LANDLORD LICENSING AND REGISTRATION SHOULD BE CENTRALISED SAYS LETTINGFOCUS.COM

John Blackwood, a director of the Scottish Association of Landlords tells me he knows of many landlords who have just had their applications for the Scottish landlords register acknowledged and licenses issued by their local authorities – almost three years after they applied for them!
If the government goes ahead with similar proposals in England and Wales, will our local authorities or whoever administers it be as inefficient I wonder?
Perhaps, as Mr Blackwood suggests, it would be better to have a single central authority managing the scheme rather than having the whole thing handled by different town halls with varying level of efficiency.

BUT DO WE REALLY NEED LANDLORD LICENSING?
I would say if we must have it, then it must be enforced in a way that really drives out rogue landlords.
But let’s stop and think.
Who are these bad landlords, who do they prey on and how do they get away with it.
I suggest that a lot of these guys are letting to people in overcrowded accommodation.
I suggest that many of their tenant victims will be people who don’t know the law or who are not confident enough to stand up for themselves for fear that they will be evicted and wont find it easy to get another place to live.
Partly this will because they have a poor credit history (or none at all). I suggest many will be migrants, possibly illegal migrants with little English and perhaps also dependent on their “landlord” for a job.
Now let’s look at the position of a tenant who is not vulnerable but who has a poor landlord.
If this tenant’s landlord fails to carry put basic repairs or meet his landlords’ obligations under the law, the tenant can complain about their landlord and try to enforce their many rights.
OK, it is true, their landlord could carry out a retaliatory eviction at the end of a fixed term contract, but good tenants will soon find a good landlord. And they will know what signs to look for next time.

GOOD LANDLORDS AND GOOD TENANTS TEND TO GET TOGETHER
Personally, I like it when tenants come to me if they are good people but their previous landlord was the sort who could never quite get round to fixing the boiler or sort out the damp problem because I know they will really appreciate me.
The fact is that bad landlords end up with bad and vulnerable tenants and good landlords end up with good tenants and vice versa.
What licensing must do, if indeed it becomes law in England and Wales, is have in place very tough sanctions on those landlords who make VULNERABLE tenants lives a nighmare.
That must mean heavy fines which are enforced fast and a wide publication of the scheme especially among the most disadvantged.
But for goodness sake, leave good landlords alone.
And allow the good landlord to get rid of bad tenants too – and much faster than is allowed under the cumbersome court processes of today.

MORE TIPS ON USING A LETTING AGENT
Make sure you know the law. I know the law is deadly boring but as a landlord you are running a business and this means there are some things you legally have to do and some things you mustn’t do. And if you don’t comply you can face fines and even go to prison.
“Ah”, you say. “But if I’m using a letting agent they will deal with all the legal issues and my landlord responsibilities right?” Well, possibly yes, but don’t bank on it. Some agents still operate without any liability cover and are not part of any bonding scheme. If they go bust how long will it be until you hear about that? A few months, a year maybe?
And what would happen to any rent they were collecting for you in that time and all those gas checks that they are supposed to arrange for you?
So, you have to know the law (see chapter X) and occasionally check that they are doing what they should be doing for you as your agent.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book. The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, landlord registration and capital gains taxes.
I’m a property expert and property speaker - and I run the well known property blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting to anyone looking to buy property for themselves or to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier.
For landlords' insurance products such as rent guarantee cover and property insurance click on Ukinsurancenet. Don't forget to quote our reference code, LFOC, to get the best rates from them too. And find out about OTHER great deals we have arranged at our Property Affiliate page. More wil be added over the next month, once we have checked them out.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
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Landlords licensing, register & build to let - LettingFocus.com

