What if the PRS didn’t exist?

by Ben Reeve-Lewis

15:32 PM, 23rd November 2011
About 9 years ago

What if the PRS didn’t exist?

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What if the PRS didn’t exist?

By Guest Columnist Ben Reeve-Lewis


I work for a council in London. I’m the landlord’s nemesis, the bogey man, a Tenancy Relations Officer; the guy who prosecutes landlords for harassment and illegal eviction, the one who gets injunctions out against them, has them arrested, helps tenants claim damages against them, kicks doors in and pushes tenants back into property when the landlord doesn’t want them.

I looked at the new Housing Strategy and the provisions of the Localism Act this week with great interest. Not to see how many shiny new legal powers I may have been given but with a sense of relief that I can at last do something more constructive and useful with my time.

I’ve been housing’s answer to The Sweeney since 1990 and apart from individual successes and job satisfaction, my work and that of hundreds like me has had little effect on improving property standards or eradicating thugs and bullies from the Private Rented Sector.

Even in the 1990s I recognised that there had to be a better way to raise standards in the PRS than running around with a blue light on my head. Sure, I have dealt with some contemptible bullies and nutters among the landlord fraternity but it has to be said I have also met their match among the tenants as well.

At last Government thinking has caught up.

The right to buy scheme denuded the public sector of social housing and the loss of revenue on the sale didn’t allow for the building of replacement homes, which is one of the reasons that we have a housing shortage now. Grant Shapps has promised ‘Son of Right to Buy’, the latest version with a 50% discount and a home to be built for every one sold, although how you build a new home with only 50% revenue is going to be interesting to watch unfold, especially as Government will still take a cut (the strategy doesn’t say how much) and I presume the council will have to make up the extra through rent receipts.

But most importantly this means less social homes, at least for the medium term and with housing benefit caps and universal credit on the horizon and the Localism Act which widens council’s powers to rehouse homeless applicants in the private sector, the council needs private landlords more than ever. It doesn’t make any sense to just threaten and enforce all the time.

Luckily, both government and councils themselves are waking up to this situation. Central government has relaxed restrictions on local authorities and is urging them to partner up with the PRS. They have even allowed councils to turn a profit in deals we set up. In council terms this is an absolute heresy and has caused more than one of my colleagues to have to sit down and reach for their Ventolin inhaler.

The challenge for councils is going to be in seeing what is needed from the entrepreneurial side of the fence and it will take a while.

I have heard that when training an elephant the Mahouts of India tether them to a steel post driven into the ground when they are young. By the time the elephant is full grown the post is the same size and the elephant could easily rip it out and wander off but their conditioning keeps them there. It’s going to be like that.

Similarly, I have heard if you put thousands of fruit flies in a glass box for half an hour and remove the box they continue to fly in a cube shape. It is going to take many council workers quite a while to stop flying around in a town hall shape but we will get there.

Councils need to start building relationships with their local landlords, helping them out with everything from housing advice, to assistance claiming grants, sorting out benefits etc. Many councils have started what are generically called Social Lettings Agencies, like a high street letting agent but with far more facilities, support and professional knowledge.

What we will need from our landlords will be a defined property standard and a standard of lawful behaviour towards the tenants. The thing is, they don’t need us. They are doing fine by themselves, so in order to bring them onboard we will have to provide a hell of a lot, and that is the aim.

Imagine you are a landlord who has an organisation they can go to that they can trust and who have instant access to Environmental Health, mediation services, free legal advice and even eviction specialists like me on tap who could help them to evict nightmare tenants without messing up the paperwork. An organisation who doesn’t just stonewall them and refuse to give information like before, but a team who are on first name terms with their landlords who will jump in when there is a crisis and aren’t just looking for their 10% like a high street agent.

That is the future of the private sector/council world and it is like Christmas 1914 when the Tommies and the Germans came out of their trenches to play football, only this time we wont be climbing back into them again.

