Communities and Local Government CommitteeWritten evidence submitted by Rainham Residential Lettings

I have been in the lettings industry for over 16 years and currently run a small business in Kent covering low income areas. I am growing increasingly frustrated with misguided and irrelevant comments being made by public figures and the media in general. Too often a sledgehammer is used to crack a nut and as a letting agent we end up dealing with more and more legislation that in many cases does not assist in improving the market.

The term rogue landlords is bandied about far too often. Most Landlords in the UK adhere to all the legislative requirements and maintain their rental property to suitable standards. There are then a small minority who do not, though in most cases their failure is due to a squeeze on their financial circumstances rather than from an inherent desire to avoid paying for anything through greed.

There is a perception that any Landlord is “rich” and any tenant a poor defenceless at risk individual. No consideration is given to a Landlord in the case of a tenant failing to pay their rental jeopardising the Landlords ability to pay the mortgage. Indeed in the case of benefit tenants quite the opposite is true with local councils taking great satisfaction in telling tenants not to move out of a property until a court order is obtained.

Most of our Landlords are not earning an income from their rental properties and have to top-up any rental payment to hit the mortgage payment. They have taken the decision to invest in property rather than a pension. The media then suggests that these Landlords are greedy and rents should be reduced but supply no evidence to support this at all.

Landlords have become disillusioned with the lettings market and concerned about their financial future. Naturally the first area that costs are squeezed is that of Letting agents. While in London an agent may take between 14% to 17.5% for full management, other areas are lucky to make 10% if not less. When you look at the rental values being significantly less too, it is clear that agents outside of London are struggling to earn an income. This means that many agents rely on administration fees to make up the shortfall on their management fees. Rather than understand this we then see Shelter campaigning that such fees are unfair and Landlords must pay all costs, this being the same Landlords who apparently already charge too high rents and refuse to pay realistic fees to letting agents as it is. There is no cohesive thought to any of the proposals being made.

The lettings sector has been running perfectly well since the Housing Act brought in Assured Shorthold Tenancies. Where is the epidemic of problems that is bringing the requirement for wholesale change? Yes there are rogue landlords just as there are rogue traders, rogue car dealers and rogues in every industry. Any clear trend can be dealt with through legislation rather than as a knee jerk reaction to a largely groundless campaign.

If the government really did want to apply an unbreakable standard then agents and/or landlords must be qualified and regulated. Rents should be allowed to rise and fall depending on supply and demand. Assistance should be given to support investors increasing their holdings and national developers targeted with becoming large scale landlords allocating a % of any new stock to the rental market as a whole and not just to benefit claimants.

I believe that a forum should be held involving letting agents throughout the UK. We understand the market better than anyone and yet our opinion is disregarded. I personally would be delighted to add my experience to any such event.

January 2013

Prepared 16th July 2013