Every time there’s a story in the media about rogue landlords breaking the rules, forcing tenants to live in unsafe properties, there are calls for tighter regulation. What then happens is new laws are introduced that inevitably dump yet another cost burden onto landlords. Although most decent landlords see the benefit of making conditions better and closing loopholes, the unscrupulous ones – who already don’t comply with existing laws – take not a blind bit of notice.
The result: the good accommodation out there gets better and safer, but the problem the new legislation was really brought in to tackle, remains.
There are calls for random inspections of rented properties by the local authority housing department, which is a great idea. If only the local council knew which properties were rented…
Since 2006 in Scotland and 2014 in Northern Ireland, all landlords with investments in those countries have had to register information about themselves and their properties. North of the border, that’s via the local council and costs £55 for the initial registration, plus £11 for each property, with registration lasting for 3 years. In Northern Ireland, landlords must submit information to the national Landlord Registration Scheme, which costs £70 for three years.
With these two schemes, it means there is a national register of rented properties, but it doesn’t actually dig into the condition of those properties or what the landlords know about the business they’re operating. The most comprehensive and useful scheme came into force in 2015 in Wales, where landlords have to register with Rent Smart Wales and anyone who wants to manage a property – landlord or agent – must be licensed. Registration costs just £33.50 and lasts for five years; the license application fee is £144 for five years and the landlord must give details of the training they’ve undertaken, either via Rent Smart Wales itself or with one of the scheme’s authorised providers.
However, all these schemes rely on landlords themselves coming forward to register, so the risk remains that those who are currently operating under the radar will continue to do so. Nevertheless, a register is a good starting point, and if the consequences of not registering are severe enough and local councils can start making the right number of spot checks each month, the industry might be able to identify more of these rogues and put them out of business.
The penalties vary quite wildly. In Scotland, anyone who lets a property without being registered could be fined up to £50,000 and banned from registering for up to five years. In Northern Ireland, the council can issue a fixed penalty of up to £500 or prosecute the landlord in court with a fine of up to £2,500. The consequences in Wales include: a fixed penalty of up to £250, rent repayment orders and criminal prosecution and fines (no amount specified). Unregistered and unlicensed landlords are also unable to serve valid Section 21 notices.
So, given that the bad apples tend to be most concerned about the cash in their pocket, it seems Scotland is the only country to have an effective deterrent at the moment – perhaps Wales and N.Ireland should rethink their legislation.
Flaws in other UK schemes aside, quite why a national database hasn’t yet been established in England is something of a mystery. Many councils have their own requirements for registration and/or licensing, but there’s no blanket law – and none seems to be on the horizon. Without any joined-up thinking between councils, those who let unsafe properties and are pulled up on it in one area can simply move their investment to another area and do the same again.
Of course, establishing a scheme and – importantly – carrying out inspections of rented properties costs money. But given that the maximum civil penalty a council can hand out to landlords has recently been increased from £5,000 to £30,000, and that money is ring-fenced to help fund further enforcement activity, why not invest now in a registration and licensing scheme in place for England? The more rogues that are found, the more money there will be to invest in manpower to police the lettings market and everyone’s a winner.