Ask the experts: How can we get rid of rogue landlords?
With rogue landlords on the front pages once again, we ask three leading industry voices why they think the issue persists and what should be done about it.
There are an estimated 2.5 million landlords in the UK. Of those, the government estimates there are around 10,500 rogue landlords currently operating – a minuscule 0.42%. In April 2018, Housing minister Heather Wheeler told a Select Committee that private rented sector (PRS) homes failing the decent homes standard had fallen from 47% to 27% over the past ten years.
Progress? Yes. But Shelter says that whilst percentage wise figures are reducing, the fact that the PRS had grown so big in that time meant that in real number terms there were actually more of these substandard properties. With such a significant problem facing the industry, something needs to change.
A Twitter poll we recently conducted found that 43% of landlords believed tougher sentences and the enforcement of existing laws are the answer, but what do the experts think? We sat down with three leading voices from three different areas of the industry to ask them why they think the issue isn’t going away and what needs to be done to force these rogue operators off the table.
Paul Shamplina, Founder of Landlord Action, Author of The Landlord’s Friend and star of Channel 5’s Rogue Landlords, Bad Tenants
“The landlords I speak to are cheesed off that they are getting a bad name by being tarred with the same brush as these rogue landlords. I get frustrated with the rhetoric, and I’m always speaking up on behalf of landlords and the decent people in the industry, because we’ve got 2.5 million landlords out there and only 10,000 or so bad apples. You simply don’t hear about the excellent work landlords do and about how they prop up the social housing sector.
“The truth is that the majority of landlords are small landlords and some of them are very naïve. They don’t like spending money on repairs, which is an issue as well, of course, but the main problem is their failure to understand what’s happening in the industry and the obligations that come with renting a property. Tenants also need to be more informed, but statistically, a tenant will stay in a property a lot longer if it’s managed by a letting agent rather than an individual landlord, because they’re governed by the property.
“I sat on the first government meeting when they were talking about banning orders and a potential rogue landlords list, and I suggested that there should be a ‘three-strikes-and-you’re-out rule’ for serial offenders. There should be enforced sales, but if you’ve got a rogue landlord that’s making fortunes out of the housing benefit system or vulnerable tenants in poor quality housing, then the council should be applying much stiffer enforcement.
“What would really motivate these rogue landlords is heavy fines. Councils could then reinvest that money and put more environmental health officers and boots on the ground. Of course, the bigger picture is that even if the councils do collect that money, the budgets are stretched, and their main spend is to do with vulnerable children, social care, and social housing care for the elderly. So then they have to juggle their books. If they ring-fenced the fines and reinvested them into prosecuting more rogue landlords, then I think that would be a good start.”
Jon Werth, Co-founder of Life Residential
“Like crime in any walk of life; there are always going to be people trying to beat the system. In my experience, you tend to find it’s more prominent in the lower end of the market where people have let their guards down, and they’re not able to be trained as well. The ones that are badly trained or desperate to make money will ignore their instincts, which is a bad move. For us, where we’re looking at four and five-star properties, rogue landlords are generally not a problem. That’s because we get better fees and the affordability to train and pay people better. It’s a domino effect, and that effect is being hampered when your fees are so low that you’ll let anyone in.
“There might be people at the lower end of the market that need educating, but then there are also the people with £30 million portfolios that know exactly what they’re doing. Often these rogues will hide behind an online agent or a high street agent and will use them as an excuse. Or they’ll simply use ignorance as an excuse.
“There’s plenty of legislation, probably too much. There are over 160 basic rules and regulations, but you can’t possibly remember them all. You might also have a bad day where you’ll say no when you should have said yes. It’s human nature, and the human element is still dominant in allowing rogue landlords to get away with what they get away with.
“Of course, ‘rogue’ can mean a number of things. We have landlords that we might call rogue because they won’t get back to us knowing that we’re waiting for them to agree on a £3,000 spend. We also have overseas landlords that are paying a fee to avoid registering for the non-resident landlord overseas forms. Or is a landlord a rogue because they have fifteen tenants in a four-bedroom flat and they’re not paying to upkeep the heating system or they’re not giving tenants their deposits back? How do you define rogue? There’s no clear definition of what it is.
