Most landlords are extremely wary when it comes to choosing which tenants live in their properties, mainly due to the fact that if the tenants fail to pay rent or damage the property they would have to rely on their landlord insurance in order to pay for damages or lost income. One landlord in Grimsby found this out the hard way after the tenants in one of his properties failed to pay him £1,200 in rent, and after they were evicted he found that they had left the property in what he termed a “disgusting” state.
Seventy-six year old Anthony Thomas has owned the property in Buller Street, Grimbsy, for the past eight years, and before these tenants moved in he said that he never had any problems. Unfortunately, in July 2011 he took on the new tenants and after they consistently failed to pay rent Mr Thomas he had no choice but to evict them. After they had left he went to look at the property and it was in such a bad state that he actually wrote to the Telegraph in order to warn other landlords. He said that he found used needles and a bottle of methadone in the house, and that a few days after the tenants had been evicted there was a break-in at the property.
Mr Thomas said: “The house was perfect when they moved in. Following the break-in, the police came round and had to hold their noses because the smell was so bad. There are bags of human excrement thrown all over the place and stuck in the drains. There is drug paraphernalia all over the house that needs disposing of. It would cost thousands to get the house back to a habitable state; I can’t afford it and I fear I don’t have a choice but to leave it in the state it is. I have taken up the stair carpet because it was covered in dog muck, but I just don’t have the heart to do it anymore. It is disgusting. I have considered selling the house, but no one will buy it like this.”
The National Landlords Association has warned landlords that there are precautions they should take before letting a property to tenants, with Chris Smith from the Association saying: “When taking on a new tenant the landlord is taking on a risk, so it is important to be satisfied that appropriate tenant checks have been carried out before granting a tenancy. Finding the right tenant is not an exact science, but a variety of tools are available, such as referencing, identity checks and credit checks, to help the landlord make an informed decision about prospective tenants.”
A controversial plan by a London council involving landlords has brought sharp criticism from many in the rents sector.
The decision by councillors in Newham, London to go ahead with their plan to license all private landlords in the borough has caused uproar with property investors with an interest in landlord insurance. They claim that up to 35,000 homes will be affected and that the council are “using a sledgehammer to crack a walnut”. David Salusbury, chief executive of the National Landlords Association (NLA), said “It is deeply disappointing that the London Borough of Newham has taken the decision to license all landlords in its area. The NLA realises that there are significant issues present in Newham, which the council is right to want to address, but selective licensing of landlords is designed to address distinct problems relating to housing management by targeting specific areas. Newham’s blanket approach goes beyond the intention of the legislation and has not gained the support of local landlords.”
It is thought some landlords could be fined up to £20,000 if they don’t register with the scheme but Newham Council, who completed a 10 week consultation period before deciding to press ahead were sure their policy will pay dividends. A spokesman previously said: “We want to ensure that private sector rented properties are well managed and meet a good standard. We also want to deal with the crime and anti-social behaviour that is sometimes associated with bad private sector rented housing. There are good landlords in Newham and we want to work with them. Unfortunately there are also some unscrupulous ones – which these proposals would target. We will never accept private sector tenants being directly exploited by landlords who force them to live in dangerous and unacceptable conditions.”
The NLA now fear that other councils will instigate blanket coverage that will have a negative effect on the sector.
Research from the NLA (National Landlords Association) claims that 54% of private landlords can no longer afford to rent a home to tenants who are in receipt of housing benefit. Due to the cuts to allowances, 70% claim they will not have any housing benefit tenants living in their properties that are covered with buy to let property insurance by 2015.
The research also showed that half of the landlords questioned believe Local Housing Allowance (LHA) cuts are making it unaffordable for them to rent to people on benefits, with tenants aged under 35 expected be hit the hardest by the changes. The LHA cuts have seen maximum rent benefit payments reduced to the 30th percentile of local average market rents rather than the previous 50th percentile. The age a tenant on benefits qualifies for more than a single room in a shared house has also been increased by ten years to 35 and this is forcing many into shared accommodation.
One member of the NLA said: “The reforms have completely ignored the question of supply, which is being damaged by other housing policies like Article 4 Directions. Where exactly is the shared housing meant to come from, to house these benefit claimants aged under 35? They are being forced into competition with relatively well-paid young graduates and students, and there is no sign of landlords increasing the number of HMOs to meet the increased demand unless they get help from the government.”
The National Landlords Association has also reported that, despite the fact that any private landlord who drops their rent, voluntarily qualifying for direct payments of LHA, only 25% of their members have been approached by the local council about this.
A leading landlord association is calling on the government to offer help to residential landlords just hours after the Coalition Government gave the green light to Social Landlords to up their rents.
The National Landlords Association (NLA) believes that as a result of the austerity measures announced in the Spending Review, the private rental sector is going to have to provide more housing over the next four years. Many experts believe that the new measures introduced to cover social housing may well create problems and the NLA has been quick to ask questions.
David Salusbury, chairman of the NLA, falls into this category, he says buy-to-let mortgages need to be more accessible to landlords wishing to add to their portfolio and buy landlord insurance. He envisages a shortfall of properties offered by social housing and that the private sector may well have to help out. He said “The government must now put in place a strategy to incentivise the growth of the private rented sector and support professional landlords in providing much-needed homes to rent.”
Many charities believe that the new government proposals whereby social landlords can now charge up to 80% of the market value may well have a negative effect on providing housing to people on low income’s but also feel the private sector can help in other ways.
Heads of many national charities supporting the homeless and low income families believe private landlords often charge too much rent and government regulation designed to root out rogue landlords is desperately needed. The Chief Executive of the Citizens Advice Bureau, Gillian Guy, described private sector rents as ‘expensive’.