A special post from Ben Reeve Lewis who talks about his thoughts on what the future may bring.
I wrote at the end of my Newsround last Friday about a growing storm that I sense is coming for the Private Rented Sector.
Constructing those few paragraphs set me thinking all weekend and as Vic Reeves used to say I wouldn’t let it lie.
I don’t think it is valid to just say I can feel it in my water, I have to be able to offer more of an analysis if I’m going to commit myself to print. So let me explain.
I’m in a unique position. I’m a private tenant, a rogue landlord enforcement officer for a local authority, blogger on housing issues, general rent a gob for TV, radio and the broadsheets and in the past I’ve been a homeowner, a landlord, hell even a letting agent for a smidgen of time.
So I’m better placed than many to not only pick up early signs but also to make observations from a number of different angles. This is why I’m not in the simplistic camp of landlord bad/tenant good.
Despite my day job resulting in me seeing some god awful properties and criminal landlords I also see nightmare tenants and wrecked homes, so I am balanced in approach.
I can’t remember the last time I saw landlords and tenants so polarised in opinion.
Polarised opinions
The Rent Act 1977 was full on, landlord bad = tenant good, legislation.
What prompted its inception were genuine urban nightmares about Peter Rachman and films from the not so swinging end of the 60s like Cathy Come Home, which highlighted the plight of tenants with little legal protection.
Even so, It took a decade for those concerns to become legislation. Politicians are slow to respond unless forced to. Rent control first came in when the rent riots of the first world dumped on government’s doorstep big time and the whole mess became unavoidable.
Rent Act 1977 =Tenants 1: landlords 0:
Of course as is the case with all these things the pendulum simply swung the other way and the Housing Act 1988 was born with its Assured Shorthold Tenancies and automatic grounds for eviction through no fault of the tenant under the infamous Section 21.
Housing Act 1988 = Landlords 1: Tenants 0:
Recently Lisa Simon the head of housing group Carter Jonas commented
“Too much fag packet planning and not enough real thought going into all this regardless of which political party happens to be having another bright idea today.”
A comment spot on the money.
The whole housing nexus through homeownership, mortgages, private rentals, social housing is a complex web that is rarely understood by successive UK governments, continually divided over big picture political solutions, divorced from the daily reality of landlords and tenants.
While politicians oscillate between Labour’s hasty crowd pleasing policies for renting and the usual conservative “Bungs for the boys” approach on the other, the army of 9 million tenants in the UK are beginning to self organize against a backdrop of other factors.
That is what is really trending and what people should be paying attention to.
A crumbling of resolve on the political dialogue front
For quite a while even discussing any form of tinkering with the PRS was completely taboo. Why interfere when mortgages rates are at their lowest and rents at their highest? The rental market has ‘Never been so buoyant’ as the property press has repeatedly assured us all.
And yet, despite several years of steadfastly refusing to regulate letting agents government have at last not exactly caved in but certainly lost a roof slate or two, in creating mandatory membership of redress schemes in a few months time and paying attention to requested suggestions from local authority enforcement officers about extending and simplifying some powers to better tackle rogue operators.
This goes against Shapps announcement when he was housing minister that regulation of agents would interfere with competition.
Certainly a climb down from a couple of years back.
At the same time that Shapps was digging his heels in the Labour party announced that they had no plans to regulate letting either but have recently announced quite extensive and radical plans to overhaul the Private Rented Sector, should any of those 9 million tenants deem to vote their way next year.
Rogue landlord awareness
Shelter initially came up with this vague term 3 years ago. I was critical of it’s simplistic call to arms, still am to be honest, but by God it has gained some traction with the media.
Jon Snow was the first to kick the ball into the arena with a programme on Rogue landlords in the autumn of 2012 and many others have followed suit. Since then I must have taken part in 6 or 7 TV documentaries on it in the past 18 months, including Panorama and Channel 4 News.
I am also about to be filmed for a couple of others while enquiries from TV and radio researchers continue to come in requesting information on intended or already commissioned programmes.
I’ve gone 20 odd years without anyone giving a toss what is going on out there and now hardly a week goes by without an enquiry of some sort.
Local authorities sitting up and paying attention
Last year Kris Hopkins made available three million pounds for councils who could come up with decent schemes to tackle the problem.
Chump change in real terms but again it set people talking and loosened the debate.
Newham had already jumped in with both feet and decided to license all landlords which sent the debate stratospheric.
