30th January 2003 - ARLA Conference

Government can help the Private Rented Sector to reach its full potential in the drive to provide quality housing for all, but only by introducing practical solutions to safeguard the public. This is the message put to letting agents at the Annual Conference of the Association of Residential Letting Agents, ARLA, in London today.

John Crossley, FRICS, Chairman of ARLA, warns that ‘tampering’ by government at the margins is not the solution. It will not help Housing Benefit tenants, neighbours, the public at large or investment in the rental market through the Buy to Let initiative.

As well as real reform of the Housing Benefit system, government should introduce a practical framework of standards for hostel-style and bedsit accommodation, described as Houses in Multiple Occupation, HMOs. However, the middle ground of the Private Rented Sector, as represented by ARLA, other professional bodies and the Buy to Let investor has no need of new solutions, only more of an effort to safeguard those deposits and rents not held by regulated agents.

Starting with the problems faced by benefit tenants in their search for reasonable housing, Mr Crossley said, “Giving these individuals the responsibility for handing over the rent themselves instead of it being paid directly to the landlord by the local authority does not address the problem. It is merely patronising the hapless benefit tenants, not helping to house them in the Private Rented Sector.”

Mr Crossley explained that the problem does not lie with the potential benefit tenant but with the system.

“Payments, already scheduled in arrears, are paid late. There is no deposit guarantee system through which to protect property and there is always the risk of ‘clawback’ of rent from landlords and agents when an authority believes the rent should not have been paid on behalf of the tenant.”

Turning to anti-social tenants, Mr Crossley said that government expects too much of the private sector. “It is trying to put the onus on mature and respectable landlords to do the work of police or local authorities and control anti-social behaviour. Again, if government wants to encourage the use of the Private Rented Sector to solve housing problems, it should not consider landlords as either ‘my brother’s keeper’ or as part- time unpaid policemen.”

“The onus for internal law and order is on government,” Mr Crossley reminded delegates.

Government is also proposing selective licensing in some of the more deprived areas of the country. Mr Crossley asked delegates to consider whether, in their experience, housing officers should be expected to tackle appalling social conditions face to face, with a knock on the door and a form to complete.

For regulation of Houses in Multiple Occupation, Mr Crossley said that the industry had broadly accepted the standards envisaged in the Home Energy Conservation Bill. This Bill was dropped by government last summer. Licensing for properties with more than five sharers would have made sense and would not have destroyed the sharer market. This would severely reduce choice in housing for many young people at the outset of their careers. To protect the public’s money, Mr Crossley called for very clear differentiation between the levels of compulsory bonding schemes and the speed of restitution, as operated by ARLA and other professional organisations, and accreditation schemes.

“While we support any attempt to bring higher standards to the lettings industry, the public must be kept fully aware of the difference in the levels of protection for clients’ money, and in the requirements for training, qualifications and the demands of compliance with best practice and professional indemnity. These vary considerably and the benchmark standard should be as high as the ARLA standard.”

This is where ARLA believes the government-backed Tenancy Deposit Scheme has such a strong role to play in protecting the public, where properly regulated agents are not used. ARLA also supports the use of the scheme by its own members as well. This is partly to support the scheme in its infancy and partly because it does provide an effective method of dispute resolution between landlords and tenants, should there be a problem over the allocation of the deposit at the end of a tenancy.

Mr Crossley concluded that the Private Rented Sector can and should play a major role in providing choice of tenure and the provision of quality housing. “This can only happen provided that impractical regulation does not damage the confidence of the new breed of investor landlords. Buy to Let has played a significant part in restoring the Private Rented Sector from its nadir in the late eighties and it has made renting socially acceptable once again by bringing good quality housing to the market.”

Mr Crossley dismissed fears that the Buy to Let market was in danger of overheating. “It represents only 10% of the total rental market. There is scope for more investment in the Private Rented Sector for the foreseeable future.”

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