The whole rental landscape is changing; homelessness is already on the increase and with so many landlords moving away from housing benefit claimants because of the cuts, especially the single room rate extensions due to come into force in January, councils are also going to be leaning on external support agencies like the Salvation Army, Homeless Link and the National Homelessness Advisory Service as well as out private landlords.

Councils don’t have the resources or facilities to deal with all this in-house anymore.

If the PRS didn’t exist the housing world would be deeper in the mire than it already is. The resource is there, it has been for years in the shape of what the PRS provides and what the council have always provided but up until now there wasn’t the metaphorical software to allow the 2 sectors to cooperate with each other.

With prohibitive lending practices in the form of ludicrously high deposits giving rise to what the Halifax termed ‘Generation Rent’, more and more people relying on the PRS we cant allow it to just go it’s own merry way.

It’s not stretching a point in the current climate to say that the PRS is like an emergency service, people need rented homes, councils and housing associations don’t have enough to plug the gap. However, property standards are lowest in the PRS and if we are to raise the game and make the UK’s PRS something that serves the community councils need to roll their sleeves up and get in there.

Private-Public partnerships will be the way forward from now on. I honestly think this is the best thing to happen in housing since George Peabody first got cement on his trousers.


Ben Reeve-Lewis

Ben Reeve-Lewis has worked in Landlord-Tenant law since 1987. He operates variously as a Tenancy Relations Officer, a housing blogger, particularly on Tessa Shepperson’s Landlord Law Blog, a housing law trainer for the Chartered Institute of Housing and a broadcaster. In his time he has been a landlord, a tenant, a letting agent and a defender of mortgage repossession cases. There isn’t much left in housing for him to have had experience of.
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Comments

1:08 AM, 27th November 2011
About 9 years ago

Ben do you think your workload will start to decrease if in 2013 the EU regulation preventing BTL mortgages being obtained on the rental income criteria comes into force.
This on the basis that there will be less landlords being able to enter the market unless they earn a high income elsewhere.

Mary Latham

11:15 AM, 27th November 2011
About 9 years ago

Anything that prevents the PRS or any other organisation from increasing the supply of home is going to increase homelessness its as simple as that.

The PRS is made up of two types of landlord, those who have large holdings and their rent is their main or only source of income and those who have a "day job" and have invested on just one or two properties often taking little or no income from them because they are their "pension" fund.

The landlords who have large portfolio are the ones who are most vulnerable to changes in funding, increases in interest rates etc. but, in my experience, it is these landlords who are more likely to take a chance on working with local authorities and will allocate some of their properties to provide homes for those who local authorities cannot house themselves. If these larger landlords are prevented from further investment the local authorities will struggle no matter what services they offer to the PRS.
There are two other issues that need to be addressed if landlords are going to work with LA's the first is Insurance - many insurance companies will not cover properties that are tenanted through local authority nominated tenants and others who will not cover properties that are let on a long lease to LA's. There are also lenders who will not allow landlords to take long leases with local authorities and some who will not allow certain client groups as tenants.

In my opinion there will be more and more landlords who will want to work with people like Ben, not least because anti social behaviour and rent arrears are becoming more and more of a problem for the PRS and Ben will have the staff who have training and skills to deal with these issues. It is important to deal with the issues of insurance and lenders because until we do any scheme to get landlords and LA's working together will fail.

There is, I think, an opportunity for LA's to work with accidental landlords who have just one property which they have inherited or cannot sell. Many people are letting until they can sell but if they find a way of letting those properties that will not give them a workload and will give them a decent return they may be pursauded to continue to let longer term - just how LA's contact these people is not clear - perhaps council tax records might show who is long term empty and for what reason?

In a nutshell I am really delighted that people like Ben are now seeing us as viable partners and are working hard to provide services that we want to use but the issues that I have mentioned must be addressed before we move forward.

23:42 PM, 27th November 2011
About 9 years ago

There is a major problem here in addition to the insurance issue.
When Universal Credit is introduced thes type of tenants won't pass the rent money onto the LL and you would have to evict.
The county court system is useless; dysfunctional and not fit for purpose.
RGI is unlikely to be obtained on these type of tenants and consequently very few LL will wish to risk their properties and livelihood on these type of tenants.

