1. Please introduce yourself. Say a bit about yourself and your company

I am Simon Gordon, Head of External Relations at the National Landlords Association. The NLA is the largest representative body for landlords in the UK with about 20,000 members. It aims to influence public policy, assist landlords with the professional running of their lettings business, and raise standards across the private-rented sector.

2. How did you first become involved in property?

I first became directly involved with property professionally about seven years ago when I became a consultant to the then Small Landlords Association, now the NLA. It was at a time when the private-rented sector was about to feel the impact of the proposals that went on to become the Housing Act 2004.

3. What do you think is your greatest achievement so far?

The greatest achievement is I think to demonstrate that landlords can come together and form a proper professional body. That may sound a bit vague but it is because there is a body like the NLA that we have been able to persuade politicians and other stakeholders that simply introducing more and more regulations is not the way to improve how the private-rented sector operates.

4. Do you or your company have any exciting plans for the future?

The NLA believes that local authorities are vital in efforts to drive out rogue operators, who bring good, professional landlords into disrepute by their behavior. The NLA is hoping to work closely with local authorities in raising standards. We are aware that over the next few years many local councils will be under severe financial pressure. We could assist with advice and expertise when they seek to frame their strategies on the private-rented sector.

5. What do you think are the greatest problems facing the private-rented sector today?

The problem of reputation still lies heavily across private landlords. That is changing but in some quarters prejudice against the very concept of being a landlord remains strong. We work hard to counteract that perception. The overwhelming majority of landlords are hard-working, decent folk who happen to have invested in property, many as a contribution to their pension. They need to be encouraged, rather than penalised by further regulation.

6. What do you think are the greatest opportunities?

The private-rented sector is going increasingly to be the main provider of new homes across the UK, as many people find they cannot afford to buy and have no chance of access to social housing. Lifestyle choices will increasingly mean buying a home later and in the meantime renting.

That gives the sector great power but it also places on it great responsibility. It will be under the spotlight and landlords, while facing more demand for the accommodation only they can provide, will be faced with potential tenants who are more choosy and aware of their rights. It will be great opportunity for the sector and a more diverse range of people will change private-rented accommodation and how it is perceived, hopefully for the better.

7. We have a new government. What would you like them to do for the private-rented sector?

There are a number of issues we would like to see addressed. The Conservatives pledged themselves to restore to tenants the option for their housing benefit or Local Housing Allowance to be paid direct to the landlord. We would like pledge redeemed as soon as possible as landlords have lost millions of pounds in unpaid rent when the benefit has not been passed on to them.

The last Government rushed through regulations on shared housing which the present government is amending. We welcome that move but hope the Government will keep a watchful eye on how some local authorities interpret the regulations.

The new Secretary of State, Eric Pickles, said at a CLG event that we should come up with ideas on what rules and regulations could be removed from the statute book. We hope this applies to our part of the housing market as, in conjunction with other stakeholders, we will be seeking to comb out a number of unnecessary measures that impede the flexible operation of the sector.

8. Do you use social media (blogs, twitter, LinkedIn etc)? What place do you think it has in the future of the property industry?

We do use the social media at the NLA. Like many other organisations we have felt the need to embrace it and while we may not have got it all right we believe this is a powerful tool that cannot be ignored. We live in an age of almost instant communication and if the sector is to keep up with developments there is a role for social media. This is especially true of a sector like ours where there are reputational issues to be addressed and, at times, inaccurate perceptions to be corrected.

9. What is the most important lesson you have learned during you time in property?

Working in the property field brings home to you even more that the process of renting is not something that you embark on in a careless way. With the potential financial gains go responsibilities, both legal and commercial. To make certain a lettings business is successful requires effort and hard work. It can be very stimulating and will increasingly perform a valuable service for society but as with much in life to achieve success you have to be prepared to make a commitment.

10. What advice would you have to someone thinking of entering the property industry today?

One of the most crucial things to understand is the need to have the right information. Anyone investing in property should investigate the market thoroughly in the area they intend to buy in. They should be full aware of the legal requirements that go with becoming a landlord. When taking on a tenant they should use the various tools now available to ensure the tenancy is going to work. Once the tenancy is under way both sides should communicate. A landlord/tenant relationship can so easily go wrong because of a break down in communication.

*****

Thank you Simon for your very perceptive and thoughtful comments.  Readers wishing to learn more about the National Landlords Association will find their web site here, and there is a short bio on Simon here.

