Landlords – fit and proper people?
Landlords may have to be deemed “fit and proper” before being allowed to let properties in the private sector, according to a new government-commissioned report. The report by the Law Commission outlines that Landlords in the future may have to apply for a license before renting properties.
The proposed changes aim to help people living in below-standard accommodation who do not have the money to pursue action against landlords through the courts. A regulatory shake-up is widely seen as important during an economic downturn, when less people can afford to buy houses and are turning to renting.
The report comes at a critical time for Sussex students, as our landlords can now charge up to £90 a week, as outlined by the University’s regulations. The student lettings market in Brighton is booming, with a 50% increase in the number of student properties over the last 4 years.
Sussex’s housing office currently works under an accreditation scheme whereby the University rewards landlords who are in accordance with all their regulations by letting them charge more per room per week, providing they have a valid certificate of accreditation.
If the licensing scheme is enforced, all landlords, whether recommended by an institution or not, would have a strict set of regulations for their properties.
Richa Kaul-Padte, Welfare Officer for the University of Sussex Students’ Union (USSU), said in response to proposed licensing: “This is exactly what we have been urging the universities and [Brighton and Hove] Council to enforce – stronger, stricter accreditation laws. With students all across Brighton living in sub-standard accommodation that is often in violation of HMO (Houses of Multiple Occupancy) regulations, there is increasing discontent from the local community. Mandatory licensing for landlords will allow the rights of students to be protected during what is already a very volatile situation.”
The housing minister, Margaret Beckett, also praised the report, adding: “Whilst the majority of people are satisfied with their experience of renting, there is still much more to do to protect the most vulnerable tenants from the minority of unscrupulous landlords.”
“[This] will allow the rights of students to be protected”
With the introduction of a licensing scheme it is hoped that landlords will be unable to abuse their positions of power. The suggested form of licensing would mean that they would have to be deemed “a fit and proper person”, which the report outlines as someone who has not previously broken housing regulations.
Stricter regulation should mean that tenants have a more secure form of letting, knowing that there are certain things a landlord would be obliged by law to do. To breach these terms or regulations would mean, in the most extreme cases, a prohibition from letting altogether.
Toby Hamilton, from MTM Property Services, a local student lettings agency, says he “whole heartedly embraces the new plans”, but that “Looking at the bigger picture, looking at the credit crunch … [the implementation of licenses] won’t help the recovery of the housing market … none of us need unscrupulous landlords, they give landlords and letting agents a bad name.”
The report does express certain fears that the costs of the implementation of these recommendations could damage the already diminishing housing market. It comes at a delicate point in the “credit crunch”, when attempts to stabilise the market have proven largely unfruitful.
The report dismissed an alternative system based on “self-regulation”, where particular organisations or “schemes” would be responsible for making sure landlords are maintaining the required standards. In practice the report says that such schemes might not have the authority to effectively enforce regulations.
The report says that enforcing the recommendations would improve the reputation of the private sector and lead to “greater investment”. It also argues that increased reputation would create competition and should lead to better standards of housing.