How to regulate private landlords

It was a very proud moment for me to hear the Labour party leader, Ed Miliband, mention me in his speech to the Fabian New Year Conference last Saturday, following my submission on the Your Britain website. I suggested how Labour should create policy which will deliver a private-rented sector which works positively for families in Britain.

Where I live, and across the country, there has never been a stronger demand for rented property, indeed here in the Medway Towns, there were 16,000 families on the waiting list for social housing the last time I checked. This small area is a microcosm of what is occurring nationally, it is not isolated and these issues are affecting people in towns and cities across the entire country.

At a time when social housing is in increasing demand, rental property supply is low, and home-ownership is impossible for many, regulation of private landlords is a major requirement with three areas in particular to be tackled.

Firstly, we need to offer protection from rogue landlords. Rogue landlords exploit those on social-housing waiting lists, in receipt of some housing benefit and without the large deposit, references or administrative fees required by landlords and letting agents. Often these landlords charge inflated rents knowing that there are very few housing options to those in that situation. The accommodation provided is regularly substandard, many with long-standing issues with basic living requirements such as heating and hot water, and many also failing to meet basic safety standards such as gas safety certificates. When residents do complain, these landlords often delay rectifying problems as long as possible, and when they are fixed the work is usually poor. Alarmingly some landlords threaten families with cancellation of their tenancies to escape from bringing properties to an acceptable standard which is possible due to lack of security in tenancy agreements. After the initial 6-month assured short-hold tenancy agreement with the tenant, which satisfies benefit eligibility criteria, the landlord often refuses to renew the tenancy, meaning it continues as a rolling contract with only the statutory notice period from tenant or landlord in place.

To adequately protect against rogue landlords, local authorities need to do a standardised survey before paying housing benefit on a property ensuring safety and decent basic living conditions for tenants, but also ensuring the taxpayer who are paying landlords via housing-benefit, gets value for money. This will force rogue landlords to raise the standard of their homes in order to let their properties. Regular follow-ups to guarantee standards are being maintained should also be made and local authorities should be sent renewal documents for private tenancies where housing benefit is being paid, to ensure the proper security is in place for both parties.

We need to have a national register where prospective tenants, letting agents and housing officers can check-up on landlords to ensure they operate to the right standards, protecting the tenant, but also the taxpayer to ensure the budget for housing benefit is not lining the pocket of the rogue landlord.

Secondly we need to increase supply and end discrimination against those in receipt of benefits. With high demand for privately rented homes even those with the deposit, admin fees, references and benefit-free affordability can struggle against competition. To those who do not fit these criteria, finding a home can be almost impossible which drives people towards the rogue landlord. The majority of properties I see advertised in small-ads state “no benefits or DSS” as there are landlords who, like many agencies, will not let property to people in receipt of housing benefit. This stereotypical discrimination is unfair to those hard-working but still low income families who rely on housing benefit to top-up what they can afford to pay in rent. Why should a low-paid worker, or indeed those genuinely unable to work, be discriminated against simply because they do not fit the agents view of what makes a perfect tenant? We do not tolerate any other form of discrimination in our society as a rule, so there needs to be legislative measures to ensure people have equal opportunity when it comes to obtaining a tenancy.

Thirdly we need to do something about letting agents and their charges. In his speech to the Fabian Society, Ed Miliband mentioned “stopping families being ripped off by letting agents”. While demand for rental property is ever increasing, so too, it seems, are the agents charges – primarily an administration/reservation fee, usually several hundred pounds plus VAT, which covers credit referencing and paperwork costs. Those self-employed also require a guarantor which incurs an additional charge. The charges made are vastly disproportionate to the physical costs incurred by the agent, and 100% non-refundable, even in the case of a failed credit check. The financial small print does not end there however. There are also annual renewal fees, charges for changes to your tenancy, and the final insult, a checking out fee at the end of the tenancy. Deposits are also often retained for a period of 28 days under a deposit protection scheme.

There must be a legislative code of practice for letting agents. As it stands, the lettings sector is under-regulated compared to estate agency. Part of this code should include a maximum fee scale and fees should be at least partly refundable for those who fail credit checks or cannot provide a guarantor. The code should also prevent discrimination towards benefit claimants as previously mentioned.

There are many important areas in this particular sector that need to be looked further into and it is important to include landlords, letting agents, housing officers, tenants, and private landlords into these discussions to help formulate a workable set of policy with which to move forward on and establish in our 2015 manifesto. But they key point is well put by Ed Miliband: “If we are going to build One Nation, people who rent their homes should have rights and protections as well”.