MP claims landlords are pocketing taxpayer money while neglecting properties

An MP has accused landlords of keeping taxpayers’ money while failing to meet basic property standards.

In a Work and Pensions Committee session for the Local Housing Allowance, Florence Eshalomi discussed the condition of private rented properties and how standards must be improved.

The National Residential Landlords Association (NRLA) acknowledged there are bad landlords in the private rented sector but says adding more regulations is not the answer.

Receive taxpayers’ money for keeping the state of the property unkept

Ms Eshalomi MP, the committee’s chair, challenged NRLA chief executive Ben Beadle over standards in the private rented sector.

She said: “The government cannot build 1.5 million homes tomorrow, but we have a situation where some landlords are receiving in excess of £15,000 or £20,000 per annum in rent.

“A number of landlords have multiple properties, that is their prerogative, but when it comes to the state of their properties, those same landlords do not want to engage with the system. We have a situation where in some properties there is damp, mould or mice infestations.

“You cannot contact that landlord for love or money, yet they receive taxpayers’ money for keeping the state of that property unkept.”

However, what Ms Eshalomi appeared to overlook is, as revealed in the English Housing Survey, the median gross income for landlords is around £25,000 before expenses, with 41% earning less than £20,000.

Ms Eshalomi then asked Mr Beadle: “What more could you as an organisation do to inform your landlords about their legal obligations to uphold their part of the contract at the same time as they are receiving government and taxpayers’ money for a property?”

Not to impose huge amounts of regulation

Mr Beadle acknowledged there are bad landlords in the private rented sector but argued that piling on regulations is not the answer to encouraging more landlords to enter the market.

He told the committee: “It is a very fair challenge, and I am not here to defend the indefensible or to defend bad landlords, just to be clear. As a trade association, we are here to support landlords, and that is why we welcome the Decent Homes Standard and Awaab’s Law.

“While it is right that we campaign and lobby, we also put our money where our mouth is in supporting landlords.

“We have no issue with increased standards. Despite not having a decent homes standard, four out of five properties in the private rented sector already meet that standard.

“The way that you get the private rented sector to step up is not to impose huge amounts of regulation on it. The private rented sector will thrive if it is allowed to, but at the moment we have significant barriers to entry with stamp duty. That is not going to encourage people to come into the sector.

“I am not suggesting for one minute it is all about tax giveaways and the like, but it is about a fair and reasonable package.”

Landlords are also struggling with costs

Elsewhere, in the committee, the NRLA called on the government to restore the Local Housing Allowance (LHA) rates to the 30th percentile of local market rents to help tenants.

Since March 2020, Local Housing Allowance (LHA) rates, which cap housing benefits for private renters, have been frozen.

However, the NRLA, also pointed out it’s not just tenants who are struggling with rising costs.

Mr Beadle told the committee: “We need to make a political choice on the number of people who are really struggling at the margins.

“I want to address the rent increases because I would not want you to form the impression that this is landlords jacking up rents where they can.

“My members are struggling with their costs as well, whether that is inflation or mortgage interest and not being able to offset that against their tax returns, the cost of regulations, selective licensing, possible minimum energy efficiency standards.

“All of that is having a huge impact on sentiment in the sector. We have a dozen tenants chasing every available home, and it is the real lack of supply that is driving rents up. I mentioned the political decision.

“If we had a commitment to setting LHA at the 30th percentile and unfreezing it for the remainder of this Parliament, it would lift 75,000 children out of poverty by 2029-30 at a cost of £1.8 billion.”

The full exchange between Ms Eshalomi and Mr Beadle can be seen below

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