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Under the skin of the letting market

Here we share news and views on both the local letting market in & around Oxfordshire and all planned and recent legislation.

Commons Select Committee PRS – Educating tenants, HMOs and Licensing

The Commons Select Committee’s investigation into the Private Rental Sector has progressed further with another meeting on 13th May. In this meeting the Committee discussed supporting and educating tenants about their rights and housing benefits, longer tenancies, licensing and self regulation of letting agents, fines for criminal landlords and HMOs.

Witness Hearing –  Leeds Monday 13th May

First Session

  • David Shepherd, Assistant Director, Housing, Employment and Skills, Bradford Metropolitan District Council
  • Ruth Abbott, Housing Standards and Adaptations Manager, City of York Council
  • John Statham, Head of Housing Partnerships, Leeds City Council

There has been a significant growth in the PRS in recent years. Has that come about because new properties have been built specifically for the PRS, or is it properties that were in another tenure switching over to the PRS?

D.S: Property switched over into the PRS. We saw a lot of those coming through the buy-to-let mortgages that people took advantage of.

  • Lots of people didn’t know what to do with those properties or a business plan
  • Definitely a result of conversion, rather than building new properties

In regards for purpose-built student accommodation, is there an impact on other properties students rent? We have heard that even in the traditional PRS standards have been pushed up in student area.

D.S: New build properties in the student market have, by and large, have pushed standards in the market.

  • This has highlighted inconsistency between standards that can be enforced through the Housing Act and the HHSRS and building regulations, because there often is a difference between those
  • There would be a lower standard within building regulations; however, when you apply the higher standards within the Housing Act, you find there is a problem

What steps do you take, as an authority, to inform tenants of their rights and responsibilities?

J.S: We have a wide range of information and guidance that we publish through various forms.

  • We have a strong benefits advisory service
  • We also try to arrange for advice for them on their legal rights within whatever tenancy agreements they hold

R.A: We have a housing option service, for when somebody comes into the council to get advice about not only what their rights and responsibilities are, but what options are out there.

  • We also try to arrange for advice for them on their legal rights within whatever tenancy agreements they hold

S.D: We do have the bond guarantee scheme in place as well to enable people to move in the PRS without any obstruction to them.

Do you find the regulation of the PRS complex and difficult to interpret?

J.P: It is complex, but not that difficult to interpret.

  • We work with landlords to make sure that they understand why enforcement action would be taken and what they need to do to prevent that action from being taken
  • The joint work through the accreditation scheme or with the associations has helped greatly

In your view, is it a matter of making a few good tweaks to the regulation and legislation, or is it a question of having a complete overhaul and a new look at it?

D.S: I would suggest the former, rather than the latter. I prefer not to have new legislation introduced where its not necessary.

R.A: There is potentially a role for having a registration scheme for landlords so that we are able to provide that information and training. This should be mandatory.

It has been suggested to us that we need a method to book landlords who prove to be persistent offenders. Something like a fixed penalty with the council having the power to issue it and then take back the money to help cover their costs. Would any of you support this approach?

J.S: As long as they pay.

D.S: Unfortunately the courts are incredibly inconsistent when it comes to fines.

  • We do find that some judges will be prepared to issue quite strong and large fines to send a message, but others are not as consistent. That is difficult given the amount of work is put into every individual case

Do you think we need longer-term tenancies for families, who are increasingly occupying PRS properties?

R.A: That is a really difficult one to do because there is a need, as you say, with families in particular.

J.S: Yes, we need to look at it.

  • If people could have a longer tenancy, they would perhaps be more inclined to be part of the community, to look at the changing environmental issues within the community and to support the community
  • Landlords would argue that would then restrict their ability to get their property back if they needed to

Should we be insisting on licensing for letting agents?

R.A: Yes. The difficulty is that they all have different roles as well. Some of them just find tenants and some of them manage properties.

D.S: I would suggest that some regulatory provision for letting agents is absolutely essential, particularly at the lower end of the market

Second Session

  • Liam Burns, President, National Union of Students
  • Irfan Ahmed, Director, East Midlands Property Owners
  • Dr Richard Tyler, Co-ordinator, National HMO lobby

I think you are all basically in favour of some form of licensing or registration. Could you say how you think it ought to be done and what you think the benefits would be?

I.A: Licensing is seen as nothing more than a stealth on good landlords.

  • Landlords would be happy with registration. Licensing, on the other hand, because of the high fees involved, is an issue.

D.R.T: The lobby is certainly in favour of licensing and certainly in favour of registration

Liam, you have said that regulation of letting agents should be a priority for the Government. Could you tell me why you think it should be a priority, and what form should that regulation take, in terms of letting agents?

L.B: We would certainly like to see letting agents move far more under the same legal status as estate agents.

  • It would benefit the tenants and confidence in the market around the area
  • If landlord and agencies have acted in manner that can be seen as fraud and theft it is treated as a civil matter

Are you suggesting that membership of a self-regulating body should be compulsory for letting agents?

I.A: Yes. I am horrified that anyone could walk out of here and immediately become a letting agent without any form of training.

  • They should join an already existing association
  • It should involve training and accountability
  • Letting agents should publish their fees

L.B: We would like to see additional agency fees scrapped as they have done in Scotland.

  • Instead of front loading additional costs, spread them throughout the year in the rent
  • This means the money will be passed to the landlord through rent and become transparent

Are there particular safety or housing condition issues for houses in multiple occupation (HMO)?

L.B: Things like fire doors being in place, appropriate glazing, smoke detectors and carbon monoxide detectors. These would all be expected.

  • HMO legislation came about after quite tragic circumstances in which death was caused by poor health and safety standards within properties

Should these properties have a higher standard of protection against fire and all these kind of things than houses occupied by families?

D.R.T: I am not saying they should have a higher standard, but there should be mechanisms to make sure that standards are maintained.

Why should these properties be of a higher standard in terms of fire risk and safety than family accommodation?

L.B: In terms of final outcome, of course, they should not be; they should all be equally as high.

  • The question is whether you need additional resources to look into whether they are being kept to that standard.

Some argue that there are houses in multiple occupation that are not covered by the mandatory licensing scheme. Should it be extended to all houses in multiple occupation?

D.R.T: At the moment, it is a house with at least three storeys and at least five occupants. Our view was that it should be three storeys or five or more occupants.

  • By putting those two criteria together you narrow the scope a good deal
  • The size of an HMO does not have a bearing on the health and safety within it