Faced with concerted media campaigns, most highly critical of the way landlords treat their tenants, there’s perhaps another side to the story which usually gets ignored in the popular press.
A new landlord study by Access Legal, a referral and support network run by legal firm Shoosmiths, found that 1 in 5 landlords fear they will be out of business within 12 months.
The Shoosmith report, which is based on interviews with 2,000 landlords using OnePoll, conducted in August 2015, claimed that UK landlords are losing around £9.9 billion* every year through unpaid rent and damage to their properties.
Concerted anti-landlord media campaigns, a flood of new regulations to comply with, and the final straw for many, the Summer Budget tax relief reductions, mean that many long established and responsible landlords are wondering if it’s all worth their trouble.
Here’s a sample of recent Guardian landlord – tenant stories:
- “Stuck with a terrible landlord? As if tenants have any other choice”
- “Britain’s housing system is an example of just how bad it can get for renters”
- “What’s behind the massive increase of renters in poverty?”
- “Renters may abandon a government that fails to stand up for their rights”
- “Even renters who work should be worried about housing benefit changes”
- “Stop talking about renting a home as though people have a choice”
- “Private landlords gain £26.7bn from UK taxpayer, says campaign group”
- “Generation rent v the landlords: ‘They can’t evict millions of us”
With 95% of landlords letting out between 1 and 4 properties** according to government figures, most are part-time landlords with around 50% of these managing their own properties. The increasing regulatory burden will mean that some good landlords will consider leaving. In future, in additional to the annual gas safety checks, landlords will need to:
- Ensure there is a current Energy Performance Certificate (EPC) for every letting
- Ensure that smoke and carbon monoxide (CO) detectors are in place and working
- Ensure that a letting meets planning use requirements (HMOs)
- Ensure that the letting is licensed by the local authority and pay the fees if required
- Check electrical systems and appliances
- Carry out legionella assessments
- Do immigration checks on prospective tenants taking care not to fall foul of the discrimination laws.
(It is recommended that all landlords and agents show how they are meeting their regulatory requirements by completing simple risk assessments)
According to Access Legal 90% of landlords polled felt they should not be responsible for immigration checks, though the new obligations are to be introduced nationally following a “right to rent” pilot scheme in the West Midlands since November 2014.
The main concerns of landlords highlighted in the report were increasing upkeep costs, the coming cuts to tax relief announced in the Budget, and almost half of those surveyed (46%) said tenants not paying rent, even after legal proceedings.
Seventy five percent of landlords expressed concerns about the safety of their money with letting agents and around 43% said they have stopped using agents to save money and avoid safety issues.
Access Legal say their survey indicates that 80% of landlords considered being a landlord as a “side job” and the top reasons given for becoming a landlord were:
- As a long term investment (63%)
- To provide extra income (47%)
- To top up retirements funds (35%)
- As a full time career (7%)
The five most common causes of damage to a property were:
- Broken appliances (41%)
- Damaged decorating (40%)
- Damaged carpets (37%)
- Lack of cleanliness (33.18%)
- Cigarette burns (22%)
Worst areas in the UK for rent arrears include:
Worst areas in the UK for property damage include:
The Access Legal study also found that around half (40%) of landlords have had rent arrears problems and one-fifth (20%) of landlords have suffered vandalism.
Access Legal has produced a handy infographic to summarise the results of their survey.
*Access Legal claim that much of their data has been worked out based on national data consisting of 1.5 million Landlords in the UK (ONS data) x the average cost of damage and rent arrears from that study.
**Private Landlords’ Survey 2010