Ben Reeve-Lewis

7:36 AM, 28th November 2011
About 9 years ago

Many points raised in there by both of you and all will most definately be adressed. This is the challenge ahead. I was talking on Friday night to the person who is hotly tipped to be overall manager of the new team and the one who can really make a difference with me (Hopefully) as lieutenant and we botyh said we dont have a problem with the landlord end of things, even given these issues you mention. They are logistical in nature and even if we have to arrange meetings with insurance companies to get a deal we will. Fed up with dealing with the "Computer says no", I've been meeting litigiation departments of major high street lenders lately and getting deals for my borrowers in difficulty from these faceless organsiations. Our main area of concern is from within - changing entrenched mindsets into entrepeneurial, 'can-do' ones.

I think you are misunderstanding the role of social lettings agents a bit though. The aim isnt to simply use the PRS to rehouse the homeless. We already have the team in place for that and many landlords onboard, it only needs expanding. We are also looking to the PRS to provide homes to people just on our housing waiting list and later on, as the team develops, to act just like a high street letting agent, advertising properties and finding tenants.

In addition we will also be offering eviction services to our landlords, a letting agent who gets the paperwork right, imagine that? haha

Some people have expressed concern that there may be a conflict of interest in the supportive team also being the enforcement team for the council but it isnt a concern I share. If we have good enough relationships with our landlords there will be enough leverage when they fall off the wagon to get things done without prosecution. We can leave that role for the real rogue landlords who we wouldnt be dealing with anyway, which is the other side of the coin that I keep banging on about. Working with our landlords free's up resources to prosecute the real rogues and shines a spotlight onto them as they stand out from the vast majority who we will know through building relationships

Tony Atkins

9:54 AM, 6th December 2011
About 9 years ago

I found the programme last night on Empty Homes very interesting. Firstly the One Million Homes figure isn't correct, because most of those are just standard churn of delayed sales, rental voids, probate, or someone living abroad for 6 months. But still there appear to be 350,000 long-term empty homes, and for many of them, there's plenty that could be done to bring them back into use, often involving cooperation between owner, council and prospective tenant.

For example, there was the guy who had moved in with his new partner, but couldn't afford to sell his house (negative equity, had no money to pay off the remaining loan) or afford to upgrade it. So the numpty had been paying mortgage and council tax and some heating bills on this empty house for three years, as well as in his main residence. Most of the house looked fine to me and was better than most of the rental flats shopwn in the programme, but he claimed he needed to upgrade it before it would rent. Anyway, the house was renovated to a basic but clean and dry standard by a mix of some pump-priming cash from Channel 4 and the free labour of the landlord and prospective tenant, who then moved in. She and her kids got a better house; the landlord was no longer wasting £400 a month. It was unclear if C4 expected to be reimbursed by some regular monthly payments out of the rent, but if the Council took this role and had the money, they could seek such a repayment from the PRS landlord.

This sort of stuff ought to be obvious, but the problem is how to bring people together - empty home, council capital, landlord and tenant's free labour. Do council tax departments proactively contact all owners of empty homes claiming exemption, or houses where council tax is being paid but the electoral roll shows no one is resident, and ask them why the house is empty and offer to assist? Does it assess which people on its waiting lists would be prepared to accept a PRS home and offer their free labour in exchange for a better upgraded property? Young single people find it almost impossible to get council housing, as families take priority, but I bet lots of them would love the opportunity to renovate an empty home and create a houseshare/HMO, if only someone were coordinating this and providing the often surprisingly small amount of upfront capital to buy cheap kitchen units, showers etc.

This strikes me as Localism in action. As a parish councillor and small property developer/landlord, I would love to get involved in such a project on a pro-bono basis, but I'm intimidated by the iron wall that appears to separate my borough council's statutory powers and responsibilities as regards privacy laws, council tax and council housing (with its allies in the housing associations) and evil, grubby, profit-making creatures like me.


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