11:45 AM, 12th August 2013, About 11 years ago 42
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The alternatives to Landlord Licensing Schemes require joined up thinking, changes to data sharing protocols within local authorities and revised high level directives and strategies which must begin at Government level.
Perhaps the first question to ask is what is Landlord Licensing all about? Is it really about raising standards or is it more to do with raising funds?
Funding
If society as a whole desires that people should not be subjected to sub standard housing conditions then society as a whole must pay to enforce this (howsoever that might be done) whether the money is raised at a local level or centrally.
It is both unacceptable and wholly undemocratic that landlords should be singled out by Government, Councils and Local Authorities to pay stealth taxes badged as licensing fees on the pretence that the money will be used to fund enforcement related initiatives.
Costs associated with licensing schemes imposed on landlords are funded through increased rents. Neither landlords nor tenants want this, particularly as there is clear evidence (demonstrated in this article) that landlord licensing schemes have proven not to be an effective solution to problems in the Private Rented Sector.
Recycling of Court awarded penalties
The high costs associated with prosecuting criminal landlords is borne by Local Authorities, however, fines and penalties go to the treasury. If these funds were to be redirected to the prosecuting authorities this would assist funding of additional prosecutions and create incentives to bring more criminal landlords to task.
Improvements to PRS housing standards for benefits claimants
Our suggestion is that Local Authorities should check to ensure they only pay housing benefits to fit and proper landlords who provide decent accommodation. That would be what any responsible parent would do if paying for their offspring’s accommodation. In this case, the state is effectively in loco parentis. It is proposed that payment of Housing Benefits to landlords are suspended following unsatisfactory checks until such time as properties are brought up to acceptable standards. The proposed quid pro quo to landlords is direct payment of rent before the benefits cap is applied. The logic for direct payment of rent to landlords being the first payment is that shelter is one of the most basic requirements for human existence and should, therefore, be the first welfare benefit to be paid, not the last as it is now. Clearly this impacts significantly on the Universal credit proposals which have been widely contested by the PRS and Housing Charities alike.
The above would require inspections prior to new housing benefits being granted. This would also enable phasing in as opposed to having to asses every property within a defined timescale.
The enforcement teams currently in place within the public sector to tackle problems in the PRS are:-
Outside of the council are:-
Put them all together and you have quite an army. This is what a visiting team would need to do.
The problem is that it is only in sporadic circumstances that any of these teams and organisations talk to each other on an unofficial basis. Often they have different computer databases, so a person might be receiving a grant from one council team while another team is prosecuting them for fraud or failing to pay council tax. Councils do work in this way in other circumstances. MAPPA panels made up of homelessness workers, social workers, Police, probation officers, etc have been common place for years tackling those who are a danger to the community.
Tax Breaks for Landlords
Well thought out tax breaks could encourage private rented sector landlords to increase availability of quality housing which is let to recipients of benefits, thus increasing competition and driving out the racketeers who rely on intense demand in this segment of the private rented sector.
Fair and reasonable HMO licensing in Birmingham
Reasonable progress has been made in Birmingham to bring about a major change in the structure of their HMO licence fees. In a nutshell good landlords, who have become accredited through an education based scheme, are given a big discount on their licence fee. Good landlords who are members of recognised landlords associations are given a further discount. This has reduced the licence fee from £1,150 to £850 but is still questionable. The cost of these discounts is being recovered by charging the bad landlords. When the Local Authority has to trace and chase a landlord and force him to licence he will be charged the full amount without discounts, regardless of accreditation or landlords association membership and a one year licence is granted. At the end of the year the landlord has to pay the full fee again and is then granted a normal five year licence. This proposal was made by National Landlords Association and Birmingham City Council accepted the model on the basis that bad landlords who increase their enforcement costs should pay, not as happens in other areas. The same structure applies to the licence renewal.
Whilst we support the basic principals used in Birmingham we must point out that we do not support Additional Licencing and/or Selective Licencing. The requirement for compulsory licencing of any type of HMO is questionable based on our first set of suggestions.
Failed or failing Landlord Licensing Schemes
Landlord Licensing in Scotland has been in place for 7 years, Housing Charity Shelter said “We conclude that landlord registration is not yet fulfilling the expectations placed upon it; indeed, that it may not be able to do so.” in this report.
The Salford Landlord Licensing scheme was a failure admitted by the Local Authority but there are plans to extend it. Isn’t doing the same thing and expecting different results supposed to be a sign of madness? See this report.
The Oxford scheme has become a bit of a joke, check out this thread based on a freedom of information request to Oxford County Council.
