I recently sat through an evidence session at the London Assembly which was looking at the physical condition of property in the Private Rented Sector.
The PRS in London has grown enormously since this part of the market was liberated by the 1988 Housing Act. From about 3% of the market then, private renting now provides almost 20% of homes in London. This creates mobility of labour, provides an investment vehicle for many individuals and families and, most importantly, it works, largely without any significant interference from Government. Provided you let and manage in accordance with the simple, clear and easily followed rules laid down by the Housing Act, the state will largely leave you alone.
However, there is agitation on the left! The new Government has moved to scrap the Tenants Services Authority, which was set up by Labour to regulate the social housing sector and subsumed its minimum statutory responsibilities into the Homes and Communities Agency. This stopped dead an idea the previous Labour Government had floated of extending the TSA’s role to licensing all private landlords. Now, many organisations which represent tenants are agitating for new rules to be brought in anyway.
Much of the discussion at the Assembly committee meeting was about how tenants needed “more rights” in order to challenge their landlords over the condition of the property they were renting. I don’t agree with this as their rights are pretty clear and almost all tenancies work well. However, this pressure is growing as the Government moves to allow councils to fulfil their responsibilities to those classed as “homeless”, by putting households into private rented accommodation. Various suggestions have been made, including limiting councils to only putting people into homes which meet “Decent Homes” standards and only where the landlord was accredited.
Personally, I don’t think it is practical to do this through some sort of legislative requirement. There are already a number of accredited landlord schemes run by both the Residential Landlords Association and by councils. These seem to work well, but I think it would be far better to have something much simpler which helps both landlords and tenants, and along the way, the Treasury!
Rather than accredit or license landlords, with all the associated cost and requirements to check and be checked, why not set up a simple, online system to register all tenancies? Landlords would enter their details, the address of the property and the tenants’ names and with a single click, produce a simple form setting out to the tenant what they were expected to do and telling them what the landlord would do. This helps to make sure both sides know both their rights and their responsibilities and could be especially useful to new tenants and new landlords.
Add a “rating” system allowing both landlords and tenants to comment on how their counter-party behaved or the condition of the property and you have an extension of market knowledge to both sides, allowing more informed choices to be made. Tenants can look up a property to see if previous tenants had problems or if the landlord acted unreasonably and landlords gain something akin to an online reference checking service, so they know whether their prospective tenant walked out leaving the place a mess or failed to pay their rent. All this should drive better behaviour from both landlords and tenants.
Conveniently, this would also create a list for the Treasury to check against tax returns to make sure landlords are properly declaring the income they receive. That will help boost tax revenues and make a small contribution to helping us dig our way out of the debts Labour left behind!