Communities and Local Government CommitteeSupplementary written evidence submitted by the National Landlords Association

1. The National Landlords Association (NLA) exists to protect and promote the interests of private residential landlords.

2. With more than 20,000 individual landlords from around the United Kingdom and over 100 local authority associates, we provide a comprehensive range of benefits and services to our members and strive to raise standards in the private rented sector.

3. The NLA seeks a fair legislative and regulatory environment for the private rented sector while aiming to ensure that landlords are aware of their statutory rights and responsibilities.

4. The National Landlords Association (NLA) would like to thank the Select Committee for providing the opportunity to provide the additional evidence on the two issues arising from our oral evidence. We would also like to offer some further evidence on two other points discussed during the evidence session to the Committee, namely the appetite for longer tenancies and the proportion of landlords who might be considered as “rogue”.

Work with CRISIS PRS Access Development Programme

5. In oral evidence (Q388), Richard Lambert, NLA Chief Executive Officer, referred to work which the NLA had undertaken with Crisis on PRS access schemes. The Committee subsequently asked for further details on this.

6. Private renting access schemes were developed to help those tenants who find it particularly difficult to access the private rented sector to find housing. Rather than offering financial incentives, they focus on the practical steps that are required for the more challenging groups to get accommodation and the support that they require, by managing the risks to landlords and giving tenants the skills to manage their own independent tenancy.

7. The major obstacle to developing PRS Access Schemes is the difficulty obtaining start-up funding. DCLG is funding a three-year (2011–14) Private Rented Sector Access Development Programme through Crisis in an effort to tackle this. Under the programme, schemes apply for funding for their first-year. 25% of the total grant is held back until the scheme demonstrates that it has met its agreed targets in terms of the number of tenancies created and the number which have sustained beyond six months. The successful schemes can be offered a second year’s funding, set at a maximum of 75% of the initial grant to encourage them to seek matched funding elsewhere.

8. The NLA sits on the Programme’s selection panel, which selects the schemes to receive funding, alongside Crisis, DCLG, Homeless Link and the Ministry of Justice. There is a wider advisory panel which includes representation from the Greater London Authority and the National Treatment Agency.

9. The schemes have been successful in working with some of the more challenging people to house, for example, seeing great results in supporting rough sleepers into private rented accommodation and in housing former offenders. Schemes have also seen some results in housing under-35s in shared accommodation, although there is recognition that this takes considerably more time and resources both to set up and sustain. The following are examples from the first year’s funding round:

NOMAD in central Sheffield takes a holistic approach to housing young people by constantly reviewing their approach and providing more for clients such as an employment mentor, financial mentor and peer mentoring.

Derventio in Derby city includes PRS tenancies as one step in a full suite of housing provision and has an impressive commercial focus, using profitable activities to cross-subsidise its housing of people with assisted incomes.

Brighton Housing Trust has exceeds its first year targets in its Eastbourne prevention scheme despite working in a very competitive housing market.

Reigate and Redhill YMCA is finding tenancies in the suburbs of London in a highly effective partnership model.

Whitechapel Centre in Liverpool, which has an exceptional record for housing entrenched rough sleepers, created 43 tenancies and sustained 23 of these beyond six months (compared with a target of 30 and 16 respectively).

10. By May 2013, 153 schemes had received support from the Programme in all regions of England. 94 schemes are currently receiving funding. A total of 5,073 tenancies have been created so far, with an 89% sustainment level attained (tenancies sustained for at least six months, or which ended for positive reasons, eg a tenant finding a job in another area and the move being successfully managed). The Programme’s first year report noted that of the tenancies which were not sustained beyond six months, the majority ended for positive reasons. The main reasons for tenancies failing were abandonment and the tenant being taken into custody.

11. From the experience of the schemes funded during the first year of the Programme, Crisis identified several factors which were common to the most successful schemes. These are:

Knowing the local PRS market—researching the local housing market and the competition, preparing a viable operational model and making a compelling business case to local landlords.

Tenant training—pre-tenancy training and post tenancy support and mediation where required, tapering off as the tenant-landlord relationship becomes established.

Recruitment—having the right scheme worker is crucial, as the success and reputation of the schemes depends on the relationships established and maintained.

Reputation—a strong reputation with local landlords may have started in formal networks such as landlord forums, but landlords are increasingly recruited through word of mouth.

Flexibility—constantly applying others’ learning and experience to local markets, adapting their services and anticipating changes to the housing market over the coming years.

Clarity—being honest with both clients and landlords about what they offer so that expectations are managed and neither party is disappointed.

Sharing experience and learning from others—enthusiastically sharing learning with other schemes and seeking support from Crisis when required.

Staffing—These success factors are achieved through having effective staff—the core element the ADP pays for. The strongest staff are able to combine knowledge, experience and understanding of both landlords and potential tenants, to build the partnerships and have a focus on delivery whilst remaining flexible and able to adapt to changing circumstances.

12. Equally, schemes which struggled in their first year also had clear common elements, many of which are an inversion of the success factors:

A defensive and inward-looking culture with a reluctance to work with others, either local partners or Crisis Development Officers to improve services.

Reluctance to share and learn from others, failing to see connections between their situation and others’ and repeating common mistakes as a result.

Taking an inflexible approach, resulting in an inability to take advantage of new opportunities in a local market, such as a new referral route or a potential partner agency.

Lack of commercial awareness, making it difficult for schemes to give landlords confidence in their services and to attract additional, transitional funding streams.

Reliance on financial incentives, setting up unsustainable relationships with landlords, which will become less and less affordable for tenants as welfare cuts impact and wages stagnate.

