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Give landlords better due diligence on future tenants - call

A high profile PropTech entrepreneur has come out against the scrapping of Section 21 eviction powers for landlords.

Alexander Siedes, chief executive and founder of Homeppl, says it would be better for landlords to have improved advance information about tenants.

“In my experience, there is always a reason why a landlord chooses to evict - it could be because the tenants are in arrears, or they are not meeting their legal obligations under the agreement” he says.


“In some circumstances, the landlord may be struggling financially and need to sell the property, and surely they need to be able to sell their assets to avoid being forced into debt. 

“I think there is a much bigger issue here around tenant discrimination and how good tenants are being effectively ‘blocked’ from renting while bad ones are slipping through the net - this is having a detrimental impact on the market as a whole, and it will continue to if the industry uses old measures to address new challenges.”

Siedes claims that due diligence on tenants is traditionally done by insurance-led businesses who use it as a loss leader to cross-sell insurance. 

He believes they have no incentive to do it well, and every reason to do it badly as it gives them the opportunity to upsell insurance. They rely on credit reference agencies and people for the checks, rather than technology, which means while they might be gathering the ‘necessary’ data, they have no clue what to do with it.

He continues: “They can’t spot rental fraudsters, and those who don’t have a credit file -  which is common amongst internationals, the self-employed, or students - are forced to pay the rent upfront and are, ultimately, financially discriminated against. 

“The result is that good but ‘invisible’ consumers are being denied properties, while fraudulent applications make it through the process, resulting in 8.0 per cent defaults and 1.6 per cent court possession claims in the private rented sector. This is a huge cost to landlords, much of which has to be recovered by increasing rents to mitigate further risks.”

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    Some recognition of the harm done to decent tenants by the rogues whom Shelter, Generation Rant etc. take taxpayer money to protect.

    More of this type please!

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    That rent insurers will accept bad tenants is not my experience. The companies operating rent insurance I find only take on tenants who are guaranteed not to default.

    Rent insurers would reject most of my tenants. I agree they reject a lot of applicants that would make good tenants, I know this as I house them but how you distinguish the good from the bad in those rejected by the insurers is extremely difficult and comes down a lot to gut instinct.

    Jim Haliburton
    The HMO Daddy

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    This guy has got it spot on. The gov should be listening to this. Bad behaving non paying tenants make it difficult for good behaving paying tenants.
    All I want to do is house people for as long as I can for a profit. People who don’t like this then buy your own property or live in a tent

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    Exactly that face to face value better than all the checks, you’ll soon get the feeling in your bones what they are all about.
    The rent guarantee insurance if you can get it you don’t need it.
    Just reinstate Section 21 how it was and give LL back control of his property. I get on well with my Tenants some can be difficult at times and I am awkward enough myself as a LL you can’t be too cosy either just keep that one step between you but I never get rid of rent paying Tenants and they know that no matter what damage I’ll fix. I am just sorry the day that they leave

  • PossessionFriendUK PossessionFriend

    Fact of the matter is there is a significant amount of Tenants that are unsuitable in terms of financial history ( debt record ) or behaviour that are acceptable to a Private Landlord.

    The problem is that these Rogue Tenants melt into the Millions of genuine Tenants and are sometimes hard to distinguish without considerable vetting. ( which is recommended ) I'd suggest a tenant interview should be something akin to a job interview with a 'C.V. - list of past references ) verified.

    The Rogue tenants need to be picked up by the state, as its not a responsibility or attractive business proposition for private landlords to accommodate social misfits with mental, substance or a variety of other maladies.

    If Sec 21 gets abolished, an awful lot of tenants ( and there unfortunately will be some good one lost in collateral damage ) won't be able to secure a private sector tenancy. Sure some will fall through the ever-decreasingly, narrrowing gauge 'net' -
    Sec 21 will decrease the size of the 'catch'


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