Unfortunately, Britain’s housing crisis has left many renters critical of private-sector buy-to-let landlords. Property investors are often blamed for fuelling the housing boom. Many tenants have been priced out of the housing market in their local area, unable to afford increasing rents let alone consider buying, whilst property owners continue in search for higher profits.
However, the reality is that nowadays, buy-to-let landlords make up a fundamental part of Britain’s property market. We need landlords to invest in housing precisely because of the fact that people can no longer afford to buy their own homes. The number of private-sector landlords has been on the rise for the past decade and it is estimated that by 2021, the UK will need at least one million new rental properties in order to fuel demand.
In this context of the worsening housing crisis, the balance between profitability and being an ethical landlord is often called into question. Whilst almost all of the UK’s two million private landlords are fine and upstanding individuals who are simply looking to add to their income or supplement their retirement, there is often more that many landlords could do in order to help their tenants. Being an ethical landlord also comes with its benefits, such as:
- Happier tenants – and happiness is contagious
- Tenants stay longer – less hassle of finding new tenants
- Cost reduction – finding and placing new tenants costs money (checks, advertising, letting agency fees etc.), and property vacancy costs money
So here are some areas to reflect on in light of ethical rental practice…
Have you considered joining a trade body like the National Landlord’s Association (NLA)? The support that they offer to private sector landlords through comprehensive codes of practice, ethics and legislation is extremely beneficial in ensuring that you are up-to-date with any changes that may affect you or your tenants. Being in the know is essential to avoid disputes or illegal practice. It is also worth regularly checking your local authority’s standards and criteria to ensure regional compliance.
Be considerate when choosing tenants
Placing people above profitability is often difficult. It is a well-known fact that landlords discriminate against letting to benefit tenants for fear that they may struggle to pay rent. Some have gone so far as to clearly specify, “no DSS or housing benefit tenants should apply” in their advertisements. Roger Harding, head of policy, research and public affairs at Shelter believes that more landlords need to consider letting to people on housing benefit since “it’s often job loss or an illness that tip families into needing housing benefit for short periods to help get themselves back on their feet. Without a stable place to live, that is almost impossible”. Contrary to common judgement, tenants on benefits can actually be more reliable in the long-term. They can in fact be more likely to keep on top of rent payments and look after the condition of the property because they often lack alternate options if any problems should arise. The property firm, Rentify, offers a guide with further information on letting to tenants on benefits for landlords who are interested in this option.
Contracts and flexibility
Research from Shelter shows that over two thirds of tenants would like to stay longer than the usual six or 12 month Assured Shorthold Tenancies (ASTs) usually offered to them. Whilst it must be taken into consideration that certain mortgage lenders will not allow landlords to offer long-term ASTs, most landlords are not restricted in this way since they are mortgage-free. In particular, young families who are looking for stability whilst their children attend school in the local area are likely to prefer longer rental contracts. Landlords should take this into consideration wherever possible. If the tenant would prefer a longer contract, it could be worth checking with a mortgage provider regarding the maximum length of ASTs, so that these tenants could be accommodated.
Rent increases and letting fees
The decision to increase rent can be a sensitive issue to bring up with tenants, especially when they have been renting a property for a long period of time. Many property professionals, including Carolyn Uphill, chairman for the NLA, argue that continuously increasing rents is unethical. As properties become increasingly unaffordable, current tenants are left with no other option than to leave the property in search of cheaper alternatives. Therefore, when rent increases are necessary, it is suggested that landlords do not increase rents by more than inflation rates, so that current tenants would have the best possible chance of staying in their rented property if they so wished.
Property maintenance and good landlord-tenant relationships
Landlords should consider whether or not they would be comfortable living in any of their rental properties paying the current rent. If not, they should make any necessary improvements immediately before collecting that month’s rent from the tenants. Property owners, or respective managers, should also arrange regular visits with tenants in order to monitor the state of their properties and to ensure that damages and necessary repairs do not go unnoticed for longer periods of time. Many tenants complain of being ignored by their landlord or that they are unable to get in contact when they need to report issues within the property. This communication issue between landlords and tenants is something that Arthur Online’s property management app addresses directly. Our software recognises the importance of every party under the property umbrella, including property owners, property managers, letting agents, contractors and of course, the tenants themselves. The system enables communication and efficiency between tenants and their respective landlords, facilitating a smooth process of reporting and dealing with repair procedures.
If you’re interested in taking one simple step towards becoming a more ethical landlord by improving communication with your tenants and streamlining your property portfolio, try our 30-day free trail today by following the link below.