In a major initiative for the private rented sector, the Department of Communities and Local Government has announced there is to be a ‘Charter’ for tenants along with compulsory redress and – years after it was first advocated – longhold rental agreements.
This is for tenants in need of the kind of housing that was once available from local authorities and housing associations. Housing stock that is just not there any more.
And, by the way, not only is there still no housing minister in the cabinet to take a seat alongside the Secretaries for Health and Education to fight for housing: the role has been downgraded to that of junior minister and, indeed, housing is only one of Kris Hopkins’ briefs.
“This is not currently a government role,” says the DCLG.
At least Mark Prisk, Grant Shapps, John Denham, Caroline Flint, Yvette Cooper and the other six housing ministers since 1997 did have that status, even if their quick-fire turnover proved that neither Labour nor the coalition attached much importance to the role.
Longhold tenancies were first proposed by Frances Burkinshaw when chairman of ARLA. Longhold is not just an Assured Shorthold for the longer term. It is to provide conditions of tenure that would allow private rental property to be treated as a permanent home with the right to decorate and improve to taste, and to provide a stable place to bring up children, as was once the way of council housing.
Also announced by Mr Pickles, as a panacea for the private rented sector, is compulsory redress. This may well instil a sense of discipline and provide for some restitution, but it can’t provide for the return of missing money. It is neither insurance nor a bond.
An unregulated letting agent going to the bad doesn’t have to be a full blown crook for money to start disappearing. True, there are those who use clients’ money to buy a Lamborghini, emigrate to the Cayman Islands or who just can’t stop themselves stealing. In fact, probably the vast majority of agents who do fall into dipping into client accounts do so in a way that is paved with good intentions and false hope. Although the end result is the same: stolen money.
Then there is that small minority who ‘borrow’ from the client account to meet a wage bill or pay the VAT or advertising costs, all firmly believed to be temporary problems. Of course, these problems escalate very quickly to permanence and the end result is the same as it would be with an agent who has set out to be crooked: the money has gone.
No amount of redress will stop any of that, or get it back.
But Client Money Protection as demanded by the professional bodies of their member agents will cover the innocent victims, their rents and deposits.
Careful initial checks and proper annual audits help to keep businesses straight just by their very existence. Then, at least, should the business fail and money vanish, clients money protection does exactly what it says – protects clients’ money and reimburses them.
It beggars belief that, still, Client Money Protection is not mandatory for an industry that holds astonishingly large sums of the public’s money, far larger sums than, say, insurance brokers or financial advisers. Why are they controlled and not the letting agent? The professional bodies have been asking that very question of successive governments for decades now.
Meanwhile this current government comes up with some woolly idea of a Tenants’ Charter. If in doubt, propose a charter. It will come out full of unintended consequences. No matter. Something will have been seen to be done.
But a charter is not an answer. It’s spin. Apart from the desperate need for clients’ money protection, much of the legal framework for the private rented sector is in place, tried and tested: Deposit Protection and Alternative Dispute Resolution, Assured Shorthold Tenancies, Accelerated Court Procedures and the various health and safety requirements. But a charter?
A charter is quick to write, doesn’t require policing and causes confusion so that nobody knows what to do next. And now there is no housing minister to come up with any sense of direction either. It’s a wonderful world.
Malcolm Harrison has been heavily involved in media relations for the private rented sector since the 1980s. He was media adviser and spokesman for ARLA and the ARLA Buy to Let panel of Mortgage Lenders. He helped devise and launch the Tenancy Deposit Scheme for Regulated Agents and was media spokesman for its successor organisation, the Tenancy Deposit Scheme. He launched the original client money protection scheme for letting agents and has also acted for general insurers to the sector
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Comments
My first involvement with Government was in the run up to TDS in 2007, I discovered that no-one at CLG then or since has got a clue about private sector lettings, they just make it up! Seriously they do. They secret CLG inquiry into PRS only invited comment from people who were going to say what they wanted to hear. It is all a sham!