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Landlord Law Newsround #203

July 16, 2021 by Mark Savill

Some news items for you on a Friday

Sharp rise in complaints in annual report of Property Redress Scheme

The Property Redress Scheme (PRS) released their annual report this week, revealing that there has been a 27% rise of formal complaints against PRS members.

The PRS, for those who do not know, is a government backed redress scheme for landlords and letting agents. While for landlords, being part of a redress scheme is not mandatory, it is for letting agents.

While some of this rise can be attributed to a rise in membership, this rise might also be in part of the covid pandemic causing landlords and letting agents to let their standards drop. However, the head of the property redress scheme, Sean Hooker said: ‘considering the difficult year that consumers and property professionals have faced, I am encouraged by the fact that only a small percentage of our membership experienced a complaint against them’. Hooker also believes that the newly introduced tenancy mediation service they now offer will be able to keep tenants in homes.

Read the report found here

English Housing survey reveals that majority of tenants were happy with landlord and letting agent service

The English Housing Survey has been released for 2019/20, revealing that 83% of private renting tenants were satisfied with their current accommodation. This figure has been consistent for the best part of a decade but it is important to reflect with the pandemic in mind.

During a very tough year for tenants and landlords, the high level of private renting satisfaction by tenants is indicative of the sacrifices that many landlords have made in order to keep tenants in the property.

In the NRLA state of the sector report around 34% of respondent landlords said that their rental income had been negatively affected by the pandemic, a significant portion of this through rent arrears so this is an issue affecting a lot of landlords.

The fact that even with this loss, landlords were still able to keep a high-quality service for the majority of tenants speaks volumes of the sector and of landlords as a whole.

Government feasibility study re English database for landlords

This week the Ministry for Housing, Communities, and Local Government revealed that it is setting up a feasibility study to investigate if a national landlord database could be implemented in England.

Currently, the Government has limited information on landlords, often relying on local authority databases. This has allowed rogue landlords (and also ignorant landlords) to carry one without complying with regulations or legislation.

A database listing all landlords would make it a lot easier for Local Authorities and Government to track down non-compliant landlords (for example as regards HMO licensing and Safety regulations).

A national database has been in place in Wales since the Housing (Wales) Act 2014 came into force.  In Wales, all landlords must register with Rent Smart Wales before renting out their property as well as go through mandatory training if they want to manage the property.

While this does not automatically mean that a landlord database will be in place anytime soon, this can be seen as a statement of intent by the government that they are looking at a database as another enforcement tool against landlords who are not complying with the regulations.

The announcement stated:

The government wishes to explore the feasibility of introducing a national landlord register.in England Through a joint policy and digitally led approach, we would like to understand the different models available for pursuing solutions to our identified problems and to further understand the difficulties individuals face when renting, letting or enforcing property standards in the Private Rented Sector.

To inform this exploration of the problem, we would like a supplier to conduct user research, including sourcing participants, and potentially involving a survey.

Government figures reveal that rent is falling in real terms… but is that the full story?

Government figures have revealed that private rent has risen 1.2% from June 2020-21. However, this is below the inflation of housing costs, which rose 2.4% meaning that the income that landlords are generating has decreased in real terms.

Within the private rented sector, rent grew just 1.1% in England and 1.5% in Wales during the past year. While these figures should be taken with a pinch of salt as they can be attributed to the covid pandemic with landlords often being unable or unwilling to increase rent, it could also be shown to be indicative of the private rented sector as a whole.

However, with that being said, Letting agency Hampton this week revealed that their data showed that rent rose 8.5% last year with four out of the ten fastest months for rental growth over the last decade have been since the start of the pandemic. So although the government statistics are looking gloomy, there is some evidence that the private rented sector is being revived.

So what is the truth?

In Newsround 200, we discussed a report which examined the lower end of the private rented sector. In the report, it discussed the reasons why landlords are leaving the housing benefit market – although some of the issues can be applied to the entire property market. Regulatory burden for landlords – meaning that the law is more complicated as well as a perceived harsher environment for landlords – has caused some to leave the industry. It can be argued that it is these burdens for landlords which are causing the greatest loss of income for landlords, rather than rent. In the Hampton study also, it was revealed that there is 46% fewer homes on the market than at the same time 2 years ago.

So with a significant amount of landlords leaving the sector, demand is growing with the supply decreasing, meaning that landlords can charge an increased rent on their property. However, this may not counteract the increasing expenditure for some landlords in making sure their houses are compliant with the regulations that have come through in the past decade. So while rent will continue to rise, income gained by landlords may not rise proportionally.

Ben Beadle, chief executive of the National Residential Landlords Association said:

demand for privately rent homes continues to outstrip supply and without further efforts to meet that demand, rents will continue to rise. The government needs a strategy that properly recognises the importance of a thriving private rented sector in which tenants have genuine choices over where they rent.

Snippets

  • Welsh Government offering Fire Safety Review on Large Multi-Occupied buildings.
  • Mayor of London Sadiq Khan providing funds for boroughs to buy back ‘Righty to buy’ properties.
  • John Lewis creating 10,000 houses over the next decade to address housing shortage problem.
  • Rightmove claims that it has speeded up referencing times by 20%

Newsround will be back next week

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About Mark Savill

Mark works as an admin assistant at Landlord Law. He is a graduate of law from Aberystwyth University.

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