With an estimated 9 million tenants in the private rented sector (PRS), a housing shortage driving up prices, and many “generation renters” with no prospect of ever owning a home, the whole industry is embroiled in politics coming up to the general election in May 2015.
With accusations of retaliatory or revenge evictions, can the landlords develop a “fight back”?
One way is to follow the example of the Private Rented Sector Code of Practice introduced recently by Housing Minister Brandon Lewis MP.
According to the Residential Landlords Association (RLA) figures produced by the Department for Communities and Local Government (DCLG) reveal that of the over five million dwellings that were created between 1986 and 2012, 57% of these have been private homes to rent. Individual landlords have invested £50 billion a year in new homes to rent.
In 2013 the PRS overtook social housing provision in the UK, with a goodly proportion of private landlords now providing the vital community service of housing those tenants that would previously have been looked after by the social sector – local councils and housing associations.
This has inevitably led to problems as these social tenants are challenging for landlords to say the least: problems with rent arrears, dilapidations and anti-social behaviour are more prevalent in this sector and the inevitable bad publicity generated against the PRS has been mercilessly peddled in the media.
Housing tenure in the social sector is different to that in the PRS, for a very good reason: councils and housing institutions are big enough to carry these risks through the law of large numbers, private landlords are not.
The danger the PRS now faces is that campaigners and some politicians are happy to ignore these hard facts and are working to impose social housing tenure on the private landord. There can be only one result of this: as landlords begin to realise how they are hamstrung by overbearing regulation and restrictions they will vote with their feet; they will leave the sector in their droves.
There is precedent for this when social legislation reduced the PRS from 90% of housing provision in 1915 to 9% in 1990 – it took the best part of a century before deregulation in 1988 reversed this sad trend. Now, with the PRS back up to 18% and predicted to grow to 25% of the market in the next few years, there is a danger that this vital source of housing provision and market flexibility will simply be reversed once again.
Labour Party policy announced by Ed Milliband in the summer sent shock waves through the landlord community: the re-introduction of rent controls, compulsory long-term tenancies, restrictions on landlord evictions and a compulsory national register of landlords.
The Coalition Government on the other hand have taken a different tack: they have stated that they want reforms but on a voluntary basis designed to encourage the vast majority of good private landords and tackle the activities of the small minority of rogues who are getting the industry a bad name.
Speaking recently at the Property Investor Show in London’s Excel Centre, LandlordZONE® editor Tom Entwistle said:
“This problem has been particularly highlighted by the so called practice of “revenge” or “retaliatory” evictions, where tenants are supposedly thrown out on the street at the drop of a hat.
Given that the Protection from Eviction Act has criminal and civil legal consequences for any landlord attempting this, and legal evictions take up to 9 months in our overloaded courts, the whole thing appears to be largely fabricated for the political effect and the interests of some MPs and a group of social campaigning bodies.”
One important element of this has been the introduction of a Code of Conduct for private renting, a standard which good landlords largely follow now, but one which all landlords must be encouraged to follow if the PRS is to emerge from this hostile era in a growing and healthy state.
In his introduction to the code, Housing Minister Brandon Lewis MP says:
“We are committed to building a bigger and better private rented sector. The private rented sector provides valuable flexibility within the housing market, with increasing numbers of tenants choosing to rent as a matter of choice. We want to support it and see it grow.
“A key part of this is our commitment to minimising excessive regulation of the sector, which would force up rents and reduce choice for tenants. We have put in place measures to create greater choice, professional services and higher quality properties for tenants…
“…We know that the majority of tenants are satisfied with the performance of their landlords and that the majority of landlords and letting agents provide a good service. However, the small minority of rogues or criminals who exploit tenants drag the reputation of the sector down. We are cracking down on these landlords using a range of tools from legislation, funding and other support to local government.
“…That’s why, in October 2013, we asked the Royal Institution of Chartered Surveyors to work with other leading sector organisations to develop a Code of Practice.”
The Code which covers the activities of letting agents as well as those landlords who let their own properties, has been described as closest thing the industry has to a “how to” guide.
Although the code will introduce some changes that practitioners may not particularly like, it is thought by many in the industry to be a vital guide to follow if the industry is to stave off much more threatening legislation.
Tom Entwistle said:
“It is now up to the industry, the landlords and the letting agents, to up their game, to operate at a level of professionalism which will be beyond criticism. Tenants should never be evicted for simply requesting repairs to a property.
“It is also up to local authorities, using the ample powers they already have, to root out the rogues who all good landlords want to be shot of.”
The Private Rented Sector Code of Practice can be accessed here
— LandlordZONE (@LandlordZONE) October 17, 2014