CHALLENGES FACING THE PRS: CAROLYN UPHILL

WINTER 2015

AGENDAChallenges facing the PRSCarolyn Uphill (NLA)

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THE NATIONAL LANDLORDS ASSOCIATION

• The UK’s leading representative organisation for private residential landlords• Working with 62,000 landlords of which

29,000 are full paying members with access to our Advice Line & Tax Investigation Insurance • Providing information, advice and services to

support their businesses• Campaigning to influence policy and to make the

landlords’ voice heard• Working to raise standards in the private

rented sector and ensure landlords are aware of their rights and responsibilities

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THE ROLE OF THE PRIVATE RENTED SECTOR

• The PRS is vital to the UK economyAccording to the 2013-14 English Housing Survey

Now Providing 19% of All homes

Nearly 30% in London and growing rapidly

4.4 million homes - more than the whole Social Sector at 3.7million – up from 4 million in 2012-13

Housing nearly 11 million people

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HISTORIC ANALYSIS SHIFTING TENURE

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NOT JUST FOR THE ‘YOUNG AND TRANSIENT’

THE CHANGING CUSTOMER

1970s

1980s

1990s

2000s

2010-20s

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CHANGING DEMOGRAPHIC OF RENTERS

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Source: Who Lives In The Private Rented Sector; BSHF 2013

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Have You Ever Asked For A Longer Term?% Response

Yes - agreedYes - refusedNo - always been happy with term offeredNo - never felt com-fortable negotiatingOther

5%

11.5%

Source: NLA Tenant Index Survey Q3 2013

56%

19%

TENURE LENGTHS TO SUITE MOST TENANTS

Average Tenancy 3.5 Years – Source English Housing Survey

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PRIVATE RENTED SECTOR IS VITAL TO THE ECONOMY

Not only providing homes but:-

Spending on Repairs, Refurbishments, Agents Fees, Advertising, Suppliers

Paying VAT on those Services & Supplies

Paying Stamp Duty on house purchases

Paying Taxes on any rental profits

Paying Capital Gains Tax even though for other purposes we are treated as a Business

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SO WHY IS THE PERCEPTION THAT ALL LANDLORDS ARE BAD?

The Minority get the Sector a Bad Press

The Media Pick Up on the Worst Cases Rogue Operators / Poor Conditions / Illegal

HMOs Exposés – Insatiable Need to fill air time

Channel 4 Dispatches BBC – The Housing Enforcers Vulnerable / Tenants with Chaotic Lives

Homelessness / Illegal Immigration Provide Vulnerable Clients for the Opportunist

Beds in Sheds / Overcrowding

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THERE IS NEWS OF IMPROVEMENT

According to the 2013-14 English Housing Survey: Overcrowding in the PRS is 5.% – down from

6% in 2012-13 There are 29.8% Non-Decent Homes in the

PRS – down from 33% in 2012-13 without the subsidies provided to the Social Sector to achieve this

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BUT PRS FACES SERIOUS CHALLENGES

According to the 2013-14 English Housing Survey

32.3% of Properties in the PRS are pre 1919 - this compares with only 7.3% in the Social Sector

These homes are usually hard to heat which is reflected in that 10.6% of PRS homes have F&G EPC ratings – these can’t be let from 2018!!!

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GOOD LANDLORDS – THE UNTOLD STORY

These problems and the criminal minority get our Sector a Bad Reputation

No tenant ever goes to his MP / Councillor to say

“I have a great landlord / wonderful home”

The picture they get is of poor accommodation, unresponsive landlords and hard done by tenants – never the reverse

Perception is everything!

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GOOD LANDLORDS – THE UNTOLD STORY

• Hence since August we have had:DCLG Discussion Paper‘Tackling Rogue Landlords & Improving

the Private Rented Sector’The Housing & Planning BillGoing through ParliamentNLA gave evidence last week

• Impact Assessment:

Case study: Lewisham

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THE MAJORITY ARE GOOD LANDLORDS?

