Some agents 'may be tempted to act illegally' says lettings guru

Property expert Kate Faulkner says the massive surge in new regulations, legislation and fiscal measures aimed at the private rental sector means “there’s an incentive for some landlords and agents to act outside the law to increase their profit margins.”

In the latest in a series of authoritative reports written by Faulkner, and funded by the TDS Charitable Foundation, she highlights the ever-increasing financial and administrative pressures on landlords and agents due to legislative changes.

Of over 147 new pieces of legislation covering the sector, more than half have been introduced since buy to let mortgages were launched in 1996, she says. 

And while the percentage of homes in the private rental sector classed as ‘non-decent’ has reduced (47 per cent in 2006 to 28 per cent in 2015), there has been an increase in real terms as the sector has grown (1.2m to 1.3m in the same period).

“Due to the rising costs to good landlords and a scant enforcement of private rental sector regulations, there is an incentive for some landlords and agents to act outside the law to increase their profit margins” claims Faulkner.

“The increased costs to landlords of buying a property, then letting it legally and safely, means that in some cases rents have increased beyond the means of some tenants. Reputable landlords and agents are being penalised financially for abiding by the law. It can create a vicious cycle and a two-tiered rental market, which the legislation was never intended to create” she adds.

“The problem, as I see it, is that Bills are introduced on the sector all the time, but aren’t backed with a communications plan or funding for enforcement. As I wrote for a previous TDS Charitable Foundation report; legislation is meaningless without enforcement.”

She says that has been “myriad legislation” which has proven confusing, allowing rogue landlords and agents to get away with offering sub-standard homes to tenants who don’t know their rights. 

“I would like to see a more concerted approach to educating tenants on their rights. Nobody could have escaped hearing about the introduction of GDPR, but when rental laws are introduced, affecting millions of people across the country, there doesn’t appear to be the same public awareness campaign” she says.

“That is not to say that legislation introduced has been wrong-headed or ineffectual, but it could have had a greater positive impact on the sector if it were backed with enforcement and communication.”

The TDS Charitable Foundation commissioned Faulkner to produce research reports to improve knowledge and educate landlords, agents and tenants. 

Her latest report is here: https://tdsfoundation.org.uk/programmes.