Sources of information and how you can make a difference
Sources of information are linked.
This article has been compiled from a long discussion here on Property118.
If your local authority intends to introduce a new form of licensing these suggestions will give you options to propose alternative solutions. You may obtain a copy of this document as a PDF to present to your local MP and/or to submit in response to public consultations by completing the form below.
Why not write to your local MP (Member of Parliament) about this and ask him/her to raise the matter in the Houses of Parliament and with his/her Local Authorities?
If you do not have the contact details of your local MP, please see >>> http://findyourmp.parliament.uk/
Remember, increased licensing results in increased rents. Together we can make a difference.
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Mary Latham
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Sign Up20:35 PM, 12th August 2013, About 11 years ago
Reply to the comment left by "Ben Reeve-Lewis" at "12/08/2013 - 19:47":
You are before your time Ben, just wait five years and as you read the papers, from Barbados, you will see that they will all come around to your way of thinking. The PRS will be the major providers of homes in the UK by then and it will be private landlords who will no longer want to talk to local authorities - which is a great pity really.
"Be nice to people on your way up because you'll meet them on your way down".
Wilson Mizner
While you are on the plane read my book Ben - you will agree with most of it.
Follow me on Twitter@landlordtweets
My book, where I warn about the storm clouds that are gathering for landlords is here >>> http://www.amazon.co.uk/dp/1484855337
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Sign Up20:53 PM, 12th August 2013, About 11 years ago
LL don't need any more lettings agencies of any sort!!
What they need is the guarantee that if a tenant is in receipt of HB that the tenant passes ALL of it on in time and in full and makes up any shortfall out of other resources like other benefits!
It matters NOT a jot where they come from.
I would not regard any tenant coming from a social lettings agency any different from any other LA.
Full DD including LRS checks; RGI and 2 months rent as deposit and 1 months's rent in advance is what I require!
I don't think a social lettings agency would be supplying many tenant prospects to me!!?
However if the EVICTION laws were changed for immediate eviction if I required after 2 missed rent payments I would sign up and take tenant candidates from a social lettings agency....................................so again NO chance of that ever happening and so NO chance of me taking on such SLA tenants!!
It seems such a shame that all these PTB will NOT recognise that timely eviction in the event of rent arrears only is what is required.
Or rather it was mentioned but was not put down as the MOST IMPORTANT issue that LL want sorted.
Why the PTB pander to the behaviour of only 150000 wrongun tenants who were evicted last year for rent arrears; beats me!?
I bet hardly any of them bother to vote and yet they stick 2 fingers up to the govt; LL and councils.
This lot caused 440 million pounds loss of tax receipts to the Treasury from PRS LL last year and that is just the rent losses; it doesn't take into account all the thefts and damages those tenants caused!
Changing the eviction laws would transform the industry because it would only work for rent arrears.
All other issues may follow the existing protocols!
However govt will not take any action and things will become worse for HB tenants as LL shut up shop to HB tenants.
Social LA are NOT an answer; changing the eviction laws is
In Australia if you haven't paid your rent 2 weeks after it was due the police will remove you if that is what the LL wants!!
Consequently they don't have much of a rent arrears problem.............................................................funny that!!!??
Ben Reeve-Lewis
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Sign Up21:48 PM, 12th August 2013, About 11 years ago
Reply to the comment left by "Mary Latham" at "12/08/2013 - 20:35":
OK Mary I've just bought the book. I'll knock the price off of the air fair (As long as I dont fly Ryanair - I've just watched Dispatches and I'm not flying with them again)
Yes it is inevitable that the PRS will be the main provider. Even more reason for councils to come out from behind those bloody town hall walls and engage with what is actually going on and stop wittering on like Private Godfrey in Dad's Army, which is how I always think of them.
Councils actually have a phenomonal amount to contribute to it all, but it is always in a parochial, condescending way. The Localism Act freed up council to turn a profit from services offered by in meetings I attend attend people still wince at the very word.
I truly believe that councils could be at the heart of a vibrant, partnership PRS. Mind you to achieve it you would probably have to sack 90% of the staff, mainly middle managers hahaha
Sam Wong
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Sign Up18:46 PM, 13th August 2013, About 11 years ago
This is like arguing about whether we should have big government or bigger government ! More regulations or even more regulations !
Why not just leave it to market forces ? If the accommodation is bad, move. If the landlord is bad, move. Dont like it for whatever reason, move. Nobody is forcing anybody to stay where. Just as nobody is forcing anybody to shop where.
I have never known any government interference in the free market not to end up in tears - tax payers tears.
