The recent announcement by Communities Secretary James Brokenshire of yet another protective agency for tenants has not gone down well with private landlords. The government is the process of creating a “housing complaints resolution service” which private landlords will be legally obliged to sign up to. This redress scheme will allow tenants to ensure their complaints are investigated thoroughly where they have been unable to reach agreement with their landlord. However, what about the right of landlords?
Is it all about compensation?
When a government minister announces a scheme to assist tenants with complaints against landlords and mentions “compensation” it shows the side the authorities are on. It is plain for everyone to see that the private landlord has become something of a political football in recent times. Criticised then cast as the devil incarnate they have seen a gradual increase in their costs and erosion of their long-term investment returns. Is it any surprise that many private landlords are considering leaving the market?
Replicating the managing agents scheme
While this move to introduce yet another layer of cost has attracted significant criticism, it does place private landlords on the same level as managing/letting agents. An identical scheme has been in place for some time for managing agents which obliges them to join a government authorised redress body. The fact that many managing agents and private landlords previously had formal/informal complaints procedures in place seems to have been ignored.
What does the government hope to achieve?
Looking at the situation from a distance, taking into account stamp duty increases and the tapering of mortgage interest relief, it is difficult to conclude the government is supporting private landlords. There has long been a growing concern that the government would rather the buy to let industry was dominated by large corporate players as opposed to private landlords. This would make it much simpler to police and introduce a more business-like approach to the sector. Well, this is probably what the authorities would like you to believe!
Compassion and respect
If you review the UK government’s comments and actions in relation to private landlords over the last few years, there seems to be one common thread. There seems to be an ongoing indication that landlords and tenants generally have a troubled relationship with a lack of compassion and respect. If the authorities took the time and effort to speak to private landlords this belief would be shattered. The vast majority of private landlords have a heart, are compassionate and respectful towards their tenants and more often than not this is reciprocated. So, why is the UK government looking to cause a fight were generally there is no trouble?
Private landlord bodies have reacted furiously to the government’s new initiative. The addition of yet another layer of cost and bureaucracy to the buy to let market will eventually filter through into higher rents. As rents move higher, due to ever increasing government charges, private landlords will likely be criticised and rebuked by the politicians. This then offers the opportunity to “champion the cause of tenants”, increasing charges again and the vicious circle begins. Amidst all of this criticism of private landlords it is easy to forget there is a shortage of private rental accommodation in the UK. Why would the government bite the hand that feeds it?