The business models of criminal landlords explained – Part 1
Series Introduction:
I’m writing this short series as a guide to those landlords and professionals working in the PRS who might find it difficult to get their head around the vastly different way that the criminals view the market.
Decent Landlords
A normal landlord will see a property as their greatest investment, quite rightly to be cherished and nurtured as a retirement plan or something to leave their children, where tenants are carefully chosen and repairs are carried out diligently, as well as compliance with the numerous and complex laws that will keep their tenants safe and the landlord free from prosecution.
The other end of the scale
Criminal landlords and agents occupy a parallel universe, where they have no regard for laws, criminal sanctions or the welfare of their tenants. Often they don’t even care about the investment side of things, as they will commonly be exploiting somebody else’s property. Its all just about the money.
This is certainly the case in the four London boroughs that my outfit ‘Safer Renting’ operate in which is echoed by my experiences talking to officers in councils across Britain as a trainer.
The background
London is a bubble all of its own, being the biggest city with more people seeking accommodation against a climate of higher rents, where the current median is £1,400 against the national median of £675. As seen here at the Valuation Office Agency statistics
Benefit caps and benefit rent restrictions for those under 35 add to the mix, as does the Right to Rent and the needs of migrants, both documented and undocumented.
There is an army of shysters, crooks and general ne’er-do wells all too ready to exploit this vulnerable market, entirely dismissive of any sanctions that may be brought down on their heads by local authorities – who are solely responsible for policing the PRS at a time when enforced cuts mean that despite shiny new laws, there aren’t enough enforcement offices in place to even do the policing.
It’s a low-risk endeavour for the criminal landlord. But how does it work in practice? What are the mechanics? That’s what the series attempts to analyse and explain.
Lesson #1: Tenants, the crop to be harvested
Your average Generation Renter is not normally involved. By ‘Generation Renter’, I mean people articulate and savvy enough about their rights to not only spot a crook but also, able to stand up and fight back when the situation requires it. These people are not the target of your criminal landlord.
Targets include:
- Care-leavers,
- People not entitled to the full rate of HB under 35,
- Migrants, both legal and illegal,
- People with drink, drug or mental health problems,
- Trafficked people.
All these are ignorant of renting laws and tenant rights, scared or worn down and too familiar with being pushed around to raise any problems.
These aren’t the people who walk into Foxtons with £3,000 to lay down in rent in advance and deposits. These are the people who get referred to a landlord or agent by a personal contact, or source property through property portals or a card in a newsagent’s window.
No questions asked, no right to rent checks needed as long as its all cash-based and as long as the occupiers understand that repairs may not be very forthcoming and little things like fire safety are not even on the agenda.
Migrants suffer even if they do have a legal right to be here
Migrants are discouraged from seeking help from any form of authority, lest they are deported, even if they have legal status.
I have been out on countless occasions with Immigration police – and trust me, its intimidating stuff. Even more so if you come from a country when someone in a stab-vest and black combat gear knocking on your door means you never get seen again. Which is often the very reason for them being in the UK in the first place.
Everyone is generally warned off from involving the local authority in case they shut the property down and make everyone homeless. You often see clauses in contracts prohibiting occupants from allowing access to council staff.
Landlords and agents sometimes also provide spurious forms of cash in hand income, meaning any interference from enforcement officers trying to keep them safe could result in loss of money as well.
Rogue landlords avoid benefit claimants
Generally but not exclusively, these criminals avoid renting to people on benefits or being in the system in any way, to avoid creating intel links that might lead anyone to their door. This didn’t use to be the case even five years ago but the criminals are getting more clued up about maxing up the income whilst avoiding detection.
One particularly shameless exploiter managing agent responding to my questions about his control of ex-care leavers that his business model specialised in through supply of drugs and cash in hand work replied arrogantly:-
“Once I have them, I have them for life”
Guess what? He’s not a member of ARLA.
Migrants with status still struggle
Let’s get away from simplistic notions of illegal immigrants. Many documented migrants have a right to live and work in the UK but are prohibited from seeking public assistance such as housing advice and homelessness by the demands of their home office status. So when things go badly for them they are on their own.
At such times they rely quite understandably on their home country ex-pat peers. But often this includes the very landlords and agents who are exploiting their position and generating a fear of reaching out.
As is common knowledge many landlords have responded to the right to rent by avoiding letting properties to people who might cause them to face penalties for renting to people the Home Office decide do not hold sufficient status to rent privately.
This does nothing to address any perceived crisis of immigration but it does create another fruitful market for landlords and agents who don’t care about these sanctions. When you go out door knocking as I have to do, you can see where these people are ending up, the conditions they live in, and the landlords and agents who control their lives.
Those citizens not disbarred from assistance are entitled to advice but not full on homelessness duties, unless they have medical conditions that might render them officially ‘Vulnerable’.
People who lead what in housing terms we call “Chaotic lifestyles”. Worn down by life and history that erodes their resolve to fight their corner.
By way of example
I once went into a property to shut it down under six separate magistrates courts warrants. The conditions were dangerous and one teenager said to me:-
“I know the landlord is an idiot (not actually the word she used) and I know the property is a shit hole but this is the longest I’ve lived anywhere since I left care two years ago”
Sometimes council enforcement officers are actually the last people the tenants want to see and she was more keen to just stay put than stand up for her rights. Even if that meant being exploited and abused by the landlord.
In this case, she was actually dealing with a property manager running accommodation for an elderly owner who lived abroad – and who was completely oblivious to the purposes his property was being used for.
These people are the best cash crop for criminal landlords and agents.
Next time I will be explaining the financial model that underpins the cause of all this.
