The Secret Behind the Big Society of Landlords

The Secret Behind the Big Society of Landlords

neighbourhood watchAs Landlord Referencing Services LLP looks forward to attending the very first National Neighbourhood & Home Network Awards 2013 next week, we would like to look at the top 5 reasons why landlords and letting agents who use Network Referencing are fast becoming the “Gate-Keepers” to safe & happy communities, alongside charitable organisations such as our partners Neighbourhood Watch.

Last week saw David Cameron relaunch his often-mocked “Big Society” with a £250million fund (available until 2020) to help locals rescue bars, shops and swimming pools.

Landlord Referencing Services LLP also launched its own “Landlord Big Society” back in 2010, and has been growing in size and presence ever since.

With today being the start of National Neighbourhood and Home Watch Week (15th-23rd June 2013), below are the top 5 reasons why landlords and letting agents are turning their backs on a “totally farcical, draconian, biased and not fit for purpose” housing system and taking matters into their own hands; simply by Network Referencing with their fellow landlords (at a national scale) they can provide good tenants with the best properties and treat their bad tenants accordingly.

1. An onslaught of bad legislation is about supporting one another in an industry which is getting crucified and buried by more and more ill-thought-out legislation every day. For example:

  • Selective/Additional licensing.
  • Deposit bond schemes; only protecting the tenant and not the landord.
  • Green deals; only affecting tenanted properties to meet EU targets.
  • Eviction laws; making a landlord a criminal if he stops a service the tenant is not paying for.
  • Harrasement laws; where it can be seen that even if a landlord asks for the rent arrears too many times is a criminal offence.

IS IT FAIR that a tenant can fail to pay the rent and damage a property and a landlord can only take this as a civil offence but if a landlord throws the tenant out it is an illegal eviction?

IS IT FAIR that we have an independent civil contract between two parties yet one party is supported by the criminal justice system and the other by the civil courts?

IS IT FAIR that one side is able to claim legal aid paid for by the tax payer and the other forced to pay out of their own pocket even if the fault lies solely with the tenant?

Landlord Referencing Services DO NOT BELIEVE THAT THIS IS FAIR OR EQUAL, and if you follow the OFT’s (Office of Fair Trading) principle guideline then you will also agree that this is not equal; as their principle guideline is that a contract between two parties should be fair and equal in balance.

So why does this not apply to a private rented sector tenancy agreement ? ? ?

2. The press

This week the BBC & Shelter have been renewing calls for an end to letting agency fees, as Shelter’s latest investigations reveal that agency fees could be pushing renters into more debt… read on.

‘What sensationalist research!’ said one Network Referencing Letting Agent.

‘Perhaps it is time that Shelter put their money where their mouth is. What is stopping them buying/building property to house these poor, hard done by tenants that they have found?‘ asked another Network Referencing Letting Agent.

The Labour Parties latest Policy Review also explores new ideas on the private rented sector to “drive standards up and bad landlords out.” 

We all know that when it comes to getting political party votes it is not about logic and long term succesess of the PRS – it is simply an exercise in bashing landlords to get tenants votes.

These “new ideas” include creating a national register of private landlords, a new national private rented property standard, stamping out the use of “retaliatory eviction” against tenants who complain about the conditions of their property, greater powers for local authorities and tougher sanctions for bad landlords – including the potential to strike off criminal landlords.

Not once throughout this whole “review” have the Labour Party addressed the £1 billion of housing benefit a year that DOES NOT get to the landlord, and instead subsidises pay day loan companies, pubs, bookies, massage parlours, Sky TV, etc…

Don’t get us wrong, LRS wholeheartedly welcome tougher sanctions for the minority of bad landlords operating out there – but that is our point; IT IS A MINORITY – and the majority of good landlords out there shouldn’t have to suffer the antiquated way in which the gutter press wrongfully portray landlords primarily to sell tomorrows chip paper.

Therefore more and more landlords and agents look to our unique Network Referencing services as we lead the fight together against an unjust stereotype that all landlords are “Rachman” type characters.

Landlord Referencing Services agree that the private rented sector has an exceptionally important role to play in meeting housing need, but believe that the issue of “bad tenants” operating at a nationwide scale running up excessive rent arrears & property damage is a much worsening problem and strain on the taxpayers purse than the minority of “bad landlords” out there.

3. Increasing rent arrears

What with Universal Credit on its way, Landlord Referencing’s exclusive Tenant Alert Rent Default data from Jan-April 2013 standing at £350,500 (more than one third of the total that was recorded for the whole of 2012 at LRS) AND the latest Tenant Arrears Tracker via LSL Property Services shows the number of renters more than 2 months behind on payments rose by 4,000 to 94,000 in the first quarter of 2013 (an increase of nearly 5 %) is highlighting the fact that something desperately needs to be done about the ever increasing issue of massive rent arrears that more and more landlords are having to deal with on a daily basis. 

Rent arrears are the biggest problem to any landlord and can destory a property investors business, family and pension yet the Government does nothing to help.

Can you imagine if we all bought stocks and shares and never bothered to pay for them on settlement day?! It would inevitably result in the collapse of the stock market, yet our Government thinks it is perfectly OK for a tenant not to pay their rent and for landlords to have to foot the bill by having to spend thousands of pounds as well as wasting their time with months of court action to get the non-paying tenant out.

4. Universal Credit

It was announced in the middle of last month that pilot projects for the Government’s universal credit “flagship” scheme had been extended for 6 months after teething problems over the effect of paying housing benefit directly to social tenants rather than directly to landlords.

As a private landlord, letting agent and/or tenant it is extremely important to understand that Housing Benefit is currently paid to the landlord, but this option will be abolished under Universal Credit; primarily because ministers believe it will help tenants manage their finances better.

MPs have also raised concerns that the welfare shake-up will leave the benefits system more vulnerable to fraud, with changes to IT fraud prevention systems and a possible exodus of experienced staff. At Landlord Referencing we believe tenants should have the right to decide if their rents are paid directly to their landlord – to help those on low incomes avoid debt and arrears.

The first group of Torfaen tenants selected for the trial in South Wales saw their total arrears rise from around £20,000 to nearly £140,000 in the 7 months from July to January, via Eye on Wales research.

In the news this week a mechanism to automatically recover rent arrears was announced to be introduced alongside the direct payment of housing benefit to tenants. Details released by the Government explain that under its universal credit reform landlords will be able to contact the Department for Work and Pensions to request benefits designed to cover housing costs are paid to them once a prescribed level of rent arrears is reached. At this point the department will also start to recover the arrears by docking universal credit payments.

Landlord Referencing Services still remain sceptical because like all Governement policy seeing is believing, and we are firm believers that when it comes to politics only ever believe half of what you see and none of what you hear…!

Therefore, until the same concessions are granted to England, Wales and Scotland – Northern Ireland Minister wins welfare reform concessions – Landlord Referencing Services believe that the only true way to be able to reduce the amount of tenants in arrears and at the same time protect good tenants from bad neighbours is for all UK landlords to Network Reference with one another.

5. Working alongside partners such as Neighbourhood Watch.

With everything LRS are doing on the front line to make the PRS fairer and everything us and our ever growing community of landlords and agents are doing to prevent each other from taking one anothers bad tenants and families from hell, as we grow we are stopping these people from entering our communities. And if they do manage to get in then working with the “Wardens” (Neighbourhood Watch) we really are the perfect team of Gate-Keepers and Wardens.

Author: News @ Tenant Referencing

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