Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
About 2 weeks ago 35
There is a lot of talk these days about tenants needing security of tenure and organisations like Shelter would like Government to change legislation to force landlords to give tenants longer tenancies.
I acknowledge that tenants do need security and, as a landlord, I want to keep my tenants for as long as possible. Many people need to put down roots and build a life in an area but it is often difficult for them to do this when they are forced to move to a new home every six or twelve months.
On the other hand many mortgage suppliers will not lend to a landlord who offers tenancies that are longer than 12 months. Landlords are also nervous that a tenant may turn out to be a problem and a long tenancy means a difficult eviction.
So what is the answer? How can we, as landlords, give our prospective tenants the security they need while at the same time meeting the requirement of our lenders and covering our backs against the undesirable tenants forcing us to go through long and complicated legal procedures to remove them?
In my opinion it comes down to trust. The two parties of a tenancy agreement are both taking a risk. The tenant is risking signing up for a property that looks OK but may not be well maintained during the tenancy. There is also the risk that the landlord, who is standing there with a broad smile on his face at the viewing, may turn into an intrusive and uncooperative person once the agreement is signed. The risk for the landlord is that the prospective tenant, who has plausible reasons about why they are looking for a new home, may have been a poor tenant and has been evicted by a previous landlord, the local authority or an RSL. So how do we reduce the risk for both parties?
Knowledge is power. Many tenants now know more about their legal rights than landlords do and if they don’t know they will soon find a man who does. It is dangerous for landlords to remain ignorant of the law and regulation until they find themselves in a situation that may well cost them dearly in time, stress and money. I am always amazed at the lack of knowledge of some landlords; even quite experienced, hands on landlords often do not realise that they are putting themselves and their business at risk.
One of the most common reasons I find is that the person who owns the property sees himself as a property investor not a landlord. There is very little legislation that will affect a person who simply buys a property and keeps it empty while it increases in value – in fact there is increasing pressure to bring empty property back into use, and even doing this now comes at a cost. A person who lets his investment property is a landlord in the eyes of the law and he must meet all the legislation and regulation that surrounds that. Many investors think that by using an Agent to let and manage the property they can be “passive investors” but this simply is not true. Anything that the Agent does while working on a landlord behalf has consequences for the landlord and it is vital that the investor is fully aware of those consequences before choosing a Agent. Like landlords and tenants, some Agents do an excellent job while other do not. So into the mix of “trust” we must put the Agent.
There are tenants who will only let through an Agent because they do not trust landlords. There are tenants who will only let from a landlord because they do not trust Agents. There are landlords who specialise is letting to people with pets and others who will not take pet owners. There are landlords who advertise for those tenants who pay their rent with LHA and other landlords who advertise “No DSS”. These “preferences” are either based on perception, reputation, poor experiences or ignorance, but whatever the basis it all comes down to lack of trust.
I do not believe that the answer is more regulation or legislation, in my opinion we all need more education.
Rome was not built in a day and trust may take even longer, but it is an issue that we all need to address because it is only when we all begin to feel that we can trust each other that both landlords and our tenants will feel more secure. Perhaps at that point we will not be put under pressure to change our safe business practices like initial 6 months tenancies?
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