Working with younger tenants, where difficulty procuring appropriate shared properties, and affordability and lack of renting experience intensify the risk of tenancy failure. Crisis has already worked with schemes to produce a toolkit on housing young people in the PRS and develop detailed guidance on the shared accommodation rate, but more work is needed to create and support models of effective working with young people in varying housing markets.

London: The London market presents a specific combination of problems resulting from high demand.

13. The report on the first year of the Programme is available on the Crisis website (http://www.crisis.org.uk/data/files/Private_Rented_Sector/PRS_Year1Report.pdf). The second annual report on the Programme will be published in July this year.

Redress within Accreditation Schemes

14. The Committee also asked if the NLA was aware of any accreditation schemes by which tenants can access redress if the landlord (rather than the letting agent) did not meet their obligations in the tenancy agreement, and whether tenants should be given access to redress in such cases rather than having to go to the courts.

15. The National Landlords Association’s accreditation scheme allows tenants to seek redress if the landlord does not meet their obligations in the tenancy agreement. If the NLA receives a complaint from a tenant, we will investigate, and if we find that the landlord has fallen short of the standards expected in our Code of Practice, will recommend the action that they should take to rectify the situation. We may also recommend appropriate further professional development work for the landlord to ensure that the problem does not recur. If the landlord does not respond to our complaint investigation, we can pass the case to an independent adjudicator. All NLA accredited landlords are aware of this, as it is detailed in the scheme rules and they agree in applying for NLA accreditation to adhere to the recommendations of the adjudication process. Similarly, any tenant wishing to take their case to the adjudicator must also agree that the adjudicator’s decision would be binding.

16. We are conscious that the NLA is not a regulatory body and membership is voluntary, so we have the power to persuade, but not to compel members to follow our recommendations. Our aim is to secure a fair and reasonable resolution to a dispute which is acceptable to both sides, and to work with the landlord to ensure that they have the skills and knowledge to prevent a recurrence of the issue. Nevertheless, if the landlord refused to accept or act on the decision of the complaint investigation, they would face removal from the accreditation scheme and potentially expulsion from membership of the NLA.

17. The National Landlords Association code of practice is attached as an Appendix.

18. We are aware that many council accreditation schemes offer redress for tenants. The NLA believes that a redress mechanism is essential for an accreditation scheme to be credible.

Other IssuesTenant Attitudes Towards Longer Tenancies

19. Richard Lambert also referred to the findings of the NLA’s tenant survey (Q361). It may be useful for the Committee to have further details.

20. The survey was conducted online in October 2012, using an independently sourced database of over 20,000 private tenants, acquired through a business information agency. The findings are based on the answers received from 589 respondents, and largely correlate with a previous survey undertaken in April 2012, which received over 2,000 responses from a database (again independently sourced) of 41,000 private tenants.

21. The October survey asked a series of questions exploring attitudes towards tenancies:

How long was your initial tenancy:

Six months—35.4%.

12 months—39.3%.

No fixed duration—18.5%.

24 months—4.5%.

Were you happy with this agreement length?

Yes—80%.

No—12%.

Unsure—7%.

Would you have preferred a longer tenancy?

Yes—39.4%.

No—45.4%.

Unsure—15.3%.

Have you ever asked a landlord for a longer tenancy?

Yes, and she/he agreed—19.1%.

Yes, and she/he refused—5.3%.

No, I’ve always been happy with the tenancy offered—51.0%.

No, I’ve never felt comfortable negotiating—14.4%.

Other—10.3%.

How long have you lived in your current home?

Less than six months—10.9%.

Seven to 12 months—9.3%.

13 months—two years—14.1%.

Two to four years—23.7%.

More than four years—41.9%.

Has your rent gone up in the last 12 months?

Yes—25%.

No—75%.

22. The survey also explored wider attitudes towards renting:

70% of respondents rent because they cannot afford to buy. However, 10% say that they do so because of the flexibility or absence of commitment, and 10% because they believe that they can rent a better property than they could afford to buy.

When asked about their long-term housing plans, 37% expected to remain in the private rented sector. 26% would look to buy a home and 16% hoped to obtain council or social housing.

89% see the property they rent as “their home”.

73% think they are secure in their home, but 50% worry about their landlord ending their tenancy and 48% do not feel they have control of their home.

65% say they are free to personalise their home.

57% enjoy the flexibility of renting.

63% do not see renting as a barrier to family life.

23. We believe that the survey findings indicate that for the majority of those living in the sector, private renting is much more stable and less uncertain than is often portrayed. They also suggests that the demand for longer tenancy terms is less clear-cut than some would argue. We believe that it strengthens the case for retaining the flexibility within the current tenure system to enable landlords respond to the changing needs of renters.

Rogue Landlords

24. Jacky Peacock of Brent Private Tenant’s Rights Group said in her oral evidence (Q55) that, based on her personal experience, she estimated that the percentage of rogue landlords was as high as 50%.

25. We asked in the October 2012 tenants’ survey:

“Have you ever rented from someone you considered to be a rogue landlord—ie, who has appeared to act in a criminal manner?”

12.9% of respondents considered that they had.

26. The survey form allowed those who responded that they had dealt with a rogue landlord to expand on the problems and the action they took. While we were told of some truly shocking behaviour, it appears that some of what was perceived as “rogue” behaviour was essentially poor-quality management.

27. The NLA would be happy to share further details of our surveys of landlords and tenants if the Committee would find them helpful.

May 2013

Prepared 16th July 2013