Landlords will have to join a redress scheme or face a fine of up to £5,000

The National Landlords Association Director of Policy and Practice Chris Norris reassures members they won’t be facing greater headaches after the Government confirmed landlords will have to join a redress scheme or face a fine of up to £5,000.

1. The issue: The Housing Complaints Resolution Service

Summary: 

Currently, landlords are not required to register with a complaints system. However, Communities Secretary James Brokenshire has announced that private landlords will be legally required to become members of a redress scheme, or face a fine of up to £5,000 if they fail to do so.

The new Housing Complaints Resolution Service will be developed with a redress reform working group made up of representatives from across the sector, working with the industry and consumers to make it easier for people to claim compensation. No date has been set for the introduction of the new rules. 

NLA view:

The Government has taken almost a year to confirm its plans for a private landlords’ redress scheme, but ministers are going to form a working group first to delay the introduction of the new measure for a little longer.

We understand that no landlord wants to face yet more costs. There is unease among landlords who are aware of this scheme, but we want to allay members’ concerns. We are dealing with this process and will be well prepared for the introduction of this scheme when the Government decides to act.

Landlords don’t have to do anything yet. We are working closely with the Government and the wider industry to make sure that all NLA members will be covered.

In 2017 we were asked to design a service, so we have a product already. Of course, we don’t yet know what the Government will require, but we are well advanced in dealing with this issue.

2. The issue: Rent controls for London

Summary:

Ahead of his 2020 re-election campaign, the Mayor of London, Sadiq Khan, is to develop a new blueprint for “stabilising or controlling private rents in the capital, as part of his ongoing work to help London’s 2.4 million renters”. Khan has long argued that the Government should overhaul the laws for private renters so that he can implement rent control in London himself.

NLA view:

Social housing has been in decline for some time, plus we have a general housing shortage, meaning more and more people have no option but to turn to the private rented sector for a home.

Despite this we have to push back on Khan’s decision to highlight outdated rental data as a reason to develop a “blueprint for stabilising rents” in the capital. His announcement justifying the decision was based on rent data for 2005 and 2016. According to his own housing data, private rents in the capital have dropped consistently from 2016.

In the year to July 2018, private rents in London fell 0.3 per cent, compared to an average increase in the rest of England of 1.6 per cent. When adjusted for inflation this equates to a real-terms fall of around 2.25 per cent. So, by all means, stabilise rents, as long as that stabilisation works whether rents are rising or falling.

Artificially suppressing rents sounds like an easy solution, but it would be counterproductive and fails to address the root causes of a lack of affordable housing. 

In fact, history shows that rent controls stifle the supply of housing and reduce the money available to a landlord to maintain their properties; that benefits no one.

The only real solution to the UK’s housing problem is to build more homes while bolstering economic growth. The emphasis should be on encouraging more housing in all tenures from a more diverse range of investors and providers.