Another week of news items. I suppose the ones which is going to annoy landlords the most is on
Tenancy Deposits and the Tenant Fees Bill
It has now been confirmed that the government has caved into the tenant organisation demands and will limit deposits to five weeks rent rather than six, for tenancies with a rent of £50,000 pa (or £4,166.66) or less.
The response from landlord and agent bodies is that this will result in landlords being less likely to take on people with pets or take a chance on tenants.
David Cox of Arla Propertymark said
Once again politicians are attacking the industry for their own purposes.
Tenancy deposits have worked perfectly well for over a decade, and there is no basis in research that these amendments are necessary.
This move will do nothing but push the most vulnerable in our society away from professional landlords and agents, and into the hands of rogue landlords and agents who will exploit them.
I suspect that so far as potentially destructive pets are concerned, landlords will probably charge a premium rent to take account of the extra wear and tear or ask for a guarantee.
I’m not sure how the bill treats guarantees or how it will affect paid guarantee services such as Housing Hand. Does anyone know?
Reforming the wild west
Lord Best recently reported on the progress of his working party on letting and estate agent reform.
Describing the current regulatory system as the ‘wild west’ he said his group is working in four areas:
- a single mandatory certificate for all agents and an end to the patchwork of different qualifications that currently exist
- establishing a single Code of Practice for everyone working in the industry that gathers all the current codes into one tool
- policing this by a single regulator covering all areas of the industry which “would have teeth” although the current ombudsman set-up would continue to handle complaints, along with a proactive body to prevent poor business behaviours, and
- bringing managing agents into the scope of his reforms to prevent abuse of leaseholders
Most of those sound sensible so long as they do not go over the top with excessive regulation, which could push many agents who will already have lost income under the Tenant Fees Bill, over the edge.
Local Authorities again
As we have often commented elsewhere on this blog, there is not a lot of point in giving Local Authorities enforcement powers if they don’t have the staff or the funding to use them.
This is illustrated by a freedom of information request by Simple Landlords Insurance to 90 local authorities which found that most of them have more or less lost the plot. Out of the 90 Councils surveyed
- 65 (72%) had no idea how many unlicensed HMOs there may be in their area,
- 29 (32%) had no idea how many properties should come in under the new regulatory scheme
- 31 (34%) had not prosecuted any landlords at all for infractions of existing rules in the past two years.
Richard Truman, head of operations at Simple Landlords Insurance, said
Earlier this year, we found that 85% of landlords we spoke to weren’t aware of the looming HMO regulations. A month on from their implementation, we wanted to find out exactly what those landlords are facing on the ground.
The changes may be well-meaning, but a failure to support local authorities to communicate about them and enforce them is bad news – for good landlords and for tenants.
Client Money Protection
It looks as if insurers are not going to be liable for all losses and that their liability will be capped. A government update saying
Allowing schemes to set a limit per individual claimant ensures that they are not required to pay out without limit.
It will ensure that more sophisticated large corporate landlords take responsibility for the control of client money held on their behalf.
David Smith, policy director for the RLA, said:
It is disappointing that the Government’s plans will not offer full protection and we urge ministers to think again or they will undermine confidence in the scheme.
Otherwise, we will encourage landlords to ensure that they do not put all their eggs in one basket and spread the risk.
Minimum Energy Efficiency
The government has published the responses to its survey on the minimum level of energy efficinecy saying
The majority of responses were supportive of the government’s key proposal to amend the domestic minimum standard regulations to introduce a capped landlord contribution element. However, there was some disagreement over the proposed level of the cap, and a number of other specific proposals, with a range of views expressed on these issues.
The government’s response will be published later.
Ombudsman warns Councils
A new report the Local Government and Social Care Ombudsman Michael King has told councils not to ‘throw out the rule book’ because of a lack of staff ‘when redesigning services in the face of budget and resource pressures.’
Michael King, said:
While I appreciate the challenges councils are dealing with, we cannot make concessions for failures attributed to budget pressures and must continue to hold authorities to account. Some of the pitfalls to avoid when redesigning services include ensuring changed services continue to meet statutory levels and timescales, or making sure discretionary powers are not replaced by a one-size fits all approach.’
The way councils have adapted and innovated in the face of huge challenges is to be admired. But the lesson from this report is for councils to get the basics right and not throw out the rule book when working under pressure. The core principles of good administration are more important than ever when undergoing major transformation.
- An interesting post on whether a deposit can be used for renewal fees
- TDS annual report shows that cleaning is the top disputed item
- If you want to watch the recent debate on the PRS you can do this here and there is a committee report here.
- Rogue landlord in Harrow faces jail if he fails to pay £1.5 million fine