• 84% Tenants are Satisfied with their Landlord – EHS as quoted in Aug 2015 DCLG Consultation Doc• The ones who Recognise that Successful Letting

is achieved by the Landlord & Tenant in Partnership

Landlord Acts Professionally High Standards of Accommodation and Back Up

Tenant Treats the house as their home – takes care of it Pays all the Bills / Rent Promptly

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THE GOOD LANDLORD RECOGNISES THAT IT IS…

My House (Investment) Your Home

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GOOD LANDLORDS ARE PROFESIONAL AND BUSINESS-LIKE• Recognising that there are

• Rules & Regulations (over 50 Acts & 70 Regulations)

• 8 more in 2014 incl. Immigration Bill

• Yet more 1st October 2015 – Re - Smoke Alarms, New Documents / Paperwork & Retaliatory Eviction

• Penalties – Civil & Criminal for getting things Wrong

• That it pays to get Trained / Knowledgeable / Keep Up to Date

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ABOVE ALL GOOD LANDLORDS

KEEP STANDARDS HIGH

‘IF YOU WANT QUALITY TENANTS PROVIDE A QUALITY PRODUCT’

If the property is ‘tatty’ on hand-over what incentive is there for the tenant to keep it nice

PROVIDE THE BEST BACK UP

Good landlords clean and refurbish between tenancies

Redecorate during a tenancy to a regular schedule

If there is a maintenance problem they respond quickly -Using it as an ‘Improvement Opportunity’ to INVEST In Their Property and KEEP the tenant!

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GOOD LANDLORDS – THE UNTOLD STORY Those of us who have invested in the PRS face a worrying

‘Demonising’ of Buy to Let Landlords for all the ills of the Housing Crisis - from the Media / Politicians / Pressure Groups

Landlords are an easy target because they have benefited from the increased demand for rented property:

Cheers when the Chancellor announced his Tax on Turnover!

“Yet it is NOT the rich who will be hardest hit by his tax changes but the middle income earners who, probably as a pension plan, have put down small deposits in areas of low yields, like parts of London, and are likely to end up trading at a LOSS!”

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GOOD LANDLORDS – THE UNTOLD STORY

Problems are exacerbated in London & the South East, by the very high demand, and that is where the Politicians and much of the Media and Pressure Groups are based

It is not surprising then that the Labour Mayoral Candidate Sadiq Khan has revived the Labour polices at the last election for ‘Rent Stabilisation’• The ‘softer’ term for RENT CONTROL but just as damaging

Longer Tenancies • Despite evidence that Landlords ‘want’ good long term

tenants His Party Leader Jeremy Corbyn would go further and drive

the Flexibility out of the PRS

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GOOD LANDLORDS – THE UNTOLD STORY

All parties are going to crackdown on ‘rogues’

Including this Government in the Housing Bill

We are with them on that one because it is the rogue and criminal operators who bring us all into disrepute

What we don’t want is hasty, ill thought out legislation which penalises the reputable landlord and reduces supply when it is so desperately needed

So what does the reputable landlord do?

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GOOD LANDLORDS – THE UNTOLD STORY

1. Join their trade association to Ensure have up to date awareness of all legislation Have access to professional advice – NOT misinformation Support us to campaign on your behalf – we can’t do it

without your financial support. It is NOT petitions or ‘noise’ which have most influence but those who have a seat at the table and can provide research and evidence

2. Stand up and be counted Evidence your professionalism by becoming Accredited The NLA scheme can be achieved FOC

3. Encourage all landlords to do the same Standing together and providing clear evidence that the

majority are ‘good’ and of the harm some proposals will do to those who ‘need’ the PRS, the tenants (voters) who are the politicians priority

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GOOD LANDLORDS – THE UNTOLD STORY

As Chairman of the NLA, I want our members to be able to be proud to be landlords which will come from:

Acting professionally Continually improving standards Becoming accredited

Driving the 84% ‘satisfaction rate’ to 97%, helping the naïve, uninformed or accidental landlord improve their property and management standards

Seeing the estimated 3% of criminal rogues driven out of the sector and not operating as landlords

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NATIONAL LANDLORDS ASSOCIATION

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• Tel: 020 7840 8900

• Email:info@landlords.org.uk

• Twitter: @nationalandlord

www.landlords.org.uk

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