Scotland Landlord Registration Scheme Review Makes Grim Reading
A new report on the Scotland Landlords Registration Scheme confirms what we have long suggested – that the scheme has failed on many of its objectives says David Lawrenson of LettingFocus.
Many people, in government and elsewhere, would like to see the private rented sector “regulated” more.
Of course they often have different ideas about exactly what sort of regulation they have in mind.
The now much forgotten, but generally brilliant, Rugg Review recommended that private landlords should be regulated via a very low cost scheme and broadly we welcomed the recommendation and the way Julie Rugg envisaged it working. (Most landlords associations were not so convinced, but as an independent expert I always take the line of “what’s best for society / the taxpayer” and I found myself agreeing with Rugg.)
However, one regulation scheme that I have been a constant critic of is the Scottish Landlords Registration Scheme.
Scotland’s Landlord Registration Scheme
In Scotland, just about all private landlords have to pay to be registered. The origins of Landlord Registration in Scotland are contained within the Antisocial Behaviour etc. (Scotland) Act 2004, which required almost all private landlords to apply for registration with their local authority.
So, what were the objectives of the scheme?
The Scottish Government Leaflet ‘Landlord Registration’ (2006) stated that:
‘All private landlords must register with their local authority. This gives tenants assurance that landlords are fit and proper people to let property, and gives the local authority a full picture of the private rented sector in their area. The requirement (to register) will help local authorities to remove disreputable landlords from the market, protect tenants, and protect communities from the impact of antisocial behaviour and mismanaged property.’
My Past Criticisms of the Scheme
Over the years, my main criticisms of it have been that
1. That it has cost far too much money
2. It singularly achieved very little in bringing rogue landlords “to book”
3. Landlords in Scotland tend to see it as a bureaucratic hassle (especially as they need to register in each local authority where you have a property) and that it acts as a tax on good landlords
4. There is little evidence that it has raised standards in the private rented sector in Scotland
Now the Scottish Government has reported the results of DTZ’s review of the Landlord Registration Scheme. We think this review makes pretty grim reading in terms of effectiveness in meeting objectives and budgetary accountability. In other words, it confirms most of the things we have been saying.
These are some quotes from the paper:
Extract of DTZ’s Findings for the Scottish Government
1. At this stage, it continues to be difficult to quantify exactly how many landlords have not yet registered and whether they do not register because they are unaware of the requirement to do so or because they ignore this requirement.
2. The research findings reveal that landlords are now more likely to have access to information and advice provided by local authority Landlord Registration teams. However, there is no guarantee that management of property among private sector landlords reaches a specified standard.
3. Many local authorities do not have a performance and monitoring system in place for Landlord Registration.
4. While feedback from the survey of local authorities, case studies and stakeholder consultation indicates that the IT system has improved, there continue to be many frustrations with the system and suggestions for improvement.
5. Problems with the user friendliness of the website are evident and a clear picture of the problems which landlords have in using the system is required before any changes are made.
6. The problems associated with the landlord website (such as user difficulties, labeling, joint applications and reporting tools) and associated administrative systems add to the administrative burden within local authorities.
7. Within the central administration of the scheme, there is scope for improvements in relation to the administrative process associated with fee payment, reporting and governance.
Fees and Admin
8. The fee payment system generates delays in payment processing and failed payments are resource intensive and take a long time to rectify. If timescales are improved, local authorities will be able to more effectively plan resources and reconcile the data with their records, which should be standard practice.
9. In the main, fees do not cover local authority costs, many being supplemented from other budgets. This lack of income means that resources are focused on the administration of the scheme rather than investigation or enforcement activity.
10. Many local authorities do not have a performance and monitoring system in place for Landlord Registration.
11. There is evidence that the sector is now more aware of its obligations when acting as a private sector landlord and there have been some improvements in landlord behaviour. However, the evidence collected suggests that Landlord Registration has not removed the ‘worst’ landlords from the sector.”
12. At present, there is no clear understanding of the overall administrative costs of Landlord Registration and this is not taken into account in any of the fee structures. Local authorities need to improve budgetary practices, so that they are aware of the income and expenditure associated with Landlord Registration.
13. There is little or no appetite for the administration of Landlord Registration (those functions currently undertaken centrally) to be carried out locally. Indeed, it may be more complex and resource intensive to deliver the system in this way. An alternative, which merits consideration, is the external administration of the scheme by an independent party or regulatory body.
Not pretty reading is it?
Benefits of the Scheme
OK, there have been some improvements in Scotland but reading the DTZ report, they seem few and far between and remain unquantified.
In conclusion, we think the costs of this scheme far outweigh the benefits achieved.
What’s needed for the PRS is sensible regulation, fairly enforced with real teeth to focus on and drive out the rogue landlords – the sort of operator that most in the PRS do not want to have in the sector. The worst indictment is that the costly Scottish scheme has failed to do this and we suspect rogue landlords continue to operate with impunity.
I fear that some of the “Regulate the PRS” lobby would like to bring in a similar system in England and Wales. I hope they will now stop and learn from the Scottish experience and design better and more efficient ways to control the sector.
ABOUT LETTINGFOCUS AND WHAT WE DO
LettingFocus.com is the home of Private Rented Sector Consultancy and advice.
Services to Businesses and the Public Sector
We are advisors to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords.
We also generic viagra for sale online write for property websites, speak at property events (send an email to [email protected] to find out about our next event) and we are regularly quoted by the media.
Services for Private Landlords
We also help landlords and property investors by showing how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk to the investor.
AT OUR WEBSITE LETTINGFOCUS.COM:
HOME PAGE OF THIS BLOG click here: Blog
To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page = where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.
THE HOME PAGE OF OUR MAIN SITE
Four our main home page click here: http://www.LettingFocus.com
For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars
For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice
TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials
BUY “SUCCESSFUL PROPERTY LETTING”
Our book is the highest selling property book in the UK.
Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.
TO JOIN OUR FREE NEWSLETTER which goes to over 3,000 people (as at December 2011) just send an email to [email protected] – We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.
OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS click here: Landlords Resources
GET THE RSS FEED FOR THIS BLOG: Click Here
Copyright of Blog: David Lawrenson 2011 and 2012. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)
TWITTER PAGE For my thoughts on property, personal finance, plus other random things from sport, to 80s and 90s Indy Music, to tsunamis to musings on why people with Ipods walk in front of cars and my (usually) liberal “take” on politics please see our Twitter page.
LINK TO THIS BLOG OR TO OUR WEBSITE