LUVTHECITY INTERVIEW - 12.04.10
AFTER LAST WEEK'S DECISION BY THE GOVERNMENT TO INTRODUCE COMPULSORY PLANNING PERMISSION FOR SHARED HOUSES, WE TALK TO THREE LEADING ESTATE AGENTS AND ASK THEM TO ASSESS THE IMPACT
HOW DO YOU FEEL THE GOVERNMENT'S INTRODUCTION OF COMPULSORY PLANNING PERMISSION FOR HMOs WILL AFFECT THE INDUSTRY?
Glynis Frew Well apparently it's been introduced to protect communities and to control student areas although it would have been simpler just to limit the number of HMOs in an area. But instead this legislation totally reclassifies the definition of a HMO. Three unrelated people sharing a property will now be classed as a HMO and Landlords will need planning permission if a property is going from a family renting to three people sharing. I think it's a crazy idea and I could go on and on (and you'd have to stop me!) so I'll try and limit myself to four main reasons:
1. Only one of the six councils we contacted understood what it was about. The remaining councils didn't understand the legislation and not one had any guidelines as to how to implement it, let alone police it
2. Why did the government push university education if they don't want students living in those areas? Doesn't anyone think in a circle?!
3. The private rental sector houses 8m people (more than the government could ever do!) and the government wants to encourage new Landlords to help cover the housing shortfall and wonder what they can do about it – well reducing mindless red tape would be a start!
4. Just because three people share a house does not automatically mean they are either undesirable or students – lots of professional people share!
Will Linley It’s a nonsense and can only serve to either deter landlords from entering the market or encourage existing ones to avoid letting to sharers. With the exception of a few cities across the UK, where no doubt there is a problem with over intensity of student housing, there is no requirement for this degree of over-regulation. Landlords who would previously have offered houses to either sharers or families will now limit their properties to families, which will ultimately result in a shortage of housing for professional sharers. It's regulation gone mad. The Conservatives are talking about rescinding this regulation – bring on the election!
Wendy Wood The introduction of the new C4 class will create yet another negative impact on an already crisis ridden housing market. Many potential tenants share property as a way to spread the financial costs in order to save deposits. Landlords may choose instead to let their properties to a small “family” unit instead of sharers, which will hit the market even more. This imposes further financial burdens on landlords who are already feeling the pinch as there will be a fee to pay and an estimated 8 week wait to obtain permission! This undoubtedly will affect the amount of property available to let as some existing or potential landlords may feel it's just not worth the hassle
THE RLA HAS BEEN CAMPAIGNING HEAVILY AGAINST THE PROPOSED CHANGES, DO YOU THINK THEY WERE RIGHT TO PETITION THE GOVERNMENT?
Glynis Frew Yes I do think they’re right to petition the government, there was no consultation on this at all. This, if and when implemented, will have a massive impact on the market across the country – not just in University or College areas. More expense and reduced ROI will make some Landlords pull out and it could drive rental prices up for tenants – not a big idea
Will Linley Yes, the RLA were right
Wendy Wood YES! They assess tenants situations every day so are well-qualified to offer their opinion due to their levels of knowledge and experience
MANY LANDLORDS AND TENANTS FEEL THE GOVERNMENT'S TENANCY DEPOSIT SCHEME IS CUMBERSOME - DO YOU AGREE?
Glynis Frew You can understand why tenants want to know where their deposits are and that they can get them back at the end of their tenancy if they have been good tenants. There are lots of examples of unscrupulous agents and landlords, so I do think people should have some protection. However, this legislation though does not change or bring to heel those type of Landlords or agents, what it has done is add another layer of costs and bureaucracy. It tends to have affected Landlords in the pocket more that tenants though as recent statistics I have seen suggest that a tenant is three times more likely to get the full deposit back than a landlord in a dispute situation
Will Linley Like most ARLA agents, we use The Dispute Service (TDS) for registering our tenant’s deposits. The TDS has become overwhelmed with disputes and consequently have had to increase their charges significantly to their member agents – 800% increase in our case. The increase in disputes was in my opinion inevitable. All the while the service is free to tenants, they’re bound to dispute deposit deductions. The rules of the tenancy deposit schemes are flawed and unless they introduce a way of deterring disputes (introduce a charge to tenants/landlords or a minimum disputed amount?) then the schemes will continue to be over-burdened and struggle to deliver a good service
Wendy Wood I wouldn’t use the word cumbersome. We have experienced delays in responses to disputes at times but a scheme that in effect is free to the landlord and tenant was always going to be overwhelmed with claims particularly in the current economic climate
DO YOU BELIEVE LANDLORDS SHOULD TAKE OUT INSURANCE TO COVER UNPAID RENT?
