A lettings agency chief in Scotland says the upcoming ban on agents levying fees on tenants - to be introduced in England next week and Wales later this year - will not be as catastrophic as some forecast.
David Alexander - joint managing director of property management company Apropos by DJ Alexander - says Scotland is an example of how to deal with the changes.
Alexander insists Scotland is “far ahead” of the rest of the UK in improving the status and security of tenants, and he believes it is the existing Scottish model which is now being replicated and implemented in these legislative changes.
“The Tenants Fees Bill is aimed at clearing up ambiguous and vague administrative charges and, while some of these were legitimate, many agents used them as a source of income sometimes accounting for 30 per cent of annual revenue” says Alexander.
He says the storm of complaints from agents and landlords claiming they are being financially squeezed “fails to acknowledge or understand that these regulations were introduced in Scotland in 2012 without the world collapsing and without any obvious harm to the private rented sector.”
Alexander says the ban in Scotland has been only one part of a more thorough-going reform of the sector north of the border.
He insists there has been a determined effort over recent years to improve the relationship between landlord and tenant through changes in the security of tenure, the length of leases, and reduce the confrontational element in the landlord and tenant relationship which the original 1988 Housing Act effectively promoted.
“Scotland has also led the way in ending no fault evictions, in abolishing short term tenancy agreements of six months and introducing indefinite tenancies” according to Alexander.
He now says the task is to change the mindset of so many landlords and agents “who have often viewed the tenant as simply a cash cow.”
He concludes: “These legislative changes should be regarded as an opportunity to create a better, fairer, and more equitable private rented sector which produces a mutually beneficial system for all concerned. June 1 [when the fees ban comes into force in England] is merely the start of change, and Scotland is continuing to lead the way and provided a sound model for the operation of the private rental sector in the future.”
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If all the 'positive'statements here were turned into negative statements, we would be getting somewhere near the truth. David Alexander appears to be living in a parallel universe where black is white.
Of course a key difference is that in England this comes off the back of S24 whereas in Scotland it was a stand alone piece of legislation at the time. So not a direct comparison. However i agree that many did abuse tenants as he describes and have ruined it for the rest of us.
What business model does not regard the product it provides as a cash cow or a source of profit. We provide accommodation. We do not have charitable status since we are not running charities. So we have to have a secure business model that is profitable.
Considering how many tenants can steal rent from landlords by not paying and walk away with impunity, if the landlord is lucky enough that they do just walk away within a couple of months, renting out property is a risky business.
I, for one, have always managed my own properties and never used the thieving services of fraudulent agents, who charge money to inspect the property at the end of each tenancy which ought to be part of their management job for which the landlord pays them 10-15% of the rent! So i am glad about the fees ban.
i am not glad about the idea of indefinite tenancies and neither are many tenants who often just want to rent for three to six months because they plan to buy somewhere! So how does giving such people a year's contract with a six-month break clause after which they can give a months notice help these tenants? It does not.
Getting rid of no fault evictions will make getting rid of troublesome tenants much more costly since it will require court action now and witness statements from co-habiting tenants, which are as rare as hens' teeth, even though the complaints may be legion! And yet landlords are expected to police and evict tenants who engage in anti-social behaviour! What a ridiculous joke!
Lets face facts: no landlord would want to get rid of any tenant who pays his rent on time, cleans up after himself and allows his neighbours to live quietly without disturbance! No marginal increase in rent is worth risking getting a tenant of variable reliability! So no fault evictions like no fault divorces are the landlords' only cost effective defence at getting rid of troublesome tenants.
So without better safeguards for landlords to enable them to ditch troublesome tenants in the usual two month notice period, only companies with large profits and deep pockets will be able to shoulder this risk.
Once such corporate landlords have cornered the market watch rents rise beyond your wildest dreams and watch the referencing requirements rise too.
How will that help young people who have just moved to an area to take up work who have not yet established connections in that area? It won't, so once again interference by bleeding-heart ignorant liberals will make it even more difficult for young people to become independent.
What this country needs is more council housing to provide moderately priced HOMES for settled families who want to live in an area and have security of tenure! The right to buy, whilst enriching some has impoverished the majority because governments whether right or left wing no longer want to shoulder this social burden!
Well done fools!
Something that could greatly assist tenants is to announce that the Room For Rent Allowance is to be abolished.
For any residential property unencumbered or with a residential mortgage to be able to take in lodgers completely tax free.
Obviously the number of occupants would need to be no more than 4 to avoid Mandatory HMO Licensing.
There are millions of spare rooms in residential properties that could be used for lodgers.
These would ease tenant demand on normal rental properties.
So if a LL can afford 5 residential mortgaged properties then lodgers may be taken in completely tax free.
No S24 either.
Most residential mortgages restrict lodgers to two as a maximum anyway.
Of course not many homeowners would want to take in lodgers to their various residential properties.
But tax free rent could be the vital incentive to encourage such homeowners to take in lodgers.
Of course for troublesome tenants the only real protection against rent defaulting ones is RGI.
But RGI isn't easy to qualify for so is not a viable for most LL.
As suggested most LL take on a massive risk when they let to tenants who don't qualify for RGI
Few guarantors if they can be sourced would qualify for RGI.
The public at large simply doesn't appreciate the massive business risks that LL take when letting to tenants who mostly can't qualify for RGI.
There comes a point when letting to lower quality tenants is not worth doing anymore.
One wrongun can destroy profits for years.
Only a speedy eviction process will encourage LL to risk letting to lower quality tenants.
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