1.   Please introduce yourself.  Say a bit about yourself and your company

My name is Lynsey Sweales and I am the Regional Representative for East of England with the National Landlords Association.  My role within the NLA is to be a point of contact to members within the region along with organising regular meetings and working with local authorities on housing and licensing issues.

2.  How did you first become involved in property?

In 2000 at the then sprightly age of 20 I had only just saved up and bought my first house to live in, at that time I was totally unaware of the rental market and how it operated.  I had been working for a marketing agency before I was head hunted by a buy to let mortgage broker to manage their IT and marketing systems.  It was then that the door to rental industry really opened my eyes and it wasn’t long before I became a landlord.

3.  What do you think is your greatest achievement so far?

I am a very driven person; on personal and business levels I have crammed a lot in to my life so far (you only live once as they say!).  I have helped grow and been a director of a national business, I’ve built up my portfolio of properties, I’ve done talks across the country to thousands of landlords to help educate them on how to manage their properties, look after their tenants and the longer term views of owning a portfolio.  I’ve been lucky enough to travel the world, raise money for charities and now run a number of successful businesses alongside my NLA work.  I’ve just re-read the question…. I can’t pick one achievement – life’s too short!

4.  Do you or your company have any exciting plans for the future?

Goodness, I’m always up to exciting things, never a dull day!  From an NLA point of view we have lots of exciting plans, just talking about the East of England region I’m busy planning lots of meetings across the region, for the latest meeting dates click here.  Our meetings are really important to landlords.  Being a landlord, especially a full time one can be a lonely place, our meetings not only provide a communication method to keep landlords up to date but also provide them with an arena to network and share best practices.

5.  What do you think are the greatest problems facing the private rented sector today?

Being landlord seems to have become wrapped in more red tape as the years go on.  With so many accidental landlords out there it is very easy to suddenly become stuck in a situation of which you don’t know which way to turn.  Sitting tenants, HMO licensing, it is a minefield, which is why landlord associations are so important to the sector.

6.  What do you think are the greatest opportunities?

In the last 12 months I’ve found tenants want to stay for longer, unsure of their job stability, wanting to keep their costs down more people are happier with the flexibility of renting.  By looking after your tenants you have the great opportunity of regular income for your properties.  The UK is one of the only countries in Europe that have had the ‘you must buy a home to live in rather than renting’ stigma.  With the limited range and restrictions of mortgages this stigma is slowly disappearing and we are becoming more European – with that comes demand for rental properties.

7.  We have a new government.  What would you like them to do for the private rented sector?

New government means change.  The next few years are going to be hard for the UK economy not just landlords, a review of the current legislation in place, including LHA would be a good start to help ease the red tape.

8.  Do you use social media (blogs, twitter, LinkedIn etc)?  What place do you think it has in the future of the property industry?

Social media is part of my everyday life in running my marketing business.  Social media provides updates, access to information and a way to communicate with people instantly.  The NLA tweet along with other key industry leaders like Rightmove and Sarah Beeny – any property news can be spread across the world wide web quicker than clicking the send button to an email.

9.  What is the most important lesson you have learned during your time in property?

Check your rents have been received every month – especially in more difficult times like we are currently experiencing.  Tenants are your key asset, they are living in your investment, look after them and they are likely to stay longer and more likely to look after your property.  I have a very good relationship with all my tenants, I ask them to be honest and if they have any problems to let me know straight away.

10.  What advice would you have to someone thinking of entering the property industry today?

Join a landlord association and use the services they give you access to – the advice line, weekly emails etc. – you have so much information to hand there is no way you could keep up to date in the industry any other way.  Although I’ve been a landlord for ten years I still use the advice line for queries I am not sure about.

*****
Thanks Lynsey. You can follow Lynsey on twitter @Ly52nsy and here NLA twitter account is @NLAeastofEng.

My Notable Property Person this week is Shona Davison, winner of the National Landlords Association Property Women Awards in 2009.

1. Please introduce yourself. Say a bit about yourself and your company

I’m Shona Davison, NLA property woman of the year 2009. As well as being a Sheffield landlady, I work as an analytical consultant building statistical models for credit risk or marketing departments.

2. How did you first become involved in property?

Nine years ago, I was a first time buyer, looking for a flat to buy in Wokingham, the area where I was living. After a long time of searching and one purchase falling through, I realised that my dream of home ownership was becoming increasingly unobtainable. The property market was booming so waiting and saving wasn’t an option. Prices were rising faster than my salary or savings.

