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Reality check

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When dogma blinds logic and fairness. So sad to see an academic allow their personal bias to override academic rigour. Utility companies will still have their assets after the virus; should they give 3 months free gas and electricity? The BBC 3 months off their licence fee? The council 3 months off council tax? Housing Associations will still have their assets and have benefitted from public grant; 3 months off for HA tenants? His defence of the harm of his argument is a nonsense. Then what of tenants who don’t suffer loss of income but stop paying for three months? How would that be policed? So, either total naivety on policy enforcement or a wilful transfer of funds from landlord to tenant. Finally, he states it is “unacceptable that individuals bear the financial brunt of the crisis.” Landlords are, in the main, individuals too. A failed individual landlord is not a failed business and a closed factory but potentially a bankrupted individual with a family. There are competent landlords and incompetent landlords. There are competent academics, and then...

From: Reality check 05 March 2020 08:43 AM

Interesting but it misses the trick. By looking simply at gross yield (rent against capital value) and ignoring running costs and occupancy rate, the picture is far from complete. One high-value house versus two smaller ones? Only one building to maintain, one boiler to service, one selective licensing fee to pay, one kitchen to refit, etc. on the bigger unit. Then again, two cheaper units might have better occupancy rates and also spread risk. And all this changes not just on north versus south, but district by street. Buy-to-let returns are much more complex than simple gross yield calculations and many a landlord has got it badly wrong because they don’t calculate net returns. Can we get a bit more sophisticated, given these assets are, for the majority of small landlords, huge investments on their part?

From: Reality check 21 February 2020 09:01 AM

Then get qualified, James B. It isn’t hard. And given peoples lives and huge sums of money depend on your conduct, why shouldn’t your work be checked by a regulator? Why shouldn’t you jump a small hurdle to demonstrate your competence? Ran a small independent regulated letting agency for 20 years; it’s not just do-able, but good for business.

From: Reality check 28 November 2019 08:04 AM

Set what rents? There won’t be a PRS to meddle with if rents are reduced. I’m getting really fed up with the staggering ignorance of these policy wonks who think the PRS is some coherent monolith wedded to keeping property available to rent. Whereas, there are millions of small individual landlords who will simply go away if their rental is non-viable.

From: Reality check 14 November 2019 08:54 AM

Only been saying this since forever. With many others. Glad RICS have finally woken up, belatedly. Gov has not carried out an impact assessment on the cumulative effects of measures to date to inform the required assessment for measures proposed. There is scope for legal challenge.

From: Reality check 14 November 2019 08:46 AM

“Everyone knows” rent controls are bad for supply, harming the most vulnerable consumers at a time when social housing supply (the housing safety net that kept families off the streets last time rents were controlled) is near absent and new development of social is being cut back. But, a statement without evidence is just an opinion. If commentators want to convince non-expert vote-chasing decision makers outside of the industry, you need to make an unarguable case backed up by hard evidence and verified by an independent external body that specialises in forecasting. Until politicians are faced with the Cathy Come Home reality that is headed our way, this dangerous policy drive will continue. Is industry serious enough about this to work together, share data and pool some cash for the argument to be made properly? Or will our sharp-elbowed industry just bleat helplessly into the echo chamber while Rome burns?

From: Reality check 13 November 2019 08:14 AM

Trade bodies are useful things, but they’re not regulators. The two ambitions are separate and conflicting.

From: Reality check 13 November 2019 08:02 AM

“Should the lettings industry fight back?” There you go in one word; fight. If there is a problem with rogue landlords, rogue agents or rogue tenants, then take proportionate and effective measures to deal. Sure, landlords and agents have been battered lately, often but not always for good reason. Yes, landlords will exit because letting ain’t what it was and that’s bad for tenants too, as curtailed supply drives up rents. But can we get over the idea that this is a fight? How, exactly, does that kind of attitude/rheotoric make us look responsible and customer focussed in the eyes of our customers and government? Who are we fighting anyway? Tenants, aka customers? Government? Think aggressive rhetoric about implausible schemes will win us respect from either? Or just a kicking from ministers sick of getting PRS complaints in their mailbag? Show me a thriving industry that regards its relationship with customers and government as a fight. This is a service industry that is changing rapidly because our society’s culture and expectations are changing fast. Nobody gives a toss about our business model except us. Proclaiming we are in a fight with our customers and government immediately identifies us as wingeing self-serving protectionists. Which customer or government is going to support that? It’s not a fight. Our world is changing. Deal with it.

