Punishing private landlords – help or hindrance?

by Paul Shamplina

19:30 PM, 5th September 2017
About A year ago

Punishing private landlords – help or hindrance?

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Punishing private landlords – help or hindrance?

Everyone knows that rogue landlords bring down standards and should be rooted out, but have recent buy-to-let changes gone too far in punishing the good landlords who provide an excellent service and high-quality accommodation, as well as people who actively choose to rent not buy?

In the past eighteen months, the Government appears to have declared war against Britain’s estimated 1.8 million private landlords. Stamp duty has been put up, taxes have increased and the ever-changing rules and regulations have left many landlords confused and uninformed about their obligations. The outcome? Well, it’s still early days, but judging by the 49% fall in buy-to-let mortgage lending in the past year, I think it’s safe to say the market is shrinking.

One of the supposed driving forces behind the changes is to “level the playing field for homeowners and investors” by making buy-to-let less attractive, which in turn will create greater supply of properties for first-time buyers.  But who is this assault on private landlords really helping…or more to my point, hindering?

To some people, getting that first step on the property ladder is very important and I agree that there should be more support in helping people achieve their home-owner aspirations.  However, we must also remember that the private rented sector provides much-needed homes for those people who are not ready to buy, or quite simply do not want to purchase a property because they are happy having the flexibility of renting.

The UK has a lot more students, especially from overseas, who typically want to rent, young professionals are attracted by the freedom as their careers invariably change direction, and even retirees looking for opportunities to move closer to family or travel are opting to rent. Worryingly though, according to The Royal Institution of Chartered Surveyors, rents are likely to rise by 25% over the next five years as landlords scale back their portfolios, leaving tenants fighting over diminished supply.

I have worked with thousands of landlords over the years, some of which it’s fair to say had failed in some part in their duty of care.  But these are the minority and you can see examples of where they have gone wrong in Channel Five’s ‘Nightmare Tenants, Slum Landlords’, which Landlord Action features heavily in, trying to educate landlords and tenants on the pitfalls of buy-to-let.

However, I have also worked with far more excellent landlords who keep well maintained, beautifully decorated rental homes.  They are fully compliant with regulation, have the necessary deposit protection and insurance in place, and attend to their tenant’s every request efficiently and professionally.

In addition, I bet there are also lots of landlords and tenants out there who will identify with a situation where patience and empathy has gone a long way. You see, landlords are a diverse group of people clubbed together under one title “landlord”. They can be teachers, doctors, nurses, retirees, the list goes on, but they are also all people. When a tenant has a genuine reason for why they are late with their rent, for example, through sickness or a problem at work, there are many landlords who will be willing to listen to their tenants and support them by granting a little extra time or setting up a payment plan to get them back on track. Remember, most landlords want tenants to stay in properties as long as possible, even by reducing rent, to avoid voids and re-letting costs.

Despite recent efforts to increase institutional investment and large-scale PRS developments, in the belief that the consumer (tenant) will be offered a better class of accommodation and local amenities, the sector remains dominated by small-scale landlords. However, the build-to-rent model, with market rents, may not be suitable for a large proportion of the PRS market, particularly low-income households.

If landlords continue to be vilified and punished, more and more will be forced out of the market. But without any guarantee that it will make a difference to the people who want to buy property, and certainly not in the same way as say reducing stamp duty would, aren’t we just shifting the supply problem from buyers to renters?

Yes, there are bad landlords but also good landlords who offer high spec accommodation at affordable prices with great management service.  Let us not forget….there are also good tenants and bad tenants, just as there are good businesses and bad businesses – but those that perform well should be praised.

Maybe it’s time we stopped the “landlord bashing” and gave some recognition to the ones who are doing a great job in supporting nearly 20% of our housing market!

In fact, I think we should have a National Landlord Day to celebrate these unsung heroes and highlight the vastly positive experience of most tenants. A well needed shot in the arm for an increasingly beleaguered sector but I’m not sure how that would go down with the National press, Shelter or Generation Rent?  

Contact Landlord Action

Specialists in tenant eviction and debt collection. Regulated by The Law Society.


Comments

terry sullivan

9:30 AM, 6th September 2017
About A year ago

osbornes agenda was to get rid of small landlords so his city mates could cream off profits--same with Royal Mail sell-off

Matthew Dorrington

11:39 AM, 6th September 2017
About A year ago

To be honest I have to ask myself the same question, (help or hindrance) another thought was have the vast majority of most rogue landlords now exited the market and all the new rules and regulations just penalizing the genuine landlord (Investor) ?