I compromised by buying a buy to let in my home town of Sheffield, where prices were lower. The intention was to sell in a few years and use any profits to fund a property to live in. In the end, my boyfriend and I bought a house together so I never needed to sell my buy to let and that was the start of my career as a landlady.

3. What do you think is your greatest achievement so far?

I sold the relatively safe investment of my first buy to let flat and with the cash I released, I bought a much more risky property that needed a lot of work doing. I was stretching myself financially and had to work very long hours fitting the project around my full time job and planning my wedding. I felt a great sense of achievement once this project was finished, it was satisfying to bring a tired old property back to life and see three sets of tenants living there comfortably. The best part of being a landlady is when you go back to the properties once tenants have moved in and see them looking lived in and homely.

4. Do you or your company have any exciting plans for the future?

Currently no big property projects can be planned as I’m doing lots of hospital treatment to try and have a second baby. It took years of travelling up and down the motorway to have Pre-implantation Genetic Diagnosis (PGD) in London to get my first baby, who is now 1 year old. We are now starting the whole process again to try and get a second child. We have chosen to do PGD as I have a type of Muscular Dystrophy called Myotonic Dystrophy so having a baby naturally would mean there would be a 50% chance of the baby being born severely disabled.

As soon as PGD is successful (or we decide to give up) I will start thinking about the next property project. My husband and I would love to build ourselves a house to live in. I also want to expand my buy to let portfolio and would choose properties that need some work doing as I enjoy development projects.

5. What do you think are the greatest problems facing the private rented sector today?

Difficulty of obtaining credit is a big issue as it limits the possibility of expansion for many landlords. It is a more serious problem for those who need to remortgage but can’t because of lower amounts of equity or lower rents.

The amount of legislation has increased so much since I first became a landlady. It is essential to keep on top of it. I do this by being a member of the NLA, reading landlord websites and magazines and going to landlord meetings and conferences. The meetings are a good way of meeting other property investors, so you can learn from them.

6. What do you think are the greatest opportunities?

There are so many opportunities, that is why I love investing in property. Not only can you benefit from capital gains in the long run, you get the short term profit from the rent. I see my portfolio as my future pension, yet other than my first ever deposit, I have never paid any cash into it, only time and lots of hard work.

7. We have a general election coming up – what would you like to see in the winning parties manifesto as regards the private rented sector?

I’d like to see the idea of having a national landlord register scrapped. From my personal perspective a landlord register is an extra bit of legislation that may discourage new landlords from entering the market. Therefore as an established landlord who already does everything by the book it may be good for my business.

However, I can’t see how reduced competition and higher costs for landlords is good for the market as a whole, it will have a negative effect on tenant choice and that may feed into higher rents. I don’t believe it will help remove the bad landlords from the market as they already flout many laws so who is to say they won’t ignore this one too. If the register is going to be introduced as seems likely, then it needs to be enforced.

The use of planning laws for restricting HMOs is a bad idea. It will only lead to fewer landlords investing in HMOs which will push up rents for those people who use them.

8. Do you use social media (blogs, twitter, LinkedIn etc)? What place do you think it has in the future of the property industry?

Social media is a useful tool for marketing your business. I am a member of LinkedIn but don’t blog or use twitter. I use LinkedIn for my consultancy work.

9. What is the most important lesson you have learned during your time in property?

Property is not an easy investment. You have to be organised and flexible. It requires a lot of your time, which can be difficult to manage alongside a career and family, especially with the fluctuating volume of work it creates. Things such as tenants vacating and maintenance issues may all happen at once.

10. What advice would you have to someone thinking of entering the property industry today?

I would say “do it”! Be prepared for a lot of hard work and make sure you research all the legislation. I can’t stress enough how much you need the backing of an organisation such as the NLA if you are a novice, as you can then use their advice helpline.

You need to have a fairly laid back personality. If you are the kind of person who gets stressed when furniture gets scratched then you will not have an easy life as a landlord.

Don’t invest everything you have in property, it’s essential to have some savings set aside. They are necessary not only for unexpected repairs, but also for if a tenant stops paying their rent or other unexpected costs arise. Having cash in the bank gives you time to respond to the crisis.

*******

Thanks Shona, and good luck with the PGD. You are an inspriation to us all.

