London councils failing private tenants and landlords

Councils must provide better information to help "amateur landlords" learn about their responsibilities. Photograph: B.O'Kane / Alamy/Alamy

Last week, tenancy officer Ben Reeve-Lewis reminded us that problems in the private rented sector (PRS) are more likely to be caused by "reluctant landlords" ? people who find they can't sell their home and so rent it out instead.

I have said for some time that councils and the lenders of buy-to-let mortgages should be doing a lot more to help spread knowledge. In September, Letting Focus surveyed the quality and quantity of information that 12 London local authorities made available to tenants and landlords in the private rented sector. The results were shocking.

We found an almost complete lack of information on important issues such as letting agency fees charged to tenants and how to avoid becoming a victim of fraud at the hands of fake letting agents. Even advice for landlords on safely letting large shared houses is sometimes missing ? particularly worrying because these houses in multiple occupation (HMOs) run a high fire risk.

Unfair fees charged to tenants

A recurring complaint made by tenants is that many letting agents and some landlords charge them high and unexpected fees for services such as reference checking and drawing up an inventory. Often, these fees are not set out clearly at the outset and bear no relation to the real costs of providing the service specified. The problem is so serious that the Scottish government has announced that it is to ban letting agents and landlords charging tenants additional fees for any work in connection with setting up a tenancy.

Our survey found that only two councils out of 12 ? Hammersmith & Fulham and Wandsworth ? made any mention of letting fees in the information they provide for tenants. Even there, the advice was very limited.

Wandsworth's guidance to prospective tenants simply advised them to "ask about fees", and said only to do this where the provider was an "accommodation agency". The council was was silent on what tenants should do if the provider was a letting agent or a landlord acting for themselves, even though the issue is just as relevant for these types of operator.

Fraud Risks

Tenants and landlords in the PRS can be exposed to the threat of fraud. Tenants can become victims of fraud when they hand over reservation fees, rents or deposits in advance to people posing as a landlord or the landlord's agents when in fact they have either illegally gained access to a property or set up a fake lettings website. Landlords can become victims if rogue tenants use the property address to steal their identity.

Our survey found that only two councils made any mention of this risk at all, Newham and Southwark. Southwark's information was limited to simply telling tenants not to hand over cash and to ask for a receipt.

Houses in multiple occupation

The demanding standards for larger shared dwellings, or HMOs, were put in place for good reason, including an attempt to reduce the much higher risk of fire and other health and safety issues associated with this type of accommodation.

Incredibly, two of the 12 local authorities we surveyed ? Camden and Wandsworth ? did not provide any information about HMOs at all. Wandsworth had a link to webpage where information should be available but the link was no longer active. Hackney's information is adequate, and the opening line of its guidance document conveys the impression that all HMOs are bedsits, which they are not. Waltham Forest rather oddly tells any Scottish landlords who may chance upon their website that "all HMO properties in Scotland have to be licensed".

Time for change

These examples show that local government is simply not good enough at providing essential information for private tenants and their landlords, particularly in a sector that is now so large. Councils cannot criticise landlords for failing to meet their obligations if the councils themselves are failing to provide the information that landlords and tenants need.

A lack of expertise and understanding of the PRS at town halls in senior and middle-management level is at the heart of this failure to develop both a strategy and good advice for the private sector.

David Lawrenson is a private rented sector consultant who works with organisations ranging from buy to let mortgage lenders to local authorities

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Source: http://www.guardian.co.uk/housing-network/2012/oct/23/london-councils-fail-private-tenants-landlords

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