that you rarely visit the place before you make a booking.

Anon

11:27 AM, 13th September 2013
About 7 years ago

I agree with Romain, most landlords will see this as an unnecessary expense regardless of how much or how little it costs and will not go for it unless it becomes compulsory by law, which I hope it won't.

Kirsty, I respect your idealism but I wouldn't go betting your life savings on this if I were you. It's going to be a tough sell and will require massive investment to stand any chance at all of reaching that tipping point you so desire.

You may manage to get a dozen or so to run a trial for you as a freebie and perhaps a similar number will pay you a tenner for a report to give it a go but even that will be a hard sell in my opinion.

Sorry to pee on your bonfire but sometimes it is useful to have honest feedback. Having said that I'm sure you will push on regardless.

Having read many of your posts on other threads I can tell that you are a nice lady and reasonably knowledgeable too. The enthusiasm I detect from your comments on this thread leaves me feeling quite certain that my feedback alone will not put you off. However, I do urge caution, take it slow, don't bet your house on the first marketing campaign thinking to yourself "this time next year we will be billionaires Rodney". I might be wrong but it doesn't hurt to be cautious does it?

Kirsty McGregor

11:53 AM, 13th September 2013
About 7 years ago

Reply to the comment left by "Anon " at "13/09/2013 - 11:27":

haha thanks ?Anon? and I appreciate your concern, but don't worry I'm not some dippy girl that's just had some wild idea (check me out on linked in?)

Landlords will only see it as an unnecessary expense if they can't see any benefits. There will be measurable and commercial benefits.

Without knowing who you are, I'm not sure whether you are qualified or not to comment on how much it costs to reach a tipping point. So I guess we'll just have to wait and see won't we? 🙂

Anon

12:04 PM, 13th September 2013
About 7 years ago

I wasn't suggesting that you are some dippy girl and I am disappointed you came to that conclusion although I understand your defensiveness given your passion for your product. I had already checked you out prior to commenting. I can't offer you the same openness due to my profession I'm afraid, I can however, assure you that we are not in the same line of business if that gives you any comfort. My comments were genuine. I wish you well.

Kirsty McGregor

12:23 PM, 13th September 2013
About 7 years ago

Reply to the comment left by "Anon " at "13/09/2013 - 12:04":

Thanks Anon, I wasn't being defensive, just curious as it's difficult to know who you are talking to. I appreciate your good wishes, thanks.

Mary Latham

15:23 PM, 13th September 2013
About 7 years ago

This discussion has taken place many, many, many times with local authorities. The idea of a star rating has been explored and dropped many times too. I will tell you why.
As Gina said “ professionalism of the landlord is also as important as the state of the property itself”

