Criminal landlords, ‘rip off’ letting agent fees and longer tenancies all took centre stage in a House of Commons debate on Wednesday.
Labour MPs led by shadow housing minister Jack Dromey called for a compulsory national register of private landlords, a clampdown on obscure letting agents’ fees, and tenants to be given secure, longer-term tenancies.
They pointed to the example of the London borough of Newham in pioneering a national register of landlords – which Dromey described as giving an “admirable lead”.
During the lengthy debate, the Labour MP for Leicester West, Liz Kendall, said she had done a mystery shopping exercise on letting agent fees. She said these were unfair, and one agent was charging a fee for what, she said, she didn’t know.
Another MP, Rosie Cooper, using parliamentary privilege, named a lettings agency in Lancashire for its ‘appalling’ practice of charging tenants £200 for a credit check, which tenants then failed.
She said both agents and landlords needed to be regulated.
The opposition debate centred on a motion tabled by Labour, which noted “with concern the lack of protection afforded to tenants and landlords by the unregulated lettings market”.
Labour said that the rented sector creates a “lack of stability, security and affordability for families and other renters”, and the motion also called on the Government to empower local authorities to deal with rogue landlords.
However, housing minister Mark Prisk made plain the Government’s opposition to red tape in the private rented sector.
His amendment to the motion said that the Government “supports action to be taken against the small minority of rogue landlords, without burdening the whole sector with unnecessary costs”.
The amendment also said that while it backed measures against criminal landlords, “excessive red tape would force up rents, reduce choice for tenants and undermine future investment”.
Prisk, a former chartered surveyor, was, however, reminded of his own attempt to introduce regulation of letting agents by Dromey, who said that the RICS had described the private rented sector as like ‘the wild west’.
Dromey said the RICS “are not the only surveyors” with this opinion. Prisk had, when in opposition, tabled an amendment to put letting agents on the same legal basis as estate agents.
“I agree with him,” Dromey declared. “The question is, does he agree with himself.”
The Government’s stance yesterday in the Commons reflects its position last week in the House of Lords, when it made it clear that it would not support Baroness Hayter’s attempts to get letting agents recognised in law as estate agents.
Andrew Gwynne, Labour MP for Denton & Reddish, spoke of his cousin Alison, a mother of two whose marriage had broken up. He had been with her to various letting agencies two weekends ago, but as soon as the words ‘housing benefit’ were mentioned, agents closed their portfolios and all that was available was poor-quality accommodation “at extortionate prices”.
One Tory MP who did support the idea of longer, ‘more family friendly’ tenancy agreements was Jake Berry, for Rossendale and Darwen. He suggested six-year terms with rent reviews and rolling break clauses. But, he said, it wasn’t necessary to change the law to achieve this.
Labour lost their proposal by 292 votes to 225. The Government's amendment was passed by 284 to 220.
The debate was at short notice, but housing charity Shelter lost little time in mustering support, asking its supporters to email their MPs.
Shelter said: “Private renting is the worst of all worlds. Rising rents. Poor conditions. And soaring letting agent fees.”
The full debate can be read here:.
https://tinyurl.com/bbdyulk
.jpg)
.png)
Comments
So pleased this was defeated. However, it's this Government that is pushing ahead with the 'rent direct' plan as part of UC, against all the advice from councils that have been piloting it.
The evidence is that the scheme will lead to massive rent arrears for private landlords, with no means of collecting it as the tenants are on benefit, with the end result being a huge rise in evictions with attendant costs for landlords. The same situation applies to councils and HAs, and I have it on good authority that the tenants will be seen as making themselves intentionally homeless, and regardless of whether they have children, they will be evicted and the children taken into care.
Landlords will not take tenants on benefits because the risk is too great. I was thinking of handing over a flat to the local HA, but have been advised to wait and see, because the council/HA no longer has any responsibility for rents.
This is a vicious circle, and I really don't understand the political objectives behind such an obviously flawed scheme.
No - to a national landlord register.
No - to mandatory longer AST periods for families with children. Proper landlords will keep the tenant in the property as long as possible UNLESS there is a damned good reason why they need to get the tenant out!
No - to payment of housing benefit to tenants in the vain hope of them learning how to manage their money. Such twaddle from some quarters in politics.
No - to banks restricting the maximum period of an AST to 12 months.
No - to agents charging extortionate fees for renewing an AST that doesn't take very long to prepare and sign off.
Yes - to having some way of naming and shaming the bad/criminal letting agents to warn tenants and landlords about the risk of using them. Throttle their fee income by boycotting the bad ones.
Yes - to a standard amount or a fee cap on all charges levied by a letting agent. They should be reasonable and proportionate.
Yes - to making sure all letting agents have PII cover and are properly checked for client accounting rules with properly recognised and ring-fenced client accounts from the business' own account and funds.
Great article and excellent comment from Mark. I would like to see a program of education and enforcement of the 100+ regulations we already have before we introduce anymore hurdles. All the issues the pro-more regulation brigade raise are covered by existing laws. Introducing more regulation would be more regulation for the good landlords and agents to abide by and more regulation for the rogues to avoid.
A lot this mess is being stirred up by Shelter, who like the RSPCA appear to have become a political platform instead of the Charity that they purport to be. If this is the case they should lose their charitable status otherwise they should concentrate on their aims of supporting the homeless.
If private landlords don't continue to invest their own money in property for the private sector, who is going to house them? On the whole I have very decent people in my properties and we do have mutual respect. In spite of lengthy court proceedings one of my tenants has gone off owing me two years rent. Only the low interest rates has saved me from bankruptcy.
What we need is quicker court action to deal with those who think they can live at someone else's expense. Only good honest landlords will comply with the law, the evil will always get around it somehow.
As for the latest nonsense - paying rent directly to those on benefit to get them to budget - whose stupid idea was this? Has no one noticed that many of those people need help to get through the day, so being faced with eviction for non payment of rent is going to help -is it?
The wrong people are being penalised.
There are already rules and laws in place. The Governments and organisation made a mess of housing and want us to pay.
As sorry as I feel for cousin Alison and her inability to find a landlord willing to take her as a housing benefit claimant, her situation and that of countless others like her is a direct result of the governments
Actually I cant be bothered to finish this rant- everyone knows whats going on and nobody takes any notice anyway..
Excellent article Rosalind. Thanks Heavens that common sense prevailed. I watched the entire debate and was actually very impressed with most of the arguments from both sides of the house.
The key issue here is that many see the PRS as unregulated, however, the sector is already burdened by over 100 laws, many of which are not being enforced.
I don't know of any decent operators in the sector who would be against stronger enforcement of the existing rules. Criminals and rogues operating in our sector cause us untold damage.
Shelter are consistently exposed to the bad side of our industry so it is logical that they have formed such a jaundiced opinion of the sector. The reality though is that the vast majority of landlords, tenants and letting agents hold each other in high regard.
The blame for any mess in our sector has to be pointed towards the lack of enforcement of the laws in my humble opinion.
Regards
Mark Alexander - Founder of Property118