The NLA Property Women awards are a great idea and I hope lots of people apply for the 2010 awards – there is still time, but nominations close at 12 noon on Monday 12 April 2010. Anyone interested will find more information and the forms here.

As everyone involved in the private rented sector should be aware, tenancy deposits taken for assured shorthold tenancies now need to be protected with a government approved tenancy deposit scheme.  All schemes are required to provide a free arbitration service, in the event of a dispute regarding deductions from the deposit at the end of the tenancy.  The tenancy deposit regulations came into force in April 2007.

The authorised tenancy deposit scheme companies

We have three government authorised tenancy deposit companies and three methods of charging:

1. The DPS are free to everyone, their running costs are met from interest on the deposits they hold

2. My Deposits charge a joining fee, an annual membership fee, and a fee per deposit protected (which, for landlords, is cheaper if done online).  The basic fees for agents are more expensive, but agents can get significant discounts by pre purchasing blocks of protections

3. TDS (confusingly standing both for The Dispute Service and Tenancy Deposit Scheme) charge agents an annual flat fee which varies depending on the organisation regulating the agent and the number of tenancies registered at a specific date in the year.  There is a sliding scale of discounts for firms which have generated few or no disputes.  The fees for landlords are, we are told, calculated on an individual basis.  Only agents who are regulated by specified organisations (ARLA, NAEA, RICS, NALS and the Law Society) are permitted to be members.

Problems with TDS

As most people in the private rented sector are aware, there have been a number of high profile problems with the TDS model which has necessitated changes:

• In January 2009 they withdrew membership from unregulated members, a move apparently forced on them by their insurers who had taken some heavy knocks from unregulated agents going bust.

• Last December they were reported to be dramatically reducing the number of adjudicators used

• This year agents have been rocked by massive hikes in their annual charges.   This, we are told, is mainly due to the large number of disputes being generated, sometimes it seems  for ridiculously low sums.

Comments on the TDS fee increase

As can be imagined the fee increase has caused considerable hardship for many agents.  TDS somewhat glibly say on their site:

TDS was designed specifically for regulated agents and corporate landlords. We are confident that it remains the cheapest insured option for deposit protection for the majority of its members.

However many of their members may beg leave to differ. For example see some of the comments on this blog, such as those from:

• Kevin Burge, whose firm rent:cheltenham is a licensed ARLA agent which referred no disputes to arbitration, but which have had their annual fees increased by 23%, and who has big criticisms of the dispute system

• An anonymous commentator from a licensed ARLA firm, who reported that they had had 1 dispute for every 187 tenancies and have had their fee increased by over 1,000% (and say TDS refuse to say how this was calculated)

• Jonny from David Martin Estate Agents, who reported that his firm had about “350 deposits registered, 3 disputes and the fee is going from £583.00 to £3400.00″.  A charge effectively to them of £939 per dispute, and

• Natalie from Temples, a NALS agency, who reported that her firms fee had increased from £818  to £3206 based on 274 tenancies and 1 registered dispute.  She pointed out that the dispute was over a £150 cleaning bills which the tenant had insisted on challenging and which had been found in favour of the landlord (who was therefore justified in refusing to settle).  However it seems that her firms is now paying the price of some £2,388 for this!  Again she reports that TDS have failed to explain the reason for this 292% increase (based it would seem on the one dispute).

The fee increases have even been the subject of questions in Parliament as this exchange on 23 March shows.

Grant Shapps:

To ask the Secretary of State for Communities and Local Government whether his Department’s contracts with tenancy deposit scheme providers provide for it to intervene to prevent an increase in the level of fees charged by a provider.

Mr. Ian Austin: The Department has no role in the level of fees that the tenancy deposit scheme providers charge their members. Any increase is a commercial decision for the scheme providers.

What about moving to another tenancy deposit scheme?

Not surprisingly, many agents are now thinking of moving to one of the other two companies, although the commentators on my previous post were apprehensive about the cost of this and the extra administration.

However, in the last few days, My Deposits have reported  that Countrywide Residential Lettings, the UKs largest letting agent, has moved to using their service with effect from 1 April 2010.  Quite a coup!

MyDeposits now publish a special Q&A pdf download on their website setting out answers to frequently asked questions.  This is very interesting, particularly Q18.:

Unlike TDS, we require the main correspondence address of  the landlord (we do not accept ‘C/O’ addresses or PO Boxes) so that we can explain to them the principles of the legislation and what penalties they face if you, the agent, fail to protect the deposit or have your membership cancelled. If you do not wish us to contact your landlord for this purpose then we regret my|deposits is not suitable for your needs.