After years of property based accreditation scheme most local authorities have moved over to education based schemes for the very reason that it is not about property it is about management and that means knowing the legislation, regulation and realities of renting homes to people. We have not chosen to offer hotel or B&B temporary accommodation, we have chosen to do the most important job that there is – provide a home, a place where that person can feel safe and secure and put down routes. I have known landlords let very high quality properties and then make a tenants life miserable by invading their “quiet enjoyment” or not treating them with respect.
A good property manager does not let a poor quality property.
An education based accreditation scheme works because of the components of the scheme
1. The accredited person must be a fit and property person in line with the requirements of the HA 2004
2. The accredited person must attend a foundation seminar to learn about legislation, regulation, communication and documentation
3. The accredited person must work the schemes published Code of Conduct
4. The accreditation scheme affords, tenants, local authorities, fire departments and others an opportunity to make a complaint against an accredited landlord or agent at no cost. The scheme will arbitrate based on documentary evidence from both parties. The accredited member may be sanctioned by a. an instruction to deal with an issue b. suspension until the issue is resolved c. an official warning d. a requirement to attend a relevant seminar to learn how to deal with the issues and avoid making that same mistake in future e. removal from the scheme
Most local authorities, who support accreditation based on education, value those landlords who have chosen to become accredited and offer incentives like discounts on HMO licence fees, free EPCs, access to funding, access to private sector leasing schemes…. These incentives encourage landlords to become accredited and to ensure that they do not lose their accreditation.
Local authorities can use their limited resources on chasing and dealing with those landlords who are not doing their jobs properly and who have not become accredited and many local authorities offer landlords the opportunity to become accredited rather than face enforcement action – some even make it a licence condition.
In my opinion it is better to encourage a landlord to spend money on his property if there is a need to improve it, rather than forcing him to spend money on schemes that have huge overheads as in the case of any scheme based on a property inspection.
In one area of the West Midland the local police championed a star rating scheme and it died a very early death – why? Because landlords did not support it. In the same area most of those landlords have chosen to become accredited through an education based scheme and we have seen skips full of old doors, bathrooms suits, kitchens etc where landlords have upgraded their properties having become aware of their legal obligations and because the wanted to avoid complaints to the scheme from their tenants. The local university and students union have also supported the scheme and will no longer work with landlords who are not members – this has completed the circle and made it essential for landlords to join.
One of the landlords made this comment about the suggestion of a star rating
“Yes a great idea it will be a shopping list for burglars, who will imagine that the better properties have attracted the tenants with the best items to steal”
Another landlord said
“It will become a bun fight as landlords spend money on getting a better start rating and forget that some tenants can only afford basic accommodation but will not want to say that they live in a one star house”
Accreditation based on education puts the business of being a landlord in the same category respected professions because it is based on teaching the landlord how to do the job, a Code of Conduct to guide him and allows the good landlord to get on with his business without unnecessary expense and interference. At the same time it gives tenants a list of landlords who are accredited and offers them redress if things do go wrong.
I have delivered two full day seminars for two different schemes this week and the feedback from the delegates at the end of the seminars confirms that “we don’t know what we don’t know” and my firm belief that most landlords who get it wrong do so by mistake not with malicious intent. Education reduces the potential to make mistakes and makes us all better landlords.
Follow me on Twitter@landlordtweets

My book, where I warn about the storm clouds that are gathering for landlords is here >>> http://www.amazon.co.uk/dp/1484855337

Kirsty McGregor

16:08 PM, 13th September 2013
About 7 years ago

Reply to the comment left by "Mary Latham" at "13/09/2013 - 15:23":

Hi Mary, thanks for looking & this & replying so thoroughly.
Yes I totally100% agree with you that landlord accreditation is necessary, and where it works well it increases standards. But...landlord accreditation isn't mandatory in many areas & in areas where it isn't, does the tenant understand who is accredited and who isn't? A landlord that shows a trade association logo on his materials may appear to the layman to be accredited. We know it's completely different. But do they?
In a nutshell we need both.

I am willing to be shot down, but I expect that any star rating previously has just assessed whether a 'home' (your are quite right, these buildings are homes & not a bed for the night & that's exactly our point) meets the H&S obligations along the lines of fire safety, security, accessibility etc. much like the HMO licensing requirements. That's important, but it's not everything the tenant is looking for in their home.
So what about:

- the structure of the building? My MD goes out to countless properties that are making insurance claims that are in dire straits and the poor tenant is suffering hassle and loss because of water damage from leaking roofs etc. They didn't realise when they moved in that the roof was in a poor state - how many tenants would? No matter how beautiful the photos are, they won't show the state of the roof.

- the facilities? how suitable & comfortable it is to live in? Is the burglar alarm serviced regularly by the landlord, or if there is cable or satellite already in place, or is there a suitable number of power points in the kitchen, or how secure is parking etc. This isn't covered on any EPC and probably not included in the narrative of property details - but they are things a tenant would appreciate & if they thought about them, they'd pay more/rent that property easier. We are just highlighting these areas to tenants so it is something that they will think about.

