Greater enforcement of regulation is the only way to bring trust back

Asaf Navot

April 6, 2020

Asaf Navot is the chief executive at Home Made

There‘s a new wave of renters. They’re not renting because they’re struggling to get a foot on the ladder – they’re renting through choice, to enjoy the flexibility and increased purchasing powerthat renting provides them.

While this movement means the demand for housing, particularly in the capital, is consistently increasing – increased regulation has driven up costs, in some cases pushing out compliant landlords.

Meanwhile, a lack of enforcement means that bad players are left to continue renting properties that are not up to standard. This undermines the reputation of our industry as a whole, and cannot continue.

If we are to embrace this new generation of renters, renting has to be a lifestyle choice people can trust – and to create trust we needenforcement of regulations.

To be, or not to be, compliant?

While critics often claim that the private rental sector is under-regulated, the reality is that over the past decade regulation of landlords has increased by 32%, while funding for enforcement at local councils has simultaneously decreased. Regulation is vital but, it’s pointless without enforcement.

More regulation without enforcement is leading to the radicalisation of landlords’ approaches to letting. Good landlords suffer from the rising costs associated with making sure they’re compliant, so their profits go down and rental properties become a less attractive investment.

And Bad actors ignore regulations altogether, and market unsafe and non-compliant properties at a profit – even increasing the size of their portfolios.

Without action, this will continue to negatively impact both renters and compliant landlords, creating subpar housing that drives down investor profits and public trust in renting. Enforcement will drive bad landlords and properties out of the market, while increasing professionalism and trust in the industry.

Enforcing enforcement

Local government councils are at the forefront of enforcement – but it’s clear they just don’t have the funding or the time to police compliance and safety standards. In fact, recent data showed that only 292 fines were issued against rogue landlords across 17 London councils last year.

It’s our belief that responsibility for enforcement should be removed from local councils and a governing body dedicated solely to the monitoring and prosecution of non-compliant landlords should be created in its place.

A reasonably priced landlord license and costs recovered through penalties could be used to finance an enforcement authority. Through this body, both tenants and landlords could directly report regulation breaches to be investigated and ultimately enforced through the application of penalties.

While, a few London boroughs operate mandatory licensing schemes for private landlords the requirements are poorly advertised and the costs very expensive. Instead, a centralised enforcement body could likely run the process more cost effectively and to a higher standard.

However, if enforcement is to remain in local council’s power, they must embrace the most valuable tool at their disposal – data. By bringing all landlord licensing data together, this will give both tenants and councils a simple way to check if a landlord is meeting their obligations – and start to build up a record of offending landlords across boroughs.

By operating a standardised mandatory licensing scheme for all private renters it would become easier for local councils to keep tracks of rogue landlords and implement penalties.

All interactions, paperwork and property details, could be recorded and logged on a shared system where it’s easily to ensure compliance and deliver penalties.

Ultimately whatever the route, to create a sustainable and healthy letting industry with longevity enforcement has to be a priority. Failure to do so will penalise compliant landlords and give bad actors free rein of the market.

Sign up to our daily email