I don’t agree with their strategy but the high profile it garnered has embarrassed lots of other councils into showing that they too can do something. Also in the town halls of the land, meetings have been held at high levels deciding whether they too should go down the Newham road.
In council terms it is relatively pain free in a sense. You don’t have to bother yourself with different gradations of landlord behavior or property conditions, just license them all. Everyone will then complain equally but you can’t get accused of prejudice.
The only barrier is the political will of the elected members. Which means that councils that are more left leaning, if that term even retains any meaning these days, will tend to be in favour while councils who dress to the right will naturally aver, given its implications on free market trade.
Being a local authority enforcement officer I am in the position where I sit in on meetings, attend conferences and have to contribute to reports and I hear where councils are going with this stuff.
Landlords have no say in these decisions, which are down to the political persuasions of the particular authority, the resources they have available and the personal ambitions of the elected members who hold sway. Even the NLA are working with Newham to try and limit some of the damage.
Central government gives out money based on results. If your rogue landlord scheme prosecutes 100 landlords then the funding will reflect better than it does on a council who prosecutes 10.
As the Americans say “Do the math”.
Generation Rent
Around the same time that Shapps was playing King Canute the term Generation Rent was coined for the first time by a report conducted not by Shelter, but the Halifax Building Society who identified an entire generation of people who will be renting privately for their whole lives.
Just as the term ‘Rogue Landlord’ gained traction so did the label ‘Generation Rent’, adopted now by a younger, articulate, media savvy group of people who form the backbone of the growing number of tenant’s rights groups springing up all over the place.
The days of tenants rights groups being comprised of elderly disgruntled, socialist activists are gone, as are the days of a general tenant whinge-fest, easily defeated by a landlord community organized around the common flagpole of loan to value ratios and a ‘Buoyant rental market’ and supported by the NLA’s 3 floors of Southbank offices and a steadfast refusal of government to regulate the private rented sector, lest it interfere with competition.
Tessa recently gave us a handy in-depth analysis of the Generation Rent Manifesto.
I’m sure every landlord and tenant will have strong views on it. I know I do. I’m for it in the main but I think some of it will be difficult to achieve but again what it is doing is forcing conversations to be had which were heretical 18 months ago.
Landlords and agents across the land need to take heed of this because this is new stuff.
I’m not saying yay or nay, just pointing out what the debating ground is becoming and I don’t think that previous defences from landlords threatening to get out of the business or pass all regulation costs onto the tenants is going to help win the debate.
For 11 years under the Rent Act 1977 tenants made hay while the sun shined. For the past 25 years landlords have done the same thing under the Housing Act 1988.
Now the writing is on the wall, prompted by the political maneuverings of MPs mindful of the looming general election against the backdrop of a 9 million strong voter base with specific vested interests.
Personally I think a more balanced system of landlord and tenant rights is long overdue, but neither do I want to see the whole thing swing back the other way again in the time honoured fashion.
I’m not interested in winning the war as a tenant, I just want to see a fairer system for all and the Generation Rent Manifesto also calls for this. It’s now time to come into no-mans land and play football, not sit in trenches with your tin hat on.
“Despite my day job resulting in me seeing some god awful properties and criminal landlords I also see nightmare tenants and wrecked homes, so I am balanced in approach.”
A balanced view of the very bad cases in one part of London perhaps, but far from a balanced view of the market as a whole. Our firm has been managing thousands of tenancies across England, Wales and Scotland for 25 years and I would argue that I therefore have a far more balanced view of the market (albeit far less sensational and newsworthy). In my experience the vast majority of tenancies go off without a hitch, resulting in happy landlords and happy tenants.
I’m just not seeing the level of complaints and dissatisfaction from tenants that pressure groups and lobbyists are claiming. The market where I do business does not resemble a warzone or a battle ground as it is so often portrayed.
Pressure groups like Generation Rent are almost entirely London centric. There are only a couple of places outside of London where they have local groups.
Lobbyists like Penny Anderson and Alex Hilton et al. also tend to display an extreme and unreasonable hatred for landlords and agents. They will never actually be happy with any middle ground because they think property ownership for profit or investment is a crime and portray all private landlords as the scum of the earth.
Change may well be on the horizon but the problem is that if we start making policy based on these narrow views then we’re all in trouble.
“I’m just not seeing the level of complaints and dissatisfaction from tenants that pressure groups and lobbyists are claiming.”
