Blog Post

Slum Landlords: driven by Government policy?

David Boyd Jul 12, 2011, 12:14 PM

Slum Landlords

Dispatches ran a disturbing programme recently on Slum Landlords.  I'm sure anyone watching the programme would have been disgusted and shocked at the condition of homes some tenants have to reside in, sadly, although disgusted, I am not shocked.  This Government, and previous Governments' policies (or lack of)  positively encourage such landlords and their behaviour.

For example, to date anybody can set up a Lettings Agency tomorrow, without any qualifications, or without any insurance protecting Client funds (such as landlord's rent).  This has resulted in landlords losing thousands of pounds if their Agency goes bump, often without knowing they are exposed to any risk.  Why has it taken so long for any UK Government to insist that Letting Agents must be member of a qualified body such as ARLA (Association of Residential Letting Agents) or RICS (Royal Institution of Chartered Surveyors) or other recognised bodies?  In addition every Lettings Agent should insure all Client funds.  If a bank goes bust you wouldn't expect to lose money (though it can happen in extreme cases), likewise if a Letting Agent goes bust you shouldn't lose money either, period.  (PAD4U is ARLA licensed and Client Funds are insured).

Of course there are landlords who do not use Letting Agents, which is right and proper they have this choice, but they ought to be licensed by local Councils.  Landlords should meet a minimum understanding of tenancy law (and this should be tested), before they are able to let out a property without the aid of a qualified agency.

However this doesn't explain the poor condition of property, this is due in part to the present Government failing to keep it's promise to overturn a policy implemented by the last Labour Government in regards to Housing Benefit.  Previous to the last Labour Government, Housing Benefit rent was paid directly to the Landlord, this ensured the following: tax payers money which is meant to pay for rent actually pays for rent (this is incredibly important point - it is not the Government's money, nor the tenants, it's is the tax payer's money, and due care and attention should be made that it meets its intended purpose in society), secondly, even if a tenant has other debts which may automatically be taken from their bank account, their rent money is safe , they would always have a roof over their head, because their rent was paid automatically.

The reason such a policy results in sub-standard housing is because "good" landlords that ensure their property meets (and exceeds) all standards set, will insist they receive a fair market rent for their property. Due to the above policy "good" landlords or agencies for that matter cannot afford to take the risk on Housing Benefit tenants.  So Housing Benefit tenants have no choice, but to fall into the hands of "Slum Landlords", who will happily take the risk of not receiving rent, because they are happy to throw tenants out, and spend no money on the property whatsoever, so they will always make profit regardless.

So much is obvious.  However, what baffles me is why all Governments seem complicit in this inevitable outcome.  Perhaps, because they can lay the blame at "Slum Landlords" rather than themselves, or because it can potentially save money.  But it is shameful that such an affluent country has it citizens living in squalor, or that millions are still awaiting a home.  Intelligent Government policy should ensure "good" landlords and good agents can operate and that "Slum Landlords" cannot.  Shelter and other charities work hard to help those people unfortunate enough to be in this position, but it is the Government who are ultimately responsible for housing its citizens.




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