Communities and Local Government CommitteeWritten evidence submitted by Mrs Judy Evans

I am a private landlord so I feel I must write to you about the inquiry you are going to conduct.

As I understand it about 80% of landlords are using their rented property to give an income in retirement and I am one of those. As a landlord who welcomes good practice and complies with all the regulations set for landlords, I must express how alarmed I am at the possibility of increased regulations, legislations, costs and rent capping.

I understand that rogue landlords must be dealt with, but I believe that more landlords today are honest and wiling to comply with the laws than not, so extreme regulation will only harm those trying to do the right thing, as the rogues will still probably find ways to flaunt the law. Especially as the traditional landlord has changed, with more people investing in a property to ensure they have an income in old age and those who are unable to sell their properties, renting them out.

Landlords who are complying, already have a difficult time, as the law always seems to favour the tenant, even when they are defaulting. At the moment, landlord costs, income taxes (and capital gains tax) eat away a large proportion of any rent. Recent introduction of deposit protection means additional costs each tenancy period to pay for the scheme and for inventory clerks when tenants move in and out (to ensure should there be a dispute that the scheme will deal fairly with the landlord). That’s at least £230 more in costs for just dealing with the deposit. If there was to be further licensing, to which councils will no doubt add a stiff fee for the licence and rent capping, plus additional standards to be complied with, then most small landlords would not be able to make a reasonable enough return on their investment and it would then not be worth remaining in this type of business.

At the moment, as with any commodity you purchase, supply and demand governs the cost of the product and with not enough housing to go round, this can make rents quite high. If rent capping happens, then this would not be a “free market” economy for that business sector and would not take into account the costs incurred by landlords who are trying to make a living themselves. The government does not cap the cost of goods and services in other industries, so why should they with private housing. Would this form of rent-capping even be lawful?

Instead, whoever is in power, should look at the bigger picture and rethink social housing. The private rental market is not the local council’s easy way to deal with social housing and should not be considered as such. Councils should be building more social housing, not selling it off. Also reviewing how tenants can transfer their tenancy to other family members, or stay in three bed houses when they only need one bed. That should be tackled and changed to help those on the housing register that actually need the homes gain the right level of housing, without it being blocked by those who don’t.

Although most landlords welcome social housing tenants they are worried about tenants not paying and causing damage. They wouldn’t be if this were not a known fact, it does happen a lot and landlords pick up most of the bills for this as it is rarely covered by the deposit. If a landlord who is trying to make a living can’t, because the tenant is not paying or causing large amounts of damage, then how is that fair either, maybe there should be more laws to protect landlords from rogue tenants.

If rents were paid direct to the landlord by the council and the council was responsible for paying damages on behalf of their tenants, just as they do when they let a council property to someone, then that would be fairer and encourage trust. If councils force private landlords to house council tenants through legislation, then they should at least be responsible for the consequences of non-payment and damage. The landlord would know that he will at least get paid and the damage would be taken care of financially.

I believe the tenancy agreements and length and security of tenure is also on the agenda. Please do consider the landlords as well as the tenant when making changes in the law. Landlords want tenants in their properties, but also want to protect their property from tenants gaining rights over it, other than those they have negotiated and paid for during the agreed tenancy, and that’s how it should be.

The landlord isn’t a villain to be punished by the Government for being in business. More levels of regulation and additional costs will in actual fact push rents up, as landlords pass the costs on to tenants in their rents. If there was rent capping as well then large numbers of landlords will have to leave the business, making less housing available to those who need to rent it. Then the Government will be in an even worse position than before.

Also why would it be fair to rent cap a whole sector of private business because the government has decided to reduce the social housing bill by reducing the amount of rent allowed to individuals. If the government want to reduce the rent allowed to those on benefits, then it has to make sure that it has provided council/gov run affordable housing, rather than highjack the private housing business.

I am sorry to write only from the prospective of a landlord, but we must have a voice in this. I am a small landlord with a tenant who has been with me for years and who pays below the market rent, which I am Ok with and which was agreed with me. I know this may not seem usual to you, but I am sure many small landlords like me (which make up a large portion of the private rental market) operate in a similar way. We just want a fair deal, same as the tenants.

I am one of an increasing number of people who now rent out a property having invested life savings and paying a mortgage to try and ensure enough income in old age. I want to be fair to my tenant and also comply with sensible and relevant laws, but if regulations and rules increase I will be forced out, as ever spiralling costs will make it impossible to make a reasonable return on my investment.

January 2013

Prepared 16th July 2013