Granted, completely agree that we are unlikely to be asked by landlords who think they have a 1* or 2* property to rate it....certainly not in the early days. This is a product for better quality properties to differentiate themselves. There are landlords who are very proud of their properties...and this is for them. It's purely for marketing advantage. Not for health & safety because we have things in place already for that (we hope!). We think it has the ability to drive up standards in the longer term, but initially this is way of giving tenants more knowledge about the differences in rental properties that are in their market.

If we don't balance the cost with the benefit, we won't succeed. I'm in business, I understand there has to be a commercial benefit.

It won't be for all the market initially, but I think, like everything, it will evolve. And those that get in earlier will benefit from much cheaper prices, so the risk will be less for them.

We think the typical properties/landlords we will see are:
- props aimed at family or professional lets
- above average quality, want to obtain higher rentals & attract tenants who have higher standards (who will hopefully look after it better)
- landlord probably not a professional landlord with countless properties & therefore able to rely on his/her reputation - probably less properties, less experienced, may not live close to the property etc

Does this make sense?

Mary Latham

17:00 PM, 13th September 2013
About 7 years ago

Kirsty Yes it all makes sense unless you are a landlord.

Good landlords are tired of "paying" because of bad landlords. This is why we deeply resent HMO licensing - where the good landlords apply and pay up and the bad landlords continue to let and stay under the radar - making more profit because they are reducing their overheads by avoiding the cost of the licence and the work involved in meeting the conditions.

If your aim is to give good landlords a way of showing that their properties are better than others you may get some landlords who will do this - no many I assure you.
If your aim is to improve the properties that are offered for rent this will not attract the landlords with sub-standard properties and it will not reduce their chances of letting because of the current demand.

In the current market landlords have no need for a star rating - this would only be necessary if there were more properties for rent than tenants who want them.

There is a glass ceiling for rent in most areas - in London and the South East where this is not the case at the moment this will be very difficult to change. No matter what a landlord does to a property the market will dictate the rent. I have had a rolling refurbishment program in place for the past 40 years and each time I have refurbished a property it has not attracted higher rent. I refurbish to keep my properties up to my standards and give my tenants a nice home - and of course to maintain the value of the property.

I refurbished a property three years ago at a cost of £28K, this included re-wiring, re-plumbing, fitting energy efficiency measures, new kitchen and bathroom and of course re-plastering, redecorating, new carpets, curtains and furniture. It looked great but it had looked great before I began and I offered it for rent at the same rent as before because I knew that I would not break through the glass ceiling.

A landlords reputation only makes a difference in certain markets ie students, in most markets each tenant comes along in response to an ad. and takes the landlord and the property on face value.

I am sorry to say that tenants with high expectations, who pay high rents, do not always treat rented properties with respect - they can be over demanding and drive the landlord crazy, only to move out leaving the property filthy. This happened to me in a high end flat let to two professional women a few weeks ago. This was the first time that I actually paid cleaners because I hadn't got the three days it took to clean the flat before it could even be shown never mind let it. They had been on the phone and text throughout the year about every nit picking thing that you can imagine and I was horrified when I moved the cooker as was faced with samples of every meal they had eaten for a year and I am not even going to tell you about the bathroom and the fact that my feet stuck to the carpet!!

To summarise landlords need to spend our money keeping our properties in good order and we don't want to spend more money proving that we have done so, especially since it will not increase our rental income or reduce costs or voids.

In my opinion your scheme would work very well if the market were to reverse and tenants had more choice - this will only happen if there is a huge increase in building.

I will be very interested to see if landlords prove me right and of course reading posts about what other landlords think about this scheme. How many of us would actually pay for star rating? When it costs us nothing to ask an outgoing tenant to complete a satisfaction survey to be shown to future tenants.

Follow me on Twitter@landlordtweets
My book, where I warn about the storm clouds that are gathering for landlords is available on Amazon title. Property For Rent – Investing in the UK: Will You Survive the Mayhem? http://www.amazon.co.uk/dp/1484855337

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