Information for Landlords, the Summer 2012 Newsletter
Here you can find our Summer Newsletter for private landlords and others with an interest in the private rented sector.
It was first published on 1st July 2012 and was sent to the 1,840 landlords, 1,300 suppliers to the private rented sector and 800 journalists on our mailing list at that time.
If you would like to receive our latest, Autumn Newsletter, you’ll need to send us an email. Our newsletters are still free and are currently sent out on a quarterly basis. Our email address is:
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Summer 2012 Newsletter
For the third quarter running, there has been no new legislation at a national level, just the start of the new Tenancy Deposit Scheme in Scotland. But of more interest to landlords is the trend for local authorities to increasingly impose new restrictions on the private rented sector in their own patches.
Selective Licensing
Selective Licensing is increasingly being used by some local authorities as a tool to try to get private landlords to deal with what the councils perceive is a problem of antisocial behaviour by tenants and rogue behaviour by a small minority of operators who let unsafe and dangerous properties. (You may have read of the stories about illegal constructs in gardens – the so called “sheds with beds” and “walk in freezers”).
Newham Borough in London is leading the march here, and plans are now well advanced to bring in the first scheme that will encompass the whole of a borough. (Previous schemes just covered parts of boroughs where there was known to be a problem).
Local landlords in Newham claim no real evidence has been put forward by the council to show that antisocial behaviour is connected to properties in the private rented sector. And some argue that they have not been consulted properly nor had their alternative suggestions considered.
The landlords may be right, but for us at LettingFocus, the main issue would seem to be whether the Newham case points to a failure of the existing rules and regulations.
The Old Solutions Don’t Work
Newham appear to be saying that the existing powers to prosecute the small number of rogue operators in their midst don’t work, that the legal processes take too long and are too expensive and that the fines meted out to the guilty are derisory . And this is why they are setting up a “borough wide licensing solution”.
The license will involve a fee to be levied on ALL landlords, which no doubt will be passed on, at least in large part, in higher rents. Once it starts, the new scheme will mean that any landlord without a license who lets a property in Newham is immediately criminalised.
According to Newham, this will better enable them to close down the rogue operators of the “sheds with beds”. We hope that it will work as it would be quite a shame for a council to spend millions on a new bureaucracy in which all landlords are forced to take part, only to find the council is still getting stuck spending lots of resources and in court endlessly trying to enforce against rogue operators.
But if Newham are right and the “non-licensing remedies” available to deal with the “sheds with beds” merchants didn’t work, then we should surely be looking to review why.
For the Government, Eric Pickles says local authorities have the powers and resources available to deal with sheds with beds. Newham are clearly saying the powers and resources are not effective.
Surely we need a review to find out who has got it right – Mr. Pickles or Newham Council.
More Reports on the Private Rented Sector
Back in the day – well from 1988 to 2003 to be precise – when the private rented sector was still small, you could wait for years for a report that mentioned the sector at all.
Today, reports come along at the rate of one or two a month. In the second week of June alone, the thinkers at the Joseph Rowntree Foundations and the Institute of Public Policy Research both produced major housing reports in which key recommendations concerned the private rented sector.
Usually these worthy reports draw heavily on the experience of those from a SOCIAL housing background, which I guess is not surprising as this is the background and training of most senior people in housing at town halls and charities (despite the fact that the number of households in the private rented sector is now larger than that in housing associations and council housing combined). Sometimes, the reports suffer from a bit of a “group think” mentality. (As an example of this, readers of my blog will know of my criticisms of the London Assembly report “Bleak Houses”).
But we are pleased to see that the likes of the Joseph Rowntree Foundation and Shelter are listening to us at LettingFocus and have adopted our observation that private landlords often cannot issue longer term tenancies because their lenders usually will not let them.
It’s good for our ideas and thinking to bear fruit. However, we need to see more senior people with experience of the private rented sector at the town halls, in central government especially in the Communities and Local Government department and in the housing charities.
Talking to Themselves
And it is not just me saying this, Colin Wiles, a blogger at Inside Housing said something similar in a piece called “Talking to Ourselves” at the Inside Housing blog. I recommend it.
Should the chatterings of public servants and think tanks matter to landlords?
Yes it should because the more the private rented sector is in the media and dissected in reports, the more likely there will be more (or different) regulations and more (or different) taxes.
Should it matter to other folk?
Yes, because there is no good reason why London boroughs should move a single person out of their home town because of changes to housing benefits and there is also no good reason why they are paying out millions to house people in bed and breakfast accommodation either.
The private rented sector, if used properly by the town halls could go a long way to solving both these problems. The fact that the private rented sector is not being used intelligently is wrong – and it causes real pain for poor people that a lack of understanding of how to engage with the PRS means that many possible solutions are being overlooked.
Meanwhile In Lending Land
In June, I was a key note speaker at the Council of Mortgage Lenders (CML) 9th Annual Buy to Let Conference.
The lenders are increasingly listening to non-lenders like me and are becoming more innovative in their approach to lending for buy to let. At LettingFocus we do a lot of work advising lenders and it is refreshing to see lenders looking up from their desks, thinking about designing better buy to let mortgage products and services and driving business forward.
I am sure we will continue to see more innovation from lenders coming through on buy to let mortgages – a line of business which remains very profitable for the savvy lender who understands the market.
Outlook
Overall, with rents rising, low interest rates, and yet another ¼ million annual increase in he UK population (mainly from inward net migration) the sector has a lot going for it and despite the threat of local and national regulation, being a private landlord is still a rewarding business.
Scroll down for other useful links……and google “David Lawrenson” to see where I am being quoted and join in on any online debates. And don’t forget, a wide range of other matters affecting the PRS are discussed at our blog posts, which can be found at www.LettingFocus.com/blogs
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