I am pleased to introduce another guest post from fellow property blogger Roberta Ward of My Property Mentor. I am sure her comments will strike a chord with many landlords …
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As if it’s not bad enough trying to keep up with the BTL regulation tinkering from the current government, it’s set to get a whole lot worse if the plans they have go ahead.
Regulation tops private rented sector landlords’ list of fears for 2010, research from Paragon Mortgages has revealed.
HM Treasury (HMT) is currently consulting on whether the Financial Services Authority’s (FSA) should be extended to regulate the buy-to-let sector.
Personally I cannot think of anything worse. It means buy-to-let product availability will be even less which will increase the cost of mortgages even further. The impact for both residential property investors and tenants will be great.
Nearly six out of 10 landlords said that they were worried about the level of regulation required in relation to the running of their property business during the year.
Paragon said landlords in the private rented sector are already heavily regulated with an estimated 50 Acts of Parliament and 70 sets of regulations governing the sector, but more could be on the way. More is on the way after the Government concluded a consultation on the launch of a national mandatory registration scheme for landlords and is set to report its findings shortly.
Frankly, how ridiculous is that? 70 sets of regulations! And they want to add more which will have much wider reaching effects for the sector.
John Heron, Paragon Mortgages’ managing director, said:
“It is not surprising that regulation tops the list of landlords’ concerns for the year. They already have to comply with a myriad of regulations, which seem to be regularly added to or amended by the Government. Several new statutes have been introduced in recent years, including Energy Performance Certificates, tenancy deposit protection and Houses in Multiple Occupation licensing. Employing a good managing agent can help but individual landlords have ultimate responsibility to ensure that they are complying with the necessary rules and regulations.”
More Costs = Higher Rent
Any extra costs for the landlord are likely to be passed on to the tenant, which means higher rents and more people ending up on the social housing list. Landlords don’t like housing benefit tenants due to the other bit of legislation allowing them to receive the money direct instead of the landlord. This is legislation gone mad and a very short sighted move. The government is hell bent on rules, rules and more rules. They never follow the thought through to it’s natural end and potential consequences. Who advises the government on this stuff? Do they know anything at all about property? Makes you wonder doesn’t it.
Lending levels are already subdued and mortgage product availability seriously limited, landlords also expressed concerns about how they will fund property purchases in 2010, with 37 per cent stating this was a real danger. The buy-to-let sector is marked by a lack of competition, with just two lenders accounting for an estimated three quarters of current new business.
Add to all this the other factors; retaining tenants, finding tenants, tenant disputes and meeting mortgage payments. Who would want to be a landlord? If landlords start ditching their properties who will buy them all? Where will all those tenants live? How will the DSS find and pay for all the extra housing that will be needed?
Oh, and before I go, the government want to make the landlord register mandatory. Great.
Landlords provide a valuable service, it’s time the government woke up and realised just how much hangs on them staying in the market.
LikeRelated posts:
- Ecoweek at My Property Mentor Blog – Guest blog by Roberta Ward
- Tax Man in Hot Pursuit of Landlords – guest blog by Roberta Ward of My Property Mentor
- Roberta Ward – Notable Property Persons in their own words
- Dangers in Property Week at My Property Mentor Blog
- Government makes new announcements on the Private Rented Sector
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The Landlord Law Blog from Tessa Shepperson
I’m a housing/landlord & tenant solicitor and I would be the very first to say that the law and regulation on tenancies is a complex, difficult and confusing mess. Housing lawyers have been calling for reform for years, but the Law Commission’s reports and draft bills have been ignored.
That said, I can’t go with your view that regulation = unfair burden on landlords = higher rent, nor with your dismissal of registration. Bad landlords cause loss and pain, subject their tenants to assault and unlawful eviction, leave them in dangerous conditions which have resulted in injury and death. HMOs are often the worst.
While any landlord who follows regulations and good practice may feel affronted, the private letting industry has resisted all suggestions of self regulation. So, unless you consider the bad landlords simply to be a necessary cost that their tenants must bear for the good of the letting industry as a whole, what is your alternative to regulation?
NL´s last blog ..New server – all done
I should perhaps make it clear that the views in this post are Roberta’s rather than mine. However I know that many landlords will agree with her.
Hi Tessa – yes, I appreciated that these were Roberta’s views and I was directing my comment at her rather than you. I appreciate many landlords will agree with her. But much of the law and regulation concerns things that the landlord should be doing anyway (gas checks, fire safety etc.) so can’t really be considered to be a burden…
NL´s last blog ..New server – all done
Well of course we are all entitled to our opinion. However, you may want to consider that there are plenty of bad tenants too-probably way in excess of the bad landlords. Im not against regulation per se, Im against the pointless tinkering which is not thought through to the logical ends or how it might work in practice. Often it causes confusion for the landlord as to what they have to comply with.
You did not say whether you are just a solicitor or whether you are also a landlord, but I assume from your reply that you are not a landlord, so therefore your view may be somewhat jaundiced perhaps by only seeing the legal aspects on a daily basis rather than at grass roots level of being a landlord.
What about the thousands of landlords who rent out in good faith only to be ripped off for thousands of pounds themselves- and they still have to find the mortgage payments!
We run HMOs and I can tell you their standard of living is very high-much better than in regular rented in most cases, so I dont think you can tar all HMOs with that brush in particular.
There are good and bad on both sides and blanket ill thought out regulation is not usually the answer. Personally I would prefer it if they scrapped the system for something simpler that everyone could get their head around.