If we dont have social housing paid for with other people's money, the topic of this article wont even exist. Singapore doesnt have it. HK doesnt have it. Japan doesnt have it. You can hardly call these places 3rd world. We are so conditioned to giving the mana fish, all we are arguing about is how big a fish he should have. I think if we would stop giving him the fish, he might just learn how to fish.
And why should a perfectly profitable business be offered a tax break ? This is just another one of 'other peoples' money' attitude. Suffice for the government to get out of the way. If PRS cannot survive without a tax break, then let it die. Indeed,why should any business be given a tax break ? Another wind farm, anybody ?
Sub-standard accommodations exist for a reason - mostly because they are cheap and all that some people can afford. Dont knock it. If nobody wants it, then it wont survive. Let the free market do its job.
The best thing that any government can do is to stop piling cost upon cost on businesses for it is the last guy in the chain who will end up paying for it. In the PRS, it is the tenants. In everywhere else, it is us, the consumer. How can this be so difficult to understand ? Does the government care? Do the councils care ? All they are doing is just like any other business except that they have the law to be monopolies doing things that you and I would go to jail for and the enforcement power to milk us dry.
If we should lobby at all, we should lobby the government to get out of our life. Anything else is just tinkering.
Mark Alexander - Founder of Property118
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Sign Up18:53 PM, 13th August 2013, About 11 years ago
I respect the passion expressed in your post Sam, what about the other points raised in the article?
.
Sam Wong
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Sign Up19:01 PM, 13th August 2013, About 11 years ago
Sorry about the rant. Mark. Self restraint isnt my best point.
What other points ? Such as ?
Mark Alexander - Founder of Property118
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Sign Up19:07 PM, 13th August 2013, About 11 years ago
Don't apologise, I love to read a well considered, well written rant, even if I don't completely agree with it. I quite fancy a few tax breaks so please don't shout too loud will you LOL
It was the comments in the main article not written in blue which I'd also appreciate your thoughts on. Licensing? Alternatives?
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Anon
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Sign Up19:23 PM, 13th August 2013, About 11 years ago
Reply to the comment left by "sam " at "13/08/2013 - 18:46":
Move?
To where?
In case you were not aware, there is a shortage of over 450,000 properties in the UK and probably a lot more than that which are not up to spec.
Incentives are needed for the private sector to invest into improving more stock and buying new. Instead the government allows people to invest their pensions into Carribean hotel developments which will never be built but will they allow money in pension schemes to help solve the UK housing crisis? Oh no, that would be far too sensible wouldn't it?!!!
.
Sam Wong
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Sign Up23:13 PM, 13th August 2013, About 11 years ago
Anon
Move ? To where ?
Well the world is quite big and there are lots of properties to let and for sale.
All I am saying is : if you are unhappy enough where you are, for whatever reason, then move to another place where you can be less unhappy. If you cant find another place where you can be less unhappy, then where you are must be the best place for you. If having the best place for you is still not good enough, then you might want to consider changing your attitude to life.
You are quite right that I am not aware of a 450k shortage of properties in the UK although I have come across lots of varying nos of similar magnitude being bandied about. But I often wondered where are all these people (must be at least 1,000,000 ?) living now and how come house prices and rental yields are not higher than they are with such unsatisfied demands. Or share prices of builders are so volatile and of such low multiples. I suspect a small dose of common sense wont go amiss here.
'Incentive are needed for the private sector to invest into improving more stock and buying new'
I cant disagree with that except that more incentives will work as another booster to house prices which everybody (?) says is unaffordable already - although I dont think 'everybody' (?) knows what expensive is.
Another point : not that I would not welcome more incentives and whilst i cant speak for others, I think we already make quite enough money from our LL business. It most certainly made us a very comfortable living over the years. We also continually invest to maintain or improve (ie replace with modern equivalent) our properties - mainly to offset our income tax bills although it also happens to benefit our tenants and make our properties more desirable.
With or without incentives,we are also continually on the look out for opportunities to buy properties. Again, not that I would refuse more incentives, I find 'the lowest price for the best property' is often quite sufficient to rouse my enthusiasm. Shame theres not enough of these properties about and its such hard work looking for them.
Ian Ringrose
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Sign Up19:20 PM, 14th August 2013, About 11 years ago
Why not take it out of the hands of the Local Authorities?
We already have deposit protection organizations that are licensed by the government, way not make the landlords chosen DPS do the inspections….
I think tax breaks for landlords need looking at, as at present for example a landlord has to pay more council tax if they have a property empty while improving its standard. The tax system always changes how people act, so it should be designed to get people to act in a good way.