A new inquiry into the private rental sector is being launched to see whether local authorities have enough powers to tackle the problem of ‘rogue landlords’. Letting agents have welcomed the move by the Communities and Local Government Committee, which follows a report it published highlighting areas where the government needed to take action to improve the sector. The inquiry will also look at whether the controversial landlord licensing schemes are working. It will try to deduce whether these schemes have led to higher quality accommodation being provided and whether the complaints procedure for tenants has been effective.
CLG chairman, Clive Betts MP, said there are real concerns about whether local councils are able to protect tenants by tackling bad landlords and rogue practices. The move comes as even more people are living in rented accommodation because the high cost of buying puts owning a property out of reach.
The new inquiry will look into how council officers carry out enforcement work to deal with rogue landlords. It will also investigate the methods used by councils to provide private rental accommodation in their districts. ARLA Propertymark, a professional body for letting agents, feels this is a great opportunity to review what has worked and what hasn’t. The National Approved Letting Scheme chief executive, Isobel Thomson, also welcomed the announcement. She said NALS had been calling for greater enforcement across the sector for some time and that rogue operators had slipped under the enforcement radar for too long. Interested parties can submit written evidence to the inquiry by November 24.
Certainly, the licensing scheme seems to be working in some districts. The London Borough of Newham, for example, introduced a borough-wide licensing scheme in 2013 and has since prosecuted 1,215 private landlords, banning 28 of them, and has instigated legal action against 25 letting agents. A number of landlords have also been brought to the attention of HMRC, because of alleged discrepancies between their declared rental income and those of Newham’s.
On paper, it certainly seems a good way to flush out the rogue or illegally-operating landlords. If an area is covered by the licensing scheme, then a landlord must apply for the licence and prove he is a ‘fit and proper person’ to be a landlord. The schemes have been introduced in areas of low housing quality or where there are persistent problems with antisocial behaviour. Holiday lets are among the properties exempt from selective licensing and so landlords letting properties on AirBnB, as an example, will not have to pay.
However, most professional landlords feel they are being penalised at the expense of the rogue ones, who will probably ignore this regulation as they do all the others. Landlords now have to pay around £400 for a licence for every property they own in an area covered by a scheme. This then has to be renewed every five years. Breaches could lead to a court prosecution or a civil penalty of up to £30,000.
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