Communities and Local Government CommitteeWritten evidence submitted by Nick Lane

1. Small Landlords and Impact on Supply

I am a private landlord with 25 years experience. For this time it has been my full time and only job. I do all my own maintenance and everything else related to the tenancies except the accounts and gas inspections. I do not employ an agency.

I consider myself successful as a landlord because I have good relationships with my Tenants, all my properties are always full and people stay for about two years or more. I mostly let one and two bedroom flats which I converted from older houses, raising standards of sound proofing and insulation etc. I now have about 60 people who look to me for a roof over their heads. When I add up the number of occupants of the houses I converted the total is five. The point I am trying to make is that independent builder/landlords are a valuable provider of accomodation because they are flexible, economical and responsive.

2. Quality

I think I am a good judge of what my tenants want. This is because with as little interference from outside as possible both parties to the agreement are free to make a contract from positions as equals. If the arrangement doesn’t suit either party then the agreement comes to an end, but the fact that this happens to less and less of an extent shows that I am providing what my tenants want. When a third party comes into the picture the equilibrium is disturbed, nobody gets what they want. The open market is the best way to ensure that a range of quality is on offer. There are some tenants to whom high quality is important, others want to save money and they will happily put up with lower standards of decoration and fixtures. It is not societies job to interfere with freedom of choice for tenants in a way we wouldn’t for owner occupiers.

3. Registration and Rogue Landlords

Regulation, registration, interference from outside agencies detracts from the ability of landlord and tenant to excercise choice in a free market. Why should tenants have their ability to make judgements about the sort of place they want to live be determined by someone elses preferences? We don’t do this for owner occupiers. If this path is taken, an industry will grow up around letting, and the person ending up paying will be the tenant. Don’t lets pretend otherwise, cost is the most important factor for the tenant.

Over the years I have experienced attempts by ousiders to the tenancy to interfere with the bargain I and my tenant freely entered into. I advise my tenants to resist this interference into their privacy. I say to them if they want the council to look after them to ask the council to house them. I tell them that the work involved costs money and they or taxpayers will end up paying. I ask them if they are happy with the service I provide, and say if not to ask me first and only if I am not providing them with proper service and value for money then seek outside help. So far the success in keeping these parasitic agencies out has been 100%. Tenants have a right to privacy in their homes which should be equal to owner occupiers.

I had a career in local government before I started looking after tenants. I know how more regulation will mean more bureaucracy and empire building by local agencies, and will not fulfill its purpose. Human nature will mean that when regulating or administering the registration of private rented sector that focus will be on the easy targets, not the rogue landlords.

No one seems to recognise the problem of rogue tenants. If landlords have to register there should be a corresponding register of tenants. Tenants benefit from our legal system far in excess of the rights to landlords. There are masses of rules available to authorities giving rights to tenants which could be enforced without the need for more legislation, and tenants themselves have the ability to pursue claims through the courts. The big difference is that cases proved against landlords are always going to get remedied, for the simple reason that landlords have an asset which can be levied against, the landlord will have to pay up. Try evicting a tenant for non payment of rent or breach of tenancy. You might get judgement but you would have to be very naive to think you will get recompensed for the tenant using your house free. In fact the law is useless in dealing with this. The tenant who stops paying should be quickly removed and the law provides for possession proceedings to start with two weeks notice once the tenant is two months in arrears. The court will take about a month to hear the matter, then if judgement is given the bailiffs take two more weeks, so if you’re lucky you lose four months rent. In fact that is not how it works in a growing number of cases because to slow down possession tenants and organisations like Shelter are able to claim a defence such as disrepair. The law bends over backwards to help in these cases handing out free time in your house for month after month, until 12 months arrears is not uncommon, and legal aid solicitors costing £250 an hour. If the law needs strengthening in the PRS it is this situation which should be addressed. Laws on the Tenants side are available and enforceable. The converse is not true.

4. Rent Controls

The reason rents are high is not the fault of landlords. When the market is open and free rents will stabilise at realistic levels. The problem with high rents is that lack of supply of finance has the double problem of putting first time buyers on hold, and preventing more landlords purchasing places to rent out. The solution is ease the money supply and build more houses.

Spending money administering the landlord tenant relationship may create work but it is useless work which will increase rent levels.

I sympathise with policy makers who want to reduce the cost of housing benefit. I don’t think it was a good idea to stop paying it to landlords. I once had a tenant on HB, the council took three months to sort out the payment, sent her a cheque and the whole lot went into the cash register of a casino. I had another who spent the money on other bills and ended up evicted, and a burden on the council as homeless. This is lunacy, and the reason why I don’t take tenants on HB, though I will let them stay if their circumstances change.

5. Agreements and Tenure

Every body understands that it is the ability of landlords to get their houses back that has made possible the increase of supply that has contributed to mobility of labour. I am not averse to increasing lengths of agreement as long as when things go wrong possession can be quickly given. The housing act on non payment of rent was supposed to give a speedy possession process but this has gone wrong when it can take a year to get possession if you follow ground 8. This needs to be addressed. Where else can a party hijack someones property with apparent immunity? Let possession be given quickly and let the wronged party prove damages in court. Successful claims will result in landlords paying up, as stated above the landlord has an asset which can be levied against. The reverse is not true. This is an inequality in the law which needs to be addressed.

6. LHAs using PRS to Discharge Duties to Homeless

I do not pretend to know about local authorities using PRS to discharge their homelessness obligations. What I do know is that it is wrong to use taxpayers money to put honest paying tenants at a disadvantage by housing people who get thrown out for not paying.

7. HMO Licensing and Regulation

I could have all my tenants subject to HMO regulation, but for me this would be the worst possible method of management due to interference between me and the tenant. I have converted my houses in a way that each flat exists as a separate entity by meticulous and expensive conversion with high levels of separation techniques for noise, fire, and heat insulation.

January 2013

Prepared 16th July 2013