It’s looking increasingly likely that all private landlords in England and Wales will soon have to be registered before they can let residential property.
The costs are likely to be low at about £50 per annum and will cover all private landlords but, natch, it looks unlikely to apply to those models of efficiency, the social landlords!
For decent landlords it looks unlikely that you will have to do anything more than you do now, apart from have to pay another fee, of course.
This new idea comes on top of extra work like tenancy deposits, HIPs and getting an HMO license (if you operate in that sector). all of which have been introduced in the last 3 years.
GOOD LANDLORDS WONT NEED TO WORRY
Good landlords already carry out repairs and they don’t intimidate tenants. And why should they? After all, decent landlords want to keep decent tenants not lose them.
The intention from the government is that the system will operate with a “light touch” to root out rogue landlords, but another compliance cost and another level of bureaucracy will be just one more thing to scare off both would-be landlords and the new “accidental landlords” who have fallen into letting because they cannot sell their house.
No wonder most letting agents think it is a good idea as more and more novice landlords will be ever more likely chuck their lot in with a letting agent rather than read a book on letting property and learn to do it right themselves.
BUT IS THIS REALLY ABOUT GETTING TAX EVADERS?
It is likely that a landlord would get a licence number which would have to be shown on all documents related to a letting.
A spin off of all this is that it would make it easier for HMRC to identify tax evaders and many think this is the real driver behind the move - because it is well known that the taxman thinks lots of landlords are evading tax. (If that is the case, we suggest a trawl of Land Registry data to show multiple ownership would be a better starting point!)
LETTING FOCUS’S VIEW
At LettingFocus.com we say another piece of regulation on top of all the others probably wont hurt too much but how it will be implemented is key.
There are undoubtedly some bad landlords out there and weak letting agents too - and if this roots them out then that is for the good of society.
But if it is just another bit of bureacracy with no teeth that will further put off good landlords, then it will be a waste of time and money.
One can only hope that implementation is better than it was In Scotland, the land of Big Government, where they already have a landlords registration scheme.
There, in year one, only one in 6 landlords bothered to register at all and rogue landlords continue to ignore the scheme despite the penalties.
WHAT ABOUT IMPROVING THE LUMBERING COURTS PROCESS TO SPEED UP EVICTIONS?
Good landlords will also rightly question when something will be done to speed up their ability to recover their property from bad tenants which can take 6 months to go through the lumbering courts process all the way to bailiffs and an eviction.
Indeed recent figures show it is taking longer than ever as more people fall behind on rental payments.
SMALL LANDLORDS MISS OUT TO THE BIG BOYS - AND IT DOES NOT SEEM FAIR The proposal for landlords licensing falls out of the Rugg Report from last year but it’s a shame that the Government is not expected to back Rugg’s other call for tax relief for landlord repairs, such as new roofs, windows or boilers.
And hey, there are other plans afoot too because the Homes and Communities Agency has invited big property firms and other investors to support a fund to build lots more homes for rent – so called “build to let”.
I can see the logic of this. It would restart the house building sector and provide places for people to live. All good!
But what I object to is that the government seems to be negotiating incentives for big investors like stamp duty tax breaks or guarantees to underwrite rents on unfilled properties to get them on board.
This is unfair on two counts.
First, the Rugg report clearly said that small landlords do the job better.
Second, government incentives almost certainly will not be available to small scale landlords and so will penalise them and create an uneven playing field.
But can we be surprised?
The current government seems to be getting increasingly close to big business as we can see from other industries - just look at food retailing where Tesco and the other big boys have been allowed to wipe out the competition from the smaller players.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the property investing experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book.
The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing and capital gains taxes.
I’m an expert property writer and property speaker - and I run the well known landlords blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting and consulting to anyone looking to buy property for themselves or to let out. I can help private individuals with any aspect of buying property or buy to let.
What’s unique about lettingfocus.com is that we offer independent unbiased property advice because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from these sources.
On the contrary, we are often asked to evaluate other property investments.
Find out about some great deals we have arranged at our Landlords Links page.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
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A Quick Review of the Rugg Report by David Lawrenson of Letting Focus

So much news about right now that I have decided to write an extra post to the blog!
All government sponsored reports into the private rented sector end up with landlords being made to look awful, right?
Well wrong.
For once, we at last have a report, the Rugg Report, which is sensible and which recommends only “light touch regulation” for good landlords. (The full report is called “The Private Rented Sector: its contribution and potential” and is by Julie Rugg and David Rhodes)
Sure, it suggests big changes, like mandatory licensing of all private residential landlords and managing agents but I think these proposals make sense if it means bad landlords and lousy letting agents are driven out.
The report starts off by recognising the importance and contribution of landlords in the housing market.
It proposes tax changes including an overhaul of the Stamp Duty banding system to enable landlords to buy more properties in bulk and the reform of Capital Gains Tax, so that landlords could quickly gain relief from property improvements.

