Communities and Local Government CommitteeWritten evidence submitted by the Wrekin Landlords Association

I am the Chairman of a local Private Landlords Association and as such have a great insight into the issues that you are currently reviewing. We have constant feedback from our members and reports of the state of private rental in our area and the experiences that tenants in this sector are creating.

Firstly may I say that I am amazed that you are holding a review at this time as there is still much information available on this sector from the previous Rugg Review conducted only a couple of years ago which basically found that there was not a great deal of change required in this sector. Also, at a time when there is a state of flux in this sector with many planned changes hanging like the sword of Damocles over Private Landlords many of your findings will probably be irrelevant by the time your report is published and subsequent recommendations made. Most dramatic of these threats is the proposed Universal Credit which will change the face of payment of rent for benefit tenants beyond all recognition. Even the changes to the public rented sector will have a huge impact on the PRS too. It must be appreciated that there is a finite amount of properties of a specific size and likewise a finite number of families of specific given sizes. There is no given correlation between these two figures so someone somewhere ends up paying too much rent for the size of their family or becomes evicted. As benefit tenants have no choice in this matter it would appear that it will be working tenants who will fall victim to this awful situation. If you add to this the proposal that many Local Authorities are being forced to impose Council Tax penalties on private Landlords if their property becomes empty it is adding up to a recipe to drive the responsible Landlords out of the business altogether and their places to be taken by irresponsible operators who none of us want to see.

In our area the quality of the majority of Private Rented properties is excellent. There does exist the undesirable element, as you term rogue landlords, which have been gradually been forced out of the industry as more and more respectable operators have been offering superior quality housing to their tenants. This has been a natural process of service selection and would continue if decent Landlords were encouraged to make further investment rather than threatened and deterred from making their valuable contribution.

There also exists a natural level of rent control: At present some Local Authorities will pay Landlords direct if they set their rents below the LHA rate, this is an excellent system where everyone wins and is self perpetuating, no need for oppressive, expensive legislation just good common sense and listening to the needs of both parties. You refer to the interaction of housing benefit and rent, whilst the above is a perfect example of a symbiotic relationship this opportunity will soon be taken away from us when Universal Credits are introduced and there will be no local Housing Benefit Offices. So please do not waste time, money and resources in trying to include departments who will be non-existent in the near future.

An increase in regulation of landlords, will make the sector less attractive to the good Landlords and will allow for a proliferation of rogue landlords who openly flout the existing laws as they stand now so they are not likely to change with the introduction of even more legislation, it will just make it more difficult to enforce than at present. If you want to eliminate the undesirable element then enforce current legislation in accordance with HHSRS and assist local authorities who have the power but not the man power to find the guilty parties. Also, as outlined above, if you made it more favourable for GOOD landlords to flourish then this would eliminate the bad landlords by natural process.

Again with regard to the regulation of letting agents, there does already exist a proliferation of authoritative bodies who try to control these agents, however my experience has been that they will ultimately be self controlling by the service they offer and subsequently poor standard agents will become less successful whilst those offering good service will flourish.

The regulation of houses in multiple occupation (HMOs), is already quite sufficient as laid out the Housing Act of 2004 however, I feel that the local authorities are currently having difficulties in keeping abreast of this legislation as can be reflected in the low number of prosecutions in this sector. I would suggest there are very few areas where special licensing should be required and would probably not achieve much other than to drive out responsible Landlords leaving areas of total dereliction. The key to all these problems is to make an environment that encourages responsible landlords and makes it more difficult for the rogue operators to survive. In this way you have thousands of people working toward your goal for their own ends and none of them are being paid by the Government or the Taxpayer.

All the concerns about security of tenure etc will become self policing as most decent Landlords want a long uncomplicated tenancy, they don’t want to be changing tenants every few months, they don’t want voids and the necessity of redecorating after every Tenant, they want tenants to settle in to a community (much as the Government claims to want but are creating an environment that necessitates the breakup of communities).

You ask about local authorities and their duty to the homelessness. It is quite obvious that most local authorities are incapable of coping with the current number of homeless people however what concerns me more is the predicted number of homeless over the next three years due to all the above legislation it will be a catastrophe of unparalleled proportions unless something is done about it in time. When I say something must be done about it, that DOES NOT mean the introduction of yet more legislation it means less red tape and greater understanding of the only sector that offers any realistic solution to a growing problem.

If you think about it logically, a Landlord invests his money into a property in order to make return on that investment. He may make a small profit over and above his expenses when all is going well and he has no long voids, so he sets his rent at a level that is competitive in the local market place. To set it higher would mean that he will take much longer to find a tenant and therefore lose money. However, if he is forced to pay out more for licences and legislation, the process becomes more expensive he will find that he is not making a return from his investment. He has TWO choices; either he puts up the rent that he charges the tenant without increasing the service he offers or he is forced to sell the property and cease his involvement in the rental market. The ultimate scenario to this situation would be that the property could be bought by an unscrupulous landlord who would make a profit from the rent as he would offer next to no service and would avoid the expenses that the previous owner takes as a given responsibility.

January 2013

Prepared 16th July 2013