From: Reality check 25 January 2019 08:20 AM

Woah, think this through. Yes, some recent measures such as tax changes are hurting landlords. But do you really thing gas/electric/furniture regs etc are an unnecessary burden? Assuming you think safety is a good idea, do you not bundle the documentation? If you do, that’s pretty much an MoT. And agency software will do the work, as with deposits. The difference is the information could be held on a portal, where tenants and enforcement agencies can check it’s in place. Problem with that? The sweet bit is that it could be made an offence for not providing the information. So, no need for enforcement agencies to go digging. Provide or get fined. Makes it much easier to hit the rogues. Property let? Yes. MoT in place? No. Fined. Making what you do transparent (assuming you do what you should) is an advert for the good agents, helping to rebuild trust between agent and tenant, and a means of getting rid of the rogue agents. Bleating about providing safety information says what about the industry’s attitude to their customers, exactly? Small wonder government are regulating.

From: Reality check 09 January 2019 08:39 AM

Always amuses me when yields are compared by region. These are gross yields. Shall we follow the Build-to-Rent sector and talk about net yields, after maintenance, insurance, fees, etc? A £500k terraced house in London compared to 5 x terraced houses in the Midlands. Higher gross rent in the Midlands, but 5 boilers to fix, roofs to repair, buildings to insure, etc. Net income is so different from gross. And that’s before you factor in capital growth, if any.

From: Reality check 24 October 2018 09:32 AM

I had to reassure my lovely tenant I wasn’t going to evict him. Why worried? Because 3 families in his street have been evicted as their landlords sell up. Constricting supply is already increasing rents; expect significant rises now. Heaven help the HBen and just-about-managing tenants on the margins, those least able to cope with this. “And the weak suffer what they must”. I have supported regulation of the PRS for the last 30 years, but the blanket nature of this scheme does not meet the Better Regulation principles of being proportionate and targeted. And it seems enforcement is going to be a challenge, with massive non-compliance.

From: Reality check 17 August 2018 09:53 AM

Let’s suppose that the agent reporting a 25% exit rate for landlords was absurdly over-egging his statistic. Let’s call it 2.5% exit rate. That’s 800 properties for sale. Given landlords aren’t buying so much, tenants will be kicked out for vacant possession. Homelessness will rise. Meanwhile, I’m seeing rents rising. This is not good for tenants who are “just about managing”. On benefits? Good luck... It is the poor and vulnerable who will be hurt most. I’ve spent 20 years promoting regulation of agents and landlords, to raise standards. But this scheme does not meet the “Better Regulation” principles of being targeted and proportionate. And it will take £20million-plus out of the city economy. I’m looking forward to comparing the scheme business plan with the reality in due course.

From: Reality check 31 July 2018 08:24 AM

Revenue from fees around £25m. Call it £20m after some discounts. That’s enough to pay for 570 enforcement agents at £35k salary. Meaning one agent per 56 properties. Okay, halve the number of agents to 285; they have overheards; cost of prosecutions etc. That’s still one agent per 112 properties. Which is a reasonable ratio for the Council to fully manage the properties, never mind check them out. I think we need to look at the Council’s numbers and start asking some difficult questions. Finally, how does this fit with “Better regulation” principles of being targeted and proportionate?

From: Reality check 23 July 2018 08:07 AM

Disagree. Unqualified unregulated agents will drop away, at last. Competent regulated agents will acquire their stock, through acquisition or just winning the business. How does getting rid of the non-quals cause a drop in standards? There’ll be more business for the responsible agents. And getting qualified isn’t hard if you know what you’re doing. And if you don’t, you shouldn’t be responsible for people’s safety and assets.

From: Reality check 06 April 2018 09:14 AM

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