Only a national landlord register will stop rogue landlords evading justice

A research report published by a landlord representative body today tries and fails to defend deregulation of private renting, and only reinforces the case for a national landlords register. The Residential Landlords Association has published “The impact of regulation on the private rented sector”, a report by Professor Michael Ball of Henley Business School, which claims that current regulations are failing to achieve their aims. We agree that existing regulations are not working, but what renters need is a national register of landlords.

 

There are a number of problems with the report’s claims, including:

1. “Registration schemes can never be comprehensive because they face the fundamental information problem of not knowing what properties are rented out by whom”

Saying that there is lack of data in the industry, and that it is difficult to enforce against the worst offenders only proves the need for a comprehensive landlord register.

2. Operating costs “range up to 30-40 per cent of gross rents”

The regulatory ‘burden’ is illusory – all businesses have running costs, and being a private landlord is a highly profitable one.

3. “The sensible way to evaluate any proposal aimed at regulating the private rented sector is to undertake a cost-benefit analysis (CBA), comparing the costs, direct and indirect, with the value of the benefits expected to be achieved.”

The trouble is that Professor Ball’s own cost-benefit analysis claims that tenancy deposit schemes cost £276m but the only benefit is the £7m in deposits that are recovered by tenants as a result of the scheme.

Not only does the analysis fail to take into account the deposits that landlords would withhold were it not for the scheme, it does not acknowledge that the cost of running the system (£102.90 per landlord, even though the cost of insurance is only £20) is a mere 10% of the total value of deposits protected – and therefore only around 1% of private landlords’ annual turnover. Furthermore, the 0.5% of tenants that need to recover their deposits indicates that the scheme is working in deterring landlords from claiming their tenants’ money. How adequately tenants’ deposits are protected from rogue landlords is another matter, as Channel 4 News reported earlier in the month.

RLA wants you to pity poor, over-regulated landlords but the reality is that it’s harder to open a commercial kennel than to let a house to humans. The evidence is that private renting is one of the most profitable businesses that you can run and it’s about time there was a fair balance between the rights of renters and landlords.

Generation Rent's director, Alex Hilton, goes head-to-head with Professor Ball in an article for the Guardian Housing Network today.

UPDATE, 30 APRIL: In today's Guardian, Zoe Williams has written a comment piece on the report and our take on it.

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