I’m not seeing it either Jamie. What I am hearing is the vocal minority getting louder as a result of massive strides in social media. It is disproportionate to the silent majority.
83% of private renters were satisfied with their homes in the following survey:-
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/212496/EHS_HOUSEHOLDS_REPORT_2011-12.pdf
(NB This is a very reputable survey, not a Mickey Mouse one with loaded questions and misleading conclusions, commissioned to raise funds as part of an advertising campaign.)
That’s not to say there aren’t God awful properties and criminal landlords out there but all the ones I see are already blatantly flaunting the current laws.
-Massively increase the penalties against them, sure, I’m all for it. Make confiscation orders realistically achievable and profitable. And then ring fence that revenue to go after more of them.
But targeting good landlords isn’t the way forward.
Any changes needs to result in the increase of the 83% of satisfied private tenants not in appeasing the minority that shout loudest to the detriment of everyone else.
Good thought provoking post again Ben, BTW.
Thanks HBW. I never intended to comment on this. Its a two way argument that will run and run anyway and frankly I havent got the time, my life being taken up looking after a hyper-active autistic child, commonly known as a Cocker Spaniel pup.
The point of my post was to be deliberatly provocative, but not in a puerile way, just to say the changing debate that I am seeing going on.
Us council bods really do have these discussions about licensing and we do take into account changing trends in public opinion. Not just my council, I attend cross borough meetings where this license or dont license stuff forms the agenda.
Frontline types like me can provide input and suggestions but we dont make policy.
We have just been through a recent set of local elections. There is a new set of incumbents intent on stamping their mark on their period of office. These are the people who say yay or nay to licensing, regardless of what we tell them and what I set out in the piece above is what is being discussed.
I would like to see a legal setup that WORKS for HMOs, so that one bad tenant cannot destroy the life’s of all the other tenants while the landlord is powerless to do anything but wait for the S21/eviction process.
HMOs with shared kitchen and bathrooms have a lot more management issues then single lets; it just does not make sense to have the same legal setup for both.
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I have just brought a single let that is in a very poor state, the last landlord took advantage of a desperate tenant.
I have for the 2nd time had to spend my time waiting in the housing benefit office, just to get the direct payment transferred over to me.
I am therefore very inclined to leave any tenant that is on housing benefit to the ‘Rogue Landlords’, as my local council clearly does not want a landlord that has any choose in the matter to take them on.
Ben, we know from your previous articles that you would prefer councils to work with landlords not against them. But you’re right, the landscape is changing nevertheless.
It’s just a pity that it’s all based on a minority of extreme views and cases and that licencing in particular it is unlikely to have any impact on the worst landlords unless it is very expensive. Has the licencing scheme in Scotland stopped slum landlords? Catergorically no.
“Despite estimated annual running fees of just £300,000, the landlord registration scheme in Scotland is thought to have sucked £11.2m from private landlords and £5.2m from the Scottish public. Furthermore, only 100 landlords have been banned in the last half a decade, calling into doubt whether or not the scheme really does deter bad practice.”
That was a year or two ago, on top of the damning evaluation reports from Shelter in 2009 the Scottish government in 2011:
http://scotland.shelter.org.uk/__data/assets/pdf_file/0005/189734/Landlord_registration_3_years_on.pdf
http://www.scotland.gov.uk/Publications/2011/07/13111732/0
The latter report says that the scheme “has not removed the ‘worst’ landlords (only 7% of respondents thought it had removed the worst landlords).” and yet it is the really nasty landlords that lobbyists in England keep using as examples for why licencing is needed.
The only way you will remove bad landlords is by policing them and this costs money. That’s why the schemes in Newham etc. are being priced at £500-£700 per property. They may in the end be successful, but only because good landlords are now expected to pay for policing the sector.
Jamie there are an estimated 9 million families renting privately and a good few million of those will be in London, so I dont see it exactly as a minority and I also dont agree that asking for a fairer system makes you an extremist.
People calling for change arent bombing buses or blowing themselves up, merely producing manifestos and calling for debate.
However I am with you on the licensing thing.
Newham is similar in most of the comparators to the borough I work in and with what I am seeing of property conditions here through our multi-agency actions and looking at Newham’s latest statistics I seriously doubt that they are making a dent with their blanket licensing approach.
We are making good strides just with a focused, targeting approach, leaving the decent landlords alone