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Posted on March 4th 2015 by admin-movingin

Offending landlords should be deemed criminals not rogues, says government adviser

The first National Approved Letting Scheme conference in the north of England took place yesterday in York. Some 70 delegates attended the day-long event and heard presentations on a wide range of letting industry topics.

Sheila Drew Smith, chair of NALS, welcomed attendees and introduced Kate Faulkner who gave a talk entitled ‘The PRS: a 360 degree view’.

Kate dispelled several media myths surrounding the private rented sector including the fact that, far from ‘spiralling out of control’, rents are increasing at a modest 2% per annum, far lower than in the social sector.

With the majority of landlords owning just one letting property and most having little or no relevant experience or qualification, there is a great need for professional agents to help manage the letting process and for tenants and landlords to be educated about their rights and responsibilities.

Faulkner also highlighted that in many cases the profitable return on a rental property is derived from an increase in the capital value rather than the rental income.

She illustrated this by the example of a property with a 5.5% rental yield, 75% loan to value, and a 5.5% mortgage rate, would actually lose the landlord £500 per annum – but that an increase in the value could offset that loss.

It was interesting to see figures that demonstrated that renewals of existing tenancies result in little or no change to the rent level even though new tenancies might be achieving higher rents.

It is expected that by 2019 private renters will comprise 25% of the market (up from 20% now) and that schemes such as Build to Rent will have a significant effect on the quantity and type of property available in the rental market.

Lesley Fenton, a regional representative of the National Landlords Association, spoke on the Immigration Act and Right to Rent, with specific reference to the trials currently under way in the west midlands.

Apparently no real issues have yet been identified in the trials, which tends to support the view that the standard procedures adopted by most agents are already sufficient to meet the new identity checking regime that eventually will be rolled out across the country.

Ruth Hayes, a senior policy adviser at the Department for Communities and Local Government, outlined the policy priorities of central government in relation to the PRS.

There were nods of approval in the room when it became clear that there is a move to stop using the term ‘rogue landlord’ and instead to use the word ‘criminal’.

Although there is a stated aim of avoiding regulation whenever possible, there are many changes in progress that will result in greater transparency in regard to agent fees; an increase in housing supply; and promotion of consumer rights to complain.

Both Hayes and Faulkner strongly promoted the DCLG booklet ‘How to Rent’ as something that agents could and should make available to all tenants and landlords.

“It doesn’t read as if it was written by a civil servant,” said Hayes.

A discomforting question from the floor asked  Hayes why private landlords are exempt from redress scheme requirements and the response was that it was considered too difficult to enforce. There was also some scepticism from the floor about the willingness and ability of local authorities to enforce the redress scheme membership rules.

The work of the Ombudsman in relation to redress was outlined by John Baguley of Ombudsman Services: Property.

His research indicates that a complaining consumer tends not to be motivated by compensation. In order of importance they look first for an issue to be put right, an apology is the second most important item, and only in third place comes compensation.

A local authority view of the PRS came from Ruth Abbott who is Housing & Adaptations Manager at York City Council. She explained that each local authority has different approaches but that in York there is a very proactive and engaged process under way to improve the city housing stock and ensure good conditions for tenants.

In a top ten list of issues that can affect the health of tenants and thus lead to all sorts of consequential losses to society as a whole she identified: excess cold, falling on stairs, electrical hazards, fire, crowding and lack of space, damp and mould, falls on a level, falls between levels, hygiene, and entry by intruders.

York council will shortly be commissioning a report on how these issues affect the city’s housing stock. As a university city, there are many houses in multiple occupation, and a series of courses has been run to educate landlords about the rules governing letting this type of property. The course followed the recent successful prosecution of a non-compliant landlord that ended in a £10,000 fine.

Changes in legislation formed the basis of an immensely detailed and thorough presentation by Robert Bolwell of Dutton Gregory Solicitors.

In a packed series of slides, he gave very useful information in relation to Section 21 notices, case law, the Immigration Act 2014, the Deregulation Bill, Consumer Cancellation Rights, and a raft of more minor legislation that is likely to impact on agents and landlords in future.

The forthcoming Housing (Wales) Act 2014 will bring huge changes and may be a forerunner to wider changes in England. “In five years’ time you won’t recognise housing law in Wales,” he said.

Rounding up the day came Eye’s own columnist, Vanessa Warwick, who gave an impassioned talk on managing an online reputation. She stressed that it is essential for agents to engage with social media and to use negative comments from consumers as a positive benefit to enhance the agent’s standing by bringing clarity to issues that have been raised. Unless comments are outright defamatory, an agent should understand that people who take time to give attention to an issue online are ‘a commodity’ that can be used to advantage.

The day ended with Faulkner saying that delegates would be returning home “with a ton of information”.

NALS chief executive Isobel Thomson confirmed to Eye that the conference had been a great success and that it would return to the north in future.

She said: “The presentations were really informative. They reinforced what good agents do already and what is coming in legislation, and we shall definitely be coming back.”