Communities and Local Government CommitteeWritten evidence submitted by Oliver Cornes

Standards in the private rented sector need improving. There are too many landlords flouting the existing rules, and in particular not taking the health and safety of their tenants seriously.

As a landlord that does care about these things, it is very frustrating to have to compete against those that do not.

Any regulation must be light touch, especially considering the mass exodus of landlords from housing tenants in receipt of housing benefit. Any heavy-handed regulation will clearly reduce investment, both by existing service providers, and those considering entering the market.

To improve standards I would suggest that the following are necessary steps:

Housing benefit being paid in arrears and on two or four-weekly schedules is completely at odds with virtually every shorthold tenancy in the UK which is monthly with rent due in advance. Housing benefit should be paid monthly in advance, and (if tenant and landlord both agree) direct to the landlord. Unless these changes are made, less and less landlords will rent their properties to housing benefit tenants (however much they may wish to) as the risks are too great. I want to rent to benefit tenants, but the risks are enormous (I’ve lost a great deal of money trying) so I very rarely accept tenants in receipt of benefits. I am far from alone—the NLA can confirm survey figures from their members.

The government must bear in mind that many landlords (individual and corporate) and letting agents operate across multiple council areas. Although it is good to see some councils setting up licensing and accreditation schemes, if we allow it to continue on a per-council basis it increases the management and costs to landlords and agents who operate across boundaries—this mess already exists with the HMO legislation which is interpreted differently in different areas.

The government must set caps on the licensing charges council can levy. Any reasonable landlord understands that any council enforcement needs paying for, but if those charges look like profiteering on the part of the council, they will resist every which way they can, and that is no way to move ahead. The smart councils have already realised their best approach is to work WITH the GOOD landlords, charging reasonable fees, and using those costs to take action against rogues.

An optional license for landlords, available nationally, backed by a Government campaign to educate people to rent only from accredited, licensed landlords. The income can be used to monitor properties and landlords. This approach involves councils and government working WITH the good landlords to increase standards.

A national property management training and accreditation programme for landlords and agents with standard courseware (already created by landlord associations) and an exam, with a requirement to re-sit the exam, every five years. Landlords who do not reach the grade are required to use an agent that does. Certified members of the NLA, RLA, ARLA etc can be passported straight in.

Accreditation requires that landlords commit to offer a reasonable guarantee of a tenancy continuing for the long-term—if they ask the tenants to leave earlier than they indicated, a penalty fee is payable to the tenant. Eg if a landlord grants a one year tenancy and tells the landlord their intention is that the tenant can stay for ten years, then asking them to leave (without tenant fault) would incur a penalty after the first year. This solution works around the enormous problem that most mortgage lenders specifically prohibit landlords from granting long tenancies.

Speed up the eviction process—where tenants are at fault the landlord should be able to evict much more quickly. This benefits good tenants, and will make it easier for vulnerable people to find housing as the risks for landlords are lower. Currently it takes (from issuing a notice to bailiff eviction) 4–6 months to evict a tenant, which can have a disastrous impact on the landlord, and deprives the majority of sensible tenants from access to that property.

The eviction process has become so slow and unreliable that most professional landlords now use the section 8 process rather than the section 21 process. If the Government were to reduce the effectiveness of the section 21 process (in order to prove tenants with greater security) the side-effect will be to make it much harder for landlords to get rid of rogue tenants—the knock-on effect will be landlords being even less inclined to rent to anyone with any risk attached. It is very much in the interests of good tenants that rogue tenants are more effectively managed. At this time it’s quite normal and common for rogue tenants to not pay their rent and never be held to account or forced to pay (it’s virtually impossible to recover unpaid rent from someone with limited assets & income). We have created a culture and legal setup where rent is optional for rogue tenants, and the good tenants and landlords are the ones who suffer (plus the government, often whose LHA payments have not been used for paying rent).

Make non-payment of rent (especially from housing benefit) a criminal offence. It is very strange that if someone takes £5 of food paying in a supermarket they are arrested, but if they steal £5,000 from a landlord by not paying rent, the police are not involved at all (as they are in other countries).

Make electrical safety certificates a mandatory requirement every five years. It’s absurd that gas safety certificates are required, but electrical safety certificates are not.

If any rent caps or rent controls are put in place they MUST allow for the free market to continue moving over the long term. If limits on rental increases are deemed necessary (and remember any limits will reduce investment in housing) they should allow for above-inflationary rises, eg a cap of “inflation +5%”. It is reasonable tenants are protected from sudden, very large rises. If caps are fixed, eg no rises above inflation, then this creates a huge incentive for rogue landlords to evict current tenants in order to get new tenants on higher rate.

January 2013

Prepared 16th July 2013