Glynis Frew Neither a tenant nor a landlord can do better than going to a reputable agent. The tenant is safe knowing that s/he will not be subject to a landlord’s whim or false promises and a landlord will have the security of know that the agent will make sure that all prospective tenants have been referenced. This last point is so important. Most tenants are good tenants but some do fall on bad times and that’s when a rent guarantee policy really helps. You can soon lose a boat load of money through unpaid rent if you “do it on the cheap!”
Will Linley A good agent, selecting good tenants is the best safeguard for any landlord, but rent guarantee is nevertheless a good belt and braces option for any landlord, particularly if he’s operating in an area where a good quality tenant is hard to come by
Wendy Wood Insurance is a good idea for those landlords who cannot afford to be without their rent and unable to afford legal costs. Professional agents do carry out stringent referencing checks however these checks cannot anticipate changes of circumstance such as redundancies, couples separating etc. It’s in the interests of the managing agent to be effective rent collectors (and where necessary debt collectors!) as the agent does not got paid if the rent is not received
YOU'VE RECENTLY SET UP A REGIONAL A.R.L.A GROUP - WHY DID YOU DO THIS?
Glynis Frew ARLA stands for standards within our industry and we are all committed to upholding those standards and where possible even surpassing them. It’s tough sometimes so it’s great to be able to share best practice and keep up to date with changing legislation. ARLA head office is a long way away and our group allows us “think local”
Will Linley Every other area in the UK has an ARLA regional members group, so it’s about time that the Yorkshire region got some representation too
Wendy Wood The lettings industry is very demanding and legislation changes constantly. This new group gives professional, like minded agents the opportunity to keep ourselves up to date on any changes and to share our knowledge and experiences with each other in order to maintain the high standards we set as ARLA licensed Agents
WHAT ARE YOUR PLANS FOR THE GROUP AND IS ANYONE INVITED TO JOIN?
Glynis Frew Don’t you get fed up of being the person or the group of people that comply and yet always seem to be the ones that get penalized? Well we do! The needs of both markets are similar but different too. We are all experiencing increased costs and mounting legislation that we, as reputable agents, do our very best to understand and comply with – no matter how complicated it gets! But other agents are not playing by the same rules and we want the customers to know that they should be dealing with agents like us – not the fly-by-nights. I had a case recently where a landlord wanted to change from a non-ARLA agent to us. That agent would not release the deposit to us nor could we get the correct keys. The landlord was distraught – we managed to sort it out for him in the end but it could have cost him more than £1,500. Tenants talk about landlords not fixing things for them and living up to promises, so we want our customers to know that ARLA registered agents are best. Secondly we want councils to understand the impact of the changes they plan to implement and thirdly we're looking to share best practice and training methods so we're not just upholding the standards but driving them forward. And as long as an agent is ARLA registered they'd be very welcome to join our group. We may all compete with one another - but we do it with honour!
Will Linley We’ve set up the group to share views and raise the profile of ARLA agents and the benefits to landlords and tenants of using a professional agent. Any ARLA registered agent can attend although ARLA membership itself is strictly limited to agents who meet the criteria and adhere to their code of conduct
Wendy Wood Our group consists of ARLA members who are looking to ensure we're well-equipped to protect our client’s interests, as well as raising standards within the industry. All too often we read about unqualified agents who have absconded with clients money or kept tenants deposits and we want to reassure both landlords and tenants that not all agents are the same
LINKS
ARLA Click here
RLA Petition Click here
No.10.go.uk Petition Click here
Facebook Student Action Group Click here
Official HMO guidelines Click here
Tenancy Deposit Scheme Click here
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Glynis Frew is Director of
Hunters Property Group
Will Linley is Director of
Linley & Simpson
Wendy Wood is Lettings Director of
Manning Stainton