Landlord Regulation Under Scrutiny – If you’re a landlord you probably feel like there’s quite enough regulation that you have to worry about at the moment. While a simple 2 bed property might be easy enough to run on a day-to-day basis, local and national regulation for HMOs can be an enormous burden for landlords. Couple this with things like council tax, landlord insurance and tenant management and it’s no surprise that many landlords find themselves having to give up other occupations to work full time.
However, the property market in the UK has been under considerable scrutiny lately, with rising prices and homelessness fuelling debate in the national press about whether landlords should be subjected to stronger laws concerning what they’re doing in the private rental sector. A recent report by the Residential Landlords Association (RLA) has also called for regulation to be reassessed in the UK, which we look at here in more detail:
Landlords Concerned Over Growing Burden
Current regulatory regimes put great strain on landlords to ensure they are following advice and rules. It makes sense that landlords are generally responsible for ensuring the safety and proper running of their properties, but increasingly landlords are finding the limits of this burdensome.
New regulations on energy efficiency and managing bad tenants are increasingly putting pressure on landlords to spend money and investigate problems with rental market regulators. On top of the fact that many landlords work other jobs and are required to submit self-assessment tax returns, many are deferred from investment by other commitments.
Eviction Rules Still Not Adequate
The RLA’s report claims that landlords are struggling to manage bad tenants because eviction laws are not yet up to speed with the rest of the property market. While the Assured Shorthold Tenancy was intended to make evictions easier for landlords, the eviction process remains costly, and it can still take around two months to evict even a tenant who has maliciously damaged a landlord’s property.
This is both expensive and time consuming for landlords to deal with, and is a factor which the report claims puts many landlords off investing further in the UK property market. It is one of the greatest fears of all landlords that a property will be damaged through tenants, and the lack of freedom to evict bad tenants is still a major issue.
Student ‘Slumlords’ Under Pressure
On the other hand, rental conditions in many properties are still below standard. Many student landlords, otherwise known as ‘slumlords’, are happy for students to reside in properties which do not meet basic living standards for low rent. In cities such as Birmingham, Exeter, Oxford and London, rents are unaffordable to students, and landlords are cashing in on lower income residents.
This evidence seems to require further regulation on what landlords can and cannot let to tenants. While there exists a minimum health and safety standard, it seems there is still a divergence between what is acceptable and what is legal. The RLA report calls for moderation in regulation, but certainly highlights the need to address these kinds of rental properties.
In general, it seems that regulation should be better aligned to accepted practices in the letting industry. While good landlords are deterred from making investments by burdensome regulation, the regulations still don’t catch out many landlords who are letting unsecure, unsafe properties to tenants. It’s certainly true that there is plenty of anecdotal evidence about landlords who allow tenants to live in poor, dangerous conditions.
Good regulation should, however, be no trouble for good landlords. Standard practices such as ensuring tenants are safe in their properties, providing the right contact information and using tenancy deposit protection schemes should all be second nature for good landlords. While many of these aspects of the job are covered by existing regulation, better aligned practices and theory would be considerably more effective in regulating the private rental sector.
While headline figures such as house prices and rental yields are still catching the attention of the press, the RLA report advises that poor regulation seems to be pushing up rents rather than decreasing them. Whether more or less regulation is required is unclear, but it’s certainly the case that regulatory reform in the private rental sector will need to be high on the agenda of whichever government ends up in power after the elections in 2015.