It’s been quite a week for generation rent in the media this week. Quite apart from the launch of generationrent.org Renters Manifesto there was the recent heartbreaking Panorama documentary along with parliament debating the Private Rental Sector. All that coverage has thrown up a lot of discussion about regulation, so in this post we want to look at the subject from generation rents perspective.
Every single important public service that is vital for the country to function has a regulator. In some cases this has not actually helped as the banking sector ran rings around theirs in the lead up to the crash, that said it is probably better to have someone looking out for the common good than no-one at all.
The private rental sector is wholly unregulated bar a few industry associations which obviously work on landlords behalf and rightly so. The consensus of government and these associations is that there are a few rotten apples spoiling the barrel and that the majority of landlords look after both their properties and their tenants for a profitable return on their investment.
This maybe true up to a point however it doesn’t explain why the latest government figures show that the end of tenancy has been the most common cause of homelessness every single quarter for the last two years. It also doesn’t explain the constant stream of horror stories generationrent.org and ourselves receive every day. Something is more fundamentally broken in the private rental sector than anyone cares to admit.
So the landlord response in the media (which seems to be so heartlessly delivered) is “As a private sector landlord, I don’t have a responsibility to house anyone”.
Well, a case could very easily be made that landlords do have a responsibility.
Not morally, not charitably but financially.
HMRC is of the belief that landlords provide a valuable service to society in that they provide housing to both the top and the bottom of the rental market. The taxman shows his gratitude for this service by way of favourable tax conditions i.e. sharing many of the tax advantages of companies to deduct “business expenses” from taxes yet being viewed as an “investment activity” when it comes to paying them.
Therefore if the UK tax system is giving landlords a benefit in kind for the important service they provide then there is a responsibility to the UK taxpayer who tolerates and funds these benefits. Therefore, by association, there is a responsibility to society as a whole.
This is why regulation is not a bad thing for the private rental sector, providing some much needed recourse when the ‘bad apples’ float to the top of the barrel. Why would anyone be against a system that’s designed to weed them out?
We don’t need “Venezuelan style” rent caps, just a system which allows rents to be predictable and a flexible tenancy agreement so that the length of time you can stay in the property isn’t simply decided by the landlord every time the tenancy is up for renewal.
It doesn’t have to be detrimental to landlords or to tenants, it’s a case of common sense with a little give and take on both sides.