“The minute an agent walks into a property that’s substandard, they should know that they shouldn’t be dealing with that landlord; but some people do. There should be a minimum property standard, which would absolve a lot of the problems, but it’s ‘buyer beware,’ isn’t it?
“As for who should be responsible for tackling the problem? I think it should be a mixture of the councils, the government and a trade body to instigate checks similar to a car MOT. So, ultimately you’re checking on the credibility of the property and the credibility of the landlord. Is the property safe and is the landlord fit for purpose? It’s everyone’s responsibility; the agency, the landlord, the councils and the government. The problem is they’re not all communicating, so it doesn’t all fit together.
“There are various things that HMRC can do as well, because where you’ve got a professionally rogue landlord, there’s going to be an element of financial irregularity. How do you chase 10,000 people because they’re doing the HMRC out of £1,000 or £2,000 a year in tax? You go for the low-hanging fruit, and that’s what everyone does. I think that’s why there are only 10,000 rogue landlords and not 100,000. We’ve also gone through what feels like a million housing ministers in the last ten years, all of which have different agendas to get out of that what they’re doing in the quickest way possible to improve their career. Someone in property needs to be the housing minister and pull it all together, because they understand it more.
“I do believe that it will get better. Look how many things we’ve got now that we didn’t have before in terms of obligations and tenant deposit schemes, gas safety, HMO rules and regulations and landlord licensing. I just think when you see an article or something about the rogue landlords, how many are we talking about? To identify six in a council is great TV and it’s a great article, but does that truly represent the percentage of problems out there? I’m not sure that it does.”
Andrew Green, Professional Landlord
“To be honest, I’ve kind of switched off from the noise about rogue landlords. They are an issue, but the media, and certainly social media, really overemphasise the problem. It’s about perception more than anything. Bad news travels fast and far. It’s human nature. If you get excellent service, you’ll tell two or three people. If you get lousy service, you’ll tell 100 and stick it all over Facebook. It’s the same for landlords. But just because it’s more visible doesn’t mean things have got worse.
“There are nearly 200 rules and regulations you have to follow to be a landlord. You can have all the rules and regulations in the world, but if you have someone determined to break them, they will. This goes for all walk of life. We have plenty of rules and regulations for driving, but you still have people breaking speed limits.
“I’ve been a landlord for the last 18 years, and in that time there have been far more checks and laws added and things have got a lot better. The majority of us do a great job, but it’s the small minority that gives the whole industry a reputation.
“I think if the government spent more money on enforcing existing rules rather than creating new ones, we may be able to eradicate more landlords that don’t play by the rules. But, as I say, it’s a tiny, tiny minority.
“Everything now is geared towards tenants, but in my experience, there are bad examples on both sides. I’ve had people that simply don’t look after the properties, and then complain that there’s damp or that there are rats. But these things happen if you leave the house in a tip or leave wet laundry out. But they will speak to friends and tell them what an awful place they’re in. We have the bad landlord register now, but how about a bad tenant register? That would be interesting.
“Finally, I think there are some agents out there that give us all a bad name. There are some good ones, don’t get me wrong, but there are plenty happy to take their cut without properly vetting the landlords or the properties they rent out.
“Landlords are feeling pressure from all sides at the moment. The tax benefits are dwindling, we’re regularly targeted in the press, but without us – the good ones anyway – the rental market would be dead. We help put a roof over people’s heads, but people just see us as making money to pay our mortgages off. We provide a service, but I think in the current climate of ‘generation rent’ there’s a stigma attached to being a landlord and people are naturally looking for people to blame. But rogue landlords to my mind are a symptom, not the cause, of the problem.”
There is no single answer to the issue, of course, and our experts might disagree on how to tackle the problem. However, if they have taught us anything, it’s that landlords on the whole are getting an undeserved raw deal in the press and that legislation and governmental interjection alone simply doesn’t work to curtail rogue landlords.
To really make a difference, the industry as a whole needs to communicate better, band together, stand up and bang the drum for the great work that it does. Only then will it be able to remove the few bad apples that take the shine off the rest.
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