Communities and Local Government CommitteeWritten evidence submitted by Luke Gidney, Director of Let-Leeds and Let-York Letting Agencies

As a committee, it came to my attention that you are inviting submissions from interested parties in relation to the regulation of private rented housing and rent levels in this sector.

Your focus appears to be on:

the quality of private rented housing, and steps that can be taken to ensure that all housing in the sector is of an acceptable standard;

levels of rent within the private rented sector—including the possibility of rent control and the interaction between housing benefit and rents;

regulation of landlords, and steps that can be taken to deal with rogue landlords;

regulation of letting agents, including agents’ fees and charges;

the regulation of houses in multiple occupation (HMOs), including the operation of discretionary licensing schemes imposed by a local authority for a category of HMO in its area;

tenancy agreements and length and security of tenure; and

how local authorities are discharging their homelessness duty by being able to place homeless households in private sector housing.

I have written a response as Director of Let-Leeds and have covered the topics in the order you have outlined them above in a concise and brief manner.

I would like to make an open invitation to all committee members to spend a short time at Let-Leeds to see how things work on a day-to-day basis at a busy letting agent. I would be quite happy to employ any interested member of the Communities and Local Government Committee on our daily staff rate so they could spend time learning about and understanding the effort, skill and attention to detail that is required to ensure Let-Leeds (and other reputable letting agencies) are a genuine asset to both landlords and tenants.

This offer is not made lightly. If your members took us up on it then it would cost Let-Leeds a sizeable sum, but at Let-Leeds we have won awards and have been strong campaigners for regulation of the letting agency industry—and if our offer led to that becoming a reality we feel it would be money well spent in the interests of ourselves, landlords and tenants.

In answer to your points outlined above:

The quality of rented housing is a matter very much determined by the market. An increase in demand, due to the shortage of housing in certain popular areas has led to some lower quality properties on the market as landlords feel they do not have to keep to high standards of maintenance in order for properties to be let out. This is very much the case for landlords who choose to let to some housing benefit tenants. Due to such high demand, landlords are able to—in some instances—do the least possible in terms of maintenance to a property.

On the other hand, the student market in Leeds has had a shaky couple of years, and landlords in this market are having to refurbish houses and increase quality and specification to ensure they can let their property to good tenants.

On average, if tenants can afford and are prepared to pay a higher rent, the quality of the property will be good. However some tenants have been forced into renting inadequate and poorly maintained properties regardless of its condition, due to them being unable to afford growing rental demands.

This is certainly an area where we believe regulation has to be more strongly monitored and enforced. At Let-Leeds, we make sure that all properties we let are legally compliant and reach certain standards in terms of fire safety, general safety and security and adequate property maintenance. We ensure the property is in sound condition so that potential tenants can live there in comfort and safety.

We feel it is our duty to ensure such standards are maintained and we do this by checking the property at least once in every tenancy term. However, ensuring this occurs across the rental sector requires the involvement of local authorities, housing associations and tenant groups.

We have inherited properties from other agents in the past that certainly do not meet adequate standards or fire safety principles. We feel all letting agents have a duty of care to their tenants, and should complete a standardised fire safety/security and property maintenance checklist prior to moving tenants into a property.

Having dealt with some properties that pose a serious fire risk to tenants, we questioned the local authority on why more is not being done to ensure minimum standards are being complied with, and it seems that local authorities do not have the time or the resources to check poor quality housing. We feel letting agents should be responsible for ensuring that only quality properties are let to tenants. If a landlord wished to let their property privately, they should belong to one of the recognised landlord association schemes.

This point is a contentious one. The issue of rent control in relation to housing benefit claimants is not relevant to us as we do not handle their housing requirements.

At Let-Leeds, however, we believe in charging a rent that is fair for both landlord and tenant. Any attempt to control rents would be difficult to implement and may well cause problems for landlords and tenants. Our experience has shown that many young professionals now tend to house share but this is often because they cannot afford to rent a property on their own, let alone buy their first property.

At present, properties in popular areas with the best specification, room sizes and facilities command the highest rents, as it always has been. Cheaper properties are available in cheaper areas, as has always been the case. To control rents would run the risk of distorting the market.

We believe that rogue landlords can be punished appropriately if existing laws are enforced properly. As a letting agent, we see properties in all sorts of conditions. If we are asked to manage a property we feel does not meet certain standards we will ensure a strategic planned maintenance plan is put in place to ensure the property meets fire safety, security and maintenance standards. We insist that certain vitally important conditions are met prior to letting the property to a tenant.

As a professional letting agent, we have argued for a long time that regulation is overdue. Such regulation has to take the form of letting agents being licensed to carry out their functions. There are many reputable agents out there but there are also many who are not.

For this reason, we believe there should be:

A standardised code of practice that all letting agents sign up to, enforced by a governing body.

Industry-wide agreed terms and conditions for contracts between letting agents and landlords and tenants.

A requirement for each letting agent to create client accounts specifically for their clients’ revenues—with each account audited and signed off every six months by a bona fide accountant and submitted to an industry-wide governing body.

Licences issued to only those letting agents that meet the above conditions and who have not previously had bankruptcies within the lettings industry.

It is one of the few sectors that are in genuine need of more regulation, properly enforced.

HMO licensing, for me, has been a major success. The regulations governing licensing and discretionary licensing have been a major factor in driving up standards of both student housing and young professional house shares in Leeds. These minimum standards should be adopted by all landlords who rent out all types of properties. You would be amazed at how many properties are let out without adequate fire protection. The licensing work that has worked so well in the student markets could be re-used to ensure standards are adhered to in the rest of the private rental sector.

Tenancy agreements and length and security of tenure are of vital importance to both landlord and tenant. It would be ideal for the industry to adopt standard tenancy agreements—agreements that are fair and written in plain English. Whilst security of tenure is both important for landlords and tenants, we feel that tenants are keen to sign shorter tenancies with the option to stay on at the property if they decide to. One of the reasons why young people rent property rather than buy property is the flexibility this arrangement offers. Because of this, we feel there is no major requirement to adopt longer tenancies as we feel the standard ASTA works quite well.

This final point does not really apply to us as this is not an area of the property market that we are involved in.

If we can be of any further help or assistance, please do not hesitate to call us.

The offer of coming to spend time with us is a genuine one that could help give you a greater understanding of our area of work. It may even help publicise the work that you are undertaking into this important and fast-changing sector of housing.

January 2013

Prepared 16th July 2013