Irrespective of that we just need to work with the new format working with tenants and steering the ship forward to our own personal needs and property investment strategy moving forward.

Great working with you Paul and the team on the programme, it was a positive outcome! Thank you

Ian Narbeth

12:11 PM, 6th September 2017
About A year ago

It rather depends on your definition of "rogue". With a plethora of rules and ever-changing regulations, being a landlord is becoming a bureaucratic nightmare. Create dozens of new rules in any walk of life and you will find that many people won't manage to obey every single one of them.

Take the new Right to Rent rules. Five year maximum penalty for housing an illegal immigrant but if you don't check the paperwork of your native British tenant (wasting the tenant's time and yours) you are guilty of unlawful discrimination. Woe betide the landlord who doesn't keep all the records for long enough. Next I expect landlords will be penalised under Data Protection for having kept records for too long.

This bureaucratic complexity enables the authorities to pick and choose whom to punish because they can almost always find some infraction, even with the most assiduous landlords. Government then becomes by men not by laws and allows those in power to make examples of some landlords "pour encourager les autres". Make infractions by landlords criminal offences and you can label almost any landlord as "rogue". Suits the left-wing politicians but doesn't build any more houses or help tenants.

Roanch 21

14:50 PM, 13th September 2017
About A year ago

I went to a rogue restaurant the other day. Food was awful, overpriced and service was terrible. I didn't feel the need to report them officially or write to The Guardian but I did mention it to my friends and aquaintances. But I can tell you that I wont be going there again.

My point is that in a free market these things get sorted out. I'm sure this restaurant wont survive for long. Customers will always freely choose somewhere better value, or with better service or a better product.

It's the same if you don't like where you live. Just do something about it. Normal people would just freely choose to move somewhere else. First call - try a Landlord recommended by a friend. So I'm thinking that the tenants effected by Rogue Landlords are not able to move for some reason.

So who are the victims of these Rogue Landlords?
Maybe they have a history of spending their HB on Sky TV and holidays and now have to get HB paid direct
Maybe they're too lazy to work
Maybe they're in the country illegally
Maybe they've got a pack of Staffie terriers living with them.
Maybe they 'need' to live in Hackney and the only place they can afford is an overcrowded broom cupboard with no fire protection.
Maybe they've tried the nice Landlord recommended by their friend only to find that he's gone out of business after having properties trashed by HB Claimants, ripped of by Claimants not paying him the HB properly, shafted by the tax man and demonised by the public.

It's a market out there. Tenants need to market themselves if they want to get the better Landlords. If you don't tick all the right boxes Landlords may well make a business decision not to accept you. However the Rogue Landlord that doesn't need any boxes ticking will always accept you.

If only we could do something to encourage good Landlords so that it was the Rogues that went out of business rather than the nice ones. And lets make tenants responsible for their own actions.

Gromit

15:11 PM, 18th September 2017
About A year ago

Reply to the comment left by Roanch 21 at 13/09/2017 - 14:50
The Governments response is usually more regulations. Not realising that rogue Landlords will just ignore them (as they do all other regulations); and just increase costs to the majority good Landlords who have to then charge higher rents, driving more Tenants to the cheaper rogue landlords.

When will they realise that regulation without enforcement hits the good guys not the bad guys?

H B

17:58 PM, 18th September 2017
About A year ago

Reply to the comment left by Roanch 21 at 13/09/2017 - 14:50
Would the free market have sorted out this landlord?
https://www.standard.co.uk/news/crime/rogue-westminster-landlord-who-endangered-tenants-lives-fined-more-than-200000-a3637566.html
"council inspectors found a dangerous electric cooker hob with a deadly exposed live cable which had been joined together with tape. The second-floor balcony was rotten and could have collapsed."

Having read this in today's paper, your reply comes across as a bit glib. Most of the regulations are about fire safety, but this is a clear example of someone letting a death trap. Perhaps you think Mr Hu would have upped his game after someone actually died - perhaps people would mention it at the funeral and word would have got around, like it your restaurant example, but I doubt it.
When I let my flats, the tenants judge themselves on the cost, location, size etc, but they can expect of me that the flat isn't going to kill them.

Mark Shine

21:24 PM, 18th September 2017
About A year ago

Reply to the comment left by H B at 18/09/2017 - 17:58
Note the article stated his company let the property (i.e. he is a "corporate" landlord) so unaffected by S24. Having falen for Osborne's doublespeak(not!!!), I was under the impression that all corporate LLs whom the govt have somewhat suspiciously given a HUGE competitive fiscal advantage to, were somehow automatically guaranteed to be top quality professionals? 😂😂😂


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