Should Landlords And Letting Agents Be Licensed?

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In the news this morning I spotted a report that the Lib Dems are planning to debate about whether landlords and letting agents should be licensed. They have also stated that they would more like more protection for private tenants, including longer tenancies and access to a housing ombudