Private landlords forced to join redress scheme

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In a move which will not alleviate concerns that the government is trying to price private landlords out of the buy to let market, we have yet another layer of cost being added to the sector. Community Secretary James Brokenshire recently announced plans for a new “housing complaints resolution service”. While we await details and a launch date, we know that private landlords will be legally required to join this new redress scheme with fines of up to £5000 for those who fail to do so.

More assistance for tenants

In some ways this is a sensible move because it brings private landlords into line with letting agents where there is already such a scheme in place. In theory, it makes perfect sense to formalise the complaints process for tenants. However, where is the assistance for landlords? Who is protecting their rights?

There are growing concerns that private landlords are being cut adrift by the UK government. It is fair to say there have been rogue landlords in the past, those who ignored the rules and regulations, but they are certainly in the minority now. For some reason private landlords are now seen as a cash cow by the government as they will be charged to join the new redress scheme.

Yet another layer of cost

We have already seen the introduction of an additional 3% stamp duty for second home/buy to let property buyers. The government is tapering off mortgage interest relief for buy to let investors, which will impact higher rate taxpayers. We now have the introduction of a new redress scheme for private landlords with a tiered approach to membership costs. The simple fact is that where possible landlords will need to pass any additional charges onto their tenants in the shape of increased rent. After all, these are landlords/investors who acquired assets often with a long-term investment timeline in mind. Why should they be forced to take the pain of these additional costs?

The scheme will also be applicable to housebuilders where homebuyers have issues they have been unable to resolve directly with the seller. Talk of a “redress reform working group” in charge of setting up the new redress scheme has also prompted cries of yet another layer of wasteful bureaucracy.

What about landlords?

When you consider there is an enormous housing shortage across the UK, surely the government should be more supportive of landlords? These are individuals and companies who have invested literally hundreds of thousands of pounds, and more, with a long-term investment strategy in mind. They have legally binding agreements with their tenants but little in the way of support when pursuing claims. On a regular basis landlords are forced to go to the courts, at additional expense, to reclaim rent arrears and evict troubled tenants - even though these issues are covered in a standard tenancy agreement.

Private landlords have become a political football

Since the 2008 worldwide financial crisis, governments around the world have been looking at ways to increase their income and tackle austerity. The UK government has for some time now seen private landlords as something of a cash cow. They are regularly painted as the devil incarnate in the Houses of Parliament, pilloried for providing long-term rental accommodation and used as a political football to carry favour with voters.

If the authorities took the time to ask private landlords, they would find there is an appetite for creating a simple but effective complaints procedure. The vast majority of private landlords in the UK are responsible and many of them go out of their way to assist their tenants. However, they have become an easy target for the politicians, a strong income stream for the government with their returns being steadily eroded. When will it all end?

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