NO PLACE FOR BIG LANDLORDS
It no doubt went down like a sack of spuds with the likes of the British Property Federation who had been calling (on behalf of larger, institutional landlords) for tax changes to encourage large scale” build to let” because Rugg said that smaller landlords often give their tenants better value for money than larger institutional ones and it seemed to pour cold water on claims that standards within the private rental sector could be improved by having more corporate landlords or making greater use of managing agents.
In fact it went on to say that there is some dissatisfaction with managing agents’ standards.
The report also suggests that poor tenants on housing benefit should have access to a wider range of properties and this could be done by helping tenants with rent in advance and deposits.
It rejected proposals by some housing charities that landlords cannot serve a section 21 notice if they have had a complaint about repairs.
Some social housing activists will not like this one bit, especially as the report said that retaliatory evictions (where a tenant is evicted if they complain about disrepair) are rare.
The report also rejected claims that “studentification” in university towns is a serious problem and that the problems that DO exist - e.g. noise by students - should be dealt with by existing agencies.
The proposed landlord license would cost £50 with points deducted for bad behaviour and the licence removed for serious breaches.
The money paid would fund a redress scheme – a compulsory ombudsman service to which all landlords would have to belong and to which tenants could complain.
The report’s findings are now likely to find their way into a Green Paper and pave the way for consultation and legislation.
All in all, a fine report with lots of sensible proposals.
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ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord experts.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property title - Buy Successful Property Letting - How to Make Money in Buy to Let.
The new edition is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on sale and rent back.
I’m an expert freelance property writer, property speaker and a well known buy to let blogger
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general property investing advice for anyone looking to buy property for themselves or to let out.
In my work as a consultant I help private individuals with any aspect of buying property or buy to let. What’s unique about lettingfocus.com is that we are independent property mentors because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
We simply give one to one unbiased advice and are often asked to evaluate other property investments.
In my corporate consulting role, I also advise banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my blog & find details of my networking, advice and property training programme at my website.Copyright: David Lawrenson 2008. This blog is updated once a week.
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HMO, Houses in Multiple Occupation - Still Money There (In Brum at Least!)

Whilst at the Birmingham Property Investors Show, I stayed with my young nephew in his multi let student house in Selly Oak.
What a fascinating area - it's pretty well all student HMOs here.
My nephew's place was not fully compliant in respect of the fact that though there were 6 of them living there, they did not have wash basins in each room.
However, it was decent enough accommodation - there were lots of other amenities - and for all I know Birmingham City may have adopted a softly softy attitude on when the wash basins must be put in - perhaps giving landlords time to make the changes (and for the government to change its mind on this rather daft aspect of licensing).
But wow, the yields here were good.

Good Yields on HMOs
I calculated his landlord would have been getting about 6.75% gross, though running costs on this kind of property will probably peg back net yields to 5%.
And student demand was very high. This was clear from the fact that most properties had notices on them to stop students calling to make enquiries about next year.

Downsides of Houses in Multiple Occupation
However, there are downsides to HMO lets for a landlord.
There is a lot of work checking people in and out and recruiting new tenants - especially if the tenants are all on separate tenancy agreements.
HMO properties also tend to get a lot of wear and tear -and it can be hard to get people to pay up for damage - as each tenant will blame the other. Expect to be asked to mediate a lot between warring tenants. This all takes a lot of your time up.
Often you have to pay the council tax and electricity and gas, especially if you are letting each room separately. And you may have to pay an HMO licensing fee if the property is big enough or if the local authority requires it.
This all hits the net yield.

ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
We are LettingFocus.com - the landlords’ expert and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
I have been a landlord and property investor myself for over 25 years. I know all about HMO and multi let property as I have let one for over 20 years.
At LettingFocus we offer independent unbiased
seminars for buy to let investors and landlords as well as one to one advice covering all aspects of being a landlord and investing in property.
Unlike many in the still largely unregulated buy to let and property “advice” business I am not linked to a property company, developer, estate agency or bridging loan provider.
As such I am able to give unbiased independent advice on where to buy (which areas), what type of property to buy, when to buy and how to buy property at a low price and whether or not to go for Houses in Multiple Occupation. I can also explain how to reduce the risk of getting a bad tenant.

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Read this Related article on Multi Let Houses: http://www.lettingfocus.com/pages/myarticles_HMOAdvice.html
Read this article on landlord licensing:
http://www.lettingfocus.com/pages/myarticles7.html

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