Given the raft of legislative changes that have been introduced in the last couple of years in the UK’s rental market, the government-imposed punishment for rogue landlords that has recently come into force is a positive step towards ensuring a fair market place.
In essence, the measures that have been set out will enable local councils to cover the costs of more efficient and effective management of rogue landlords operating within their area. Penalties of up to £30,000 can be issued, with the income raised from these penalties being ring-fenced for further investment in enforcement activity.
This seemingly positive step highlights that calls for greater enforcement from both accredited agents and ARLA Propertymark, the professional body, are being heard. In reaction, David Cox, ARLA Propertymark chief executive, said, “While we are pleased that the government have been persuaded by our arguments, the responsibility now falls to local authorities to use the tools at their disposal to raise standards”.
As with any new measure that is introduced, these changes raise as many questions as they do answers; on the face of it, this initial measure could be perceived as lightweight. One issue it faces is the possible inconsistency in the enforcement of penalties from one council to the next due to the lack of a central initiative. Although the funds raised can be re-invested over time, the issue of resourcing the enforcement of penalties is also an issue for councils in the short term.
The overarching question is whether enough is being done to protect tenants and promote good landlords. Later this year, the government plans to phase-in banning orders and a criminal database of ‘rogues’.
However, as the database will not be publicly accessible, tenants will not be able to identify suspected rogue operatives, meaning that councils are solely responsible for preventing them from operating in the local PRS market. Making this information public would go a long way to helping protect private tenants.
Longer term approach
Further support is also needed for landlord accreditation schemes. Current schemes are not centralised and rely on being managed by council partnerships and private landlord organisations.
The volume of recent legislation has added significantly to the complexity of the accreditation process, which is in danger of acting as a deterrent to accredited landlords rather than rogue ones.
As part of its mission to ban rogue landlords, the government will need to foster an increasing number of trusted private investor landlords, in addition to institutional investors, in order to hit its ambitious and much needed targets of new housing availability. Backing their accreditation and identifying rogue landlords to tenants would reinforce these introductory financial penalties, increasing trust in the rental market.
Clearly the onus in the short term is now on the local councils. However, the longer term approach requires a combined effort from government, professional bodies and agents to identify further measures to protect tenants and encourage good, trustworthy landlords to invest in the housing market.