David Lawrenson
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Comments (97)
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Comment on: Licensed premises
A very good summary of the issues Colin.
If regulating the sector via a new licensing scheme is to be the way forward, local authorities will need to be aware of the Scottish experience with universal registration as reported by the Scottish Exec here:
http://www.scotland.gov.uk/Publications/2011/07/13111732/1
Some key points from the summary follow. I don't think one could say that the Scottish scheme has thus far quite achieved its objectives - especially see points 9 and 11.
"1. At this stage, it continues to be difficult to quantify exactly how many landlords have not yet registered and whether they do not register because they are unaware of the requirement to do so or because they ignore this requirement.
2. The research findings reveal that landlords are now more likely to have access to information and advice provided by local authority Landlord Registration teams. However, there is no guarantee that management of property among private sector landlords reaches a specified standard.
3. Many local authorities do not have a performance and monitoring system in place for Landlord Registration.
4. While feedback from the survey of local authorities, case studies and stakeholder consultation indicates that the IT system has improved, there continue to be many frustrations with the system and suggestions for improvement.
5. Problems with the user friendliness of the website are evident and a clear picture of the problems which landlords have in using the system is required before any changes are made.
6. The problems associated with the landlord website (such as user difficulties, labeling, joint applications and reporting tools) and associated administrative systems add to the administrative burden within local authorities.
7. Within the central administration of the scheme, there is scope for improvements in relation to the administrative process associated with fee payment, reporting and governance.
Fees and Admin
8. The fee payment system generates delays in payment processing and failed payments are resource intensive and take a long time to rectify. If timescales are improved, local authorities will be able to more effectively plan resources and reconcile the data with their records, which should be standard practice.
9. In the main, fees do not cover local authority costs, many being supplemented from other budgets. This lack of income means that resources are focused on the administration of the scheme rather than investigation or enforcement activity.
10. Many local authorities do not have a performance and monitoring system in place for Landlord Registration.
11. There is evidence that the sector is now more aware of its obligations when acting as a private sector landlord and there have been some improvements in landlord behaviour. However, the evidence collected suggests that Landlord Registration has not removed the ‘worst’ landlords from the sector.”
12. At present, there is no clear understanding of the overall administrative costs of Landlord Registration and this is not taken into account in any of the fee structures. Local authorities need to improve budgetary practices, so that they are aware of the income and expenditure associated with Landlord Registration."
David Lawrenson
www.LettingFocus.com
PRS -
Comment on: Think tank calls for London welfare changes
Joe,
Not sure I would agree a hunnert percent that the PRS is unregulated.
There are a myriad of laws and regulations that private landlords already have to comply with. The problem is that the penalties for non compliance with existing regs are derisory and the costs to the LAs to enforce against rogue landords are very high.
Have proper penalties in place for the rogues, deterrent penalties for the careless and make it easier for LAs to act on, for example, issues like "sheds with beds".
If that doesn't work then impose regulation on the PRS, but do think hard first - because costs imposed on suppliers tend to passed onto the consumer of the service - in this case, the tenants. -
Comment on: Shapps hits out at BBC over Newham coverage
Response to A Landlord from LettingFocus re the Newham Licensing scheme.
You make a few fair points re the situation in Newham.
The proposed selective landlord licensing scheme in Newham is predicated partly on the belief that licensing all landlords will somehow help stop antisocial behaviour by a minority of tenants and bad landlord practices by some rogue landlords.
But at LettingFocus.com we are not aware of any decent landlord who actually wants to keep an antisocial tenant. So, it seems to us a potentially hefty solution which may miss its goal.
It might have been better for Newham to use their existing powers to shut down the minority of rogue landlords and also prosecute antisocial tenants rather than set up a potentially costly scheme for all landlords (costs will likely be passed on in part of whole to tenants) and which may not work because the rogue landlords will simply ignore the licensing scheme anyway, just as they ignore most of the rules and regs.
David Lawrenson
LettingFocus.com -
Comment on: Shapps hits out at BBC over Newham coverage
The Local Housing Allowance (LHA) rate is set at the 30% percentile of local rents, so 3 out of 10 properties in any area should, by definition, be available.
And sure enough, a quick look at Rightmove and we can see lots of properties are on the market to let in Newham at cheap rents.
But the real issue is that they are not readily available to LHA dependent applicants. This fact and the reasons for it appear to have been missed.
The reasons why landlords are often reluctant to let to tenants who are on LHA are many, varied and are more complex than has been reported in the main media…..
• When letting to tenants who depend on LHA, assuming the LHA can be paid direct to landlord - (which is not always the case following Labour’s 2008 changes to the system) – the payments are always made in arrears, unlike non-LHA lets where they are always paid in advance. This is obviously worse for the cash flow of landlords.
• LHA tenants don’t usually have a deposit they can hand over to the landlord to protect. And even where local govt can help with a deposit, as is the case in Newham, the landlords often tell us that the deposit schemes are cumbersome, slow to administer and claim against in the event of damages caused by tenants.
• Buildings and contents insurance premiums are often higher where a landlord lets to people dependent on LHA. Sometimes insurance is refused altogether.
• Some buy to let mortgage loan terms and conditions do not allow landlords to let to people on benefits such as LHA.
• LHA admin is slow, cumbersome and involves lots of form filling. Payments can start and stop without notice and the council can even try to claw back from the landlord past payments, if it later emerged that the tenant was claiming fraudulently.
• Some landlords (a minority but sadly a significant one) think that LHA tenants are more likely to be non-payers or to not look after properties properly.
The real issues are around LHA and how it works. Sorting this out should be the priority.
And yet we don't hear senior people in local govt housing highlighting these issues.
At LettingFocus we wonder whether this is because they don't think it is worth highlighting because central govt won't change how LHA is administered (or the coming UC) or is it because they don't understand how the PRS works WRT Local Housing Allowance.
David Lawrenson
Private Rented Sector Advice
LettingFocus.com -
Comment on: Livingstone unveils plans for private-rented sector
Reply to Neil Robinson,
The reality in London is that private landlords have a wide choice of tenants and do not need to let to people on LHA. Indeed, many are increasingly shying away from it and will continue to do so now LHA rates are capped / set at 30th percentile.
The key reasons many private landlords shy clear is higher insurance permiums for lets to this group, because some of the mortgage lenders do not allow it anyway, because payments are made in arrears and not in advance, because of poor LHA admin in some boroughs, because of relatively heavy paperwork burden and because sometimes there is a lack of deposit.
Also, some private landlords have a prejudice against letting to this end of the market.
These are the realities, I'm afraid.
Experiments with not for profit letting agencies and calls for longer term tenancies (which many buy to let mortgage lenders do also not allow their landlords to issue, by the way) is not going to make lots of landlords come forward, unless the "offer" is very persuasive indeed.
I'm afraid Ken, whilst well meaning, may be on a bit of hiding to nothing unless a lot of "benefits" are put together to drive private landlords to engage with this part of the market.
And this will have a cost. Will taxpayers and landlords and their tenants want to bear this cost -and exactly what is the cost (and measure of social benefits) of the plan anyway?
David Lawrenson
LettingFocus.com
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