The media is currently littered with stories of rents rising, to the extent one would think they had double over night!  Whilst, I’m sure some areas may have seen dramatic rises in rent such as the South East and London, many more areas are only seeing a minor “correction” in rents which has been long overdue.

Over the years multitudes of legislation (mostly ill-thought) has been thrown at landlords.  This legislation may not have resolved any issues, but it has certainly resulted in extra costs for legitimate landlords.  Take the Tenancy Deposit Scheme (TDS), such schemes have insured that landlords rarely receive the actual costs of the works they carry out in-between tenancies.  For example, if a tenant has marked a wall, the landlord will NOT receive the costs of repainting that wall, only a minor adjustment for the mark itself.  Back in the real world a landlord will have to find a decorator willing to come in to paint one wall (good luck), or usually end up painting the entire room so that the different ages of paint correspond.

The landlord needs to recoup this shortfall somewhere, and that somewhere has to be increase rent for every tenant.  This is just one example of legislation that has increased the total costs for landlords.  Other legislation includes selective licensing, health and safety legislation, energy performance certificates.  All this legislation costs money and therefore rents have to increase to take account.

In conclusion rents have remained static for far too long, whilst the costs of being a landlord have increased.  It was only a matter of time before the increased costs resulted in the necessary increases in rent.  Whilst increased legislation isn’t the only reason rents are rising, demand is also increasing due to banks reluctance to lend to first time buyers, it is factor that landlords must consider when setting rents.

Governments need to think carefully before introducing legislation that ultimately benefits neither landlords or tenants and increases the costs to everyone in the form of red-tape.

Dispatches ran a disturbing programme recently on Slum Landlords.  I’m sure anyone watching the programme would have been disgusted and shocked at the condition of homes some tenants have to reside in, sadly, although disgusted, I am not shocked.  This Government, and previous Governments’ policies (or lack of)  positively encourage such landlords and their behaviour.

For example, to date anybody can set up a Lettings Agency tomorrow, without any qualifications, or without any insurance protecting Client funds (such as landlord’s rent).  This has resulted in landlords losing thousands of pounds if their Agency goes bump, often without knowing they are exposed to any risk.  Why has it taken so long for any UK Government to insist that Letting Agents must be member of a qualified body such as ARLA (Association of Residential Letting Agents) or RICS (Royal Institution of Chartered Surveyors) or other recognised bodies?  In addition every Lettings Agent should insure all Client funds.  If a bank goes bust you wouldn’t expect to lose money (though it can happen in extreme cases), likewise if a Letting Agent goes bust you shouldn’t lose money either, period.  (PAD4U is ARLA licensed and Client Funds are insured).

Of course there are landlords who do not use Letting Agents, which is right and proper they have this choice, but they ought to be licensed by local Councils.  Landlords should meet a minimum understanding of tenancy law (and this should be tested), before they are able to let out a property without the aid of a qualified agency.

However this doesn’t explain the poor condition of property, this is due in part to the present Government failing to keep it’s promise to overturn a policy implemented by the last Labour Government in regards to Housing Benefit.  Previous to the last Labour Government, Housing Benefit rent was paid directly to the Landlord, this ensured the following: tax payers money which is meant to pay for rent actually pays for rent (this is incredibly important point – it is not the Government’s money, nor the tenants, it’s is the tax payer’s money, and due care and attention should be made that it meets its intended purpose in society), secondly, even if a tenant has other debts which may automatically be taken from their bank account, their rent money is safe , they would always have a roof over their head, because their rent was paid automatically.

The reason such a policy results in sub-standard housing is because “good” landlords that ensure their property meets (and exceeds) all standards set, will insist they receive a fair market rent for their property. Due to the above policy “good” landlords or agencies for that matter cannot afford to take the risk on Housing Benefit tenants.  So Housing Benefit tenants have no choice, but to fall into the hands of “Slum Landlords”, who will happily take the risk of not receiving rent, because they are happy to throw tenants out, and spend no money on the property whatsoever, so they will always make profit regardless.

So much is obvious.  However, what baffles me is why all Governments seem complicit in this inevitable outcome.  Perhaps, because they can lay the blame at “Slum Landlords” rather than themselves, or because it can potentially save money.  But it is shameful that such an affluent country has it citizens living in squalor, or that millions are still awaiting a home.  Intelligent Government policy should ensure “good” landlords and good agents can operate and that “Slum Landlords” cannot.  Shelter and other charities work hard to help those people unfortunate enough to be in this position, but it is the Government who are ultimately responsible for housing its citizens.

David Boyd, Managing Director, PAD4U Estate and Letting Agents Manchester writes:

Voids are the Black Holes of property investment, they will suck out your yields and chew them up!  So, although with a great managing agent by your side this post is likely to find you sipping a mai tai in a sun-lounger, when we call to say your tenant has given notice, it’s time to take decisions quickly!

PAD4U are very aware of the hidden dangers that voids present.  Whereas maintenance issues are usually very visible in terms of outlay, voids eat away at your return on investment quiety, but they can be a far bigger danger.  So when we hear a tenant is leaving, we will inform you, and we will also book a pre-vacating inspection at least 2 weeks before your tenant actually vacates the property.

At the pre-vacating we will assess whether the property can be marketed immediately and , if so, we will swing into action and start marketing your property with the aim of securing a tenant just as your previous tenant is vacating.  If the property requires minor updating, or even major updates (say if you have had a long term tenant), we will call you to let you know what will be required (although  not a full inventory), it’s a useful heads up to get work scheduled in as soon a your tenant vacates the property.  PAD4U are FMB MasterBuild and TrustMark approved and we can arrange for qualified and insured contractors to complete the works quickly and to a high standard.

It always amazes me that some landlords will try to save money on contractors to carry out works themselves, but take many months to complete the required works.  This is a false economy and your property is losing money every day it is not tenanted.  Not only this, but you are leaving your property insecure and more likley to be broken into. Other landlords await the resolution of TDS disputes, but this can take weeks, meanwhile you are already losing £££s.

The moral of the story is simple, PAD4U aim to ensure voids are kept to an absolute minimum, but we need your help.  If works are required, it pays to get the work done quickly rather than cheaply, as cheaply may end up costing you a lot more money.  I guess it’s proves the old mantra, that time is money.