We undertake annual fraud and financial credit checks on all our agent members including the request for evidence of segregated client money accounts and balances within these accounts that match the level of deposit protection we provide. Failure to provide this evidence will invalidate membership.

It does seem, as they are not shy of stating, that My Deposits charging model is more robust than that used by TDS.  My Deposits were always intended to be the ‘landlords tenancy deposit company’ and state in their Q&A that at present that they have approximately 50,000 landlord members to 3,000 agent members.  However this may change.  Most letting agents have gone through a very tough time with the credit crunch and are not in a position to easily absorb cost increases of 23% let alone 200-1,000%!

The ‘free’ DPS service is often not favoured by agents, as they prefer to hold the deposits in house, partly because of the interest income, and partly because it is easier for them administratively.  However for those considering changing Kevin First of the DPS, comments

DPS does now offer bulk uploads – if you email the scheme we will send you the template. It’s very straightforward, you just download your tenancies into the template and send it back to us with your DPS Agent ID and we will upload the data into your account. Once you have transferred the cash all deposits will become active and deposit confirmations will be emailed to all parties – so there will be no gap in protection.

What are  your views?  Are you an agent with TDS?  How do the increases suffered by your company compare with those citied here?  Are you considering moving and if so will you go to My Deposits or the DPS?

(With thanks to everyone who commented on my previous post)

1. Please introduce yourself. Say a bit about yourself and your company

My name is David Salusbury and I am Chairman of the National Landlords Association (NLA). The NLA is the leading organisation for private-residential landlords. We campaign for the legitimate interests of landlords by seeking to influence decision-makers at all levels of government and by making landlords’ collective voice heard in the media. We also seek to raise standards in the private-rented sector while aiming to ensure landlords are aware of their statutory rights and responsibilities.

2. How did you first become involved in property?

Like many landlords, I inherited property from my mother who was a landlord on a small scale in Kingston-upon-Thames.

3. What do you think is your greatest achievement so far?

I would like to think that I have had some part in creating a national representative body for private landlords that is run professionally and recognised as an authentic contributor to the national housing debate. In that way, the NLA could have a positive influence on the development of the private-rented sector.

4. Do you or your company have any exciting plans for the future?

As part of our drive to raise standards we are developing a landlord accreditation scheme which will need no funding from local authorities or central government. We have plans for moving further towards creating one, unified voice for landlords at the national and – increasingly – at the European level.

5. What do you think are the greatest problems facing the private rented sector today?

The central issue is how to drive out the rogue landlords while avoiding making life even more difficult for the vast majority of landlords who are reputable and honest. We must also bring cohesion and consistency to the huge amount of regulation affecting the letting of private residential property. In the shorter term (hopefully) something must be done about the lack of mortgage finance which is crippling landlords’ ability to manage their portfolios.

6. What do you think are the greatest opportunities?

It is probably a truism that investing in property has for many years been, and remains, one of the few means of accumulating capital in Britain. Given the increasing importance of the private-rented sector, I would say to most people contemplating becoming a landlord ‘give it a go’, but ensure you are up-to-speed with all the requirements. It may not be rocket science, but it is a responsibility that shouldn’t be taken lightly!

7. We have a general election coming up – what would you like to see in the winning party’s manifesto as regards the private rented sector?

Before any more regulation there must be a commitment to a thorough review of existing legislation to see what is no longer needed. We would very much like to see the Government persuading local authorities to improve their expertise in the private-rented sector and to encourage local authorities to focus their enforcement activity on the rogue landlords within their area.

8. Do you use social media (blogs, twitter, LinkedIn etc)? What place do you think it has in the future of the property industry?

The NLA does, yes. We believe their importance should not be underestimated.

9. What is the most important lesson you have learned during your time in property?

That the business principles of courtesy, cooperation and cheerfulness are pretty good starting points for any activity. It’s not always easy, but one has to start somewhere.

10. What advice would you have to someone thinking of entering the property industry today?

Research, research, research. Once you’ve decided to take the plunge in letting residential property, join the NLA and make full use of the advice, information and support on offer. Then use the NLA’s benefits and services to the full to help you make a success of your lettings business. And do not underestimate the time and energy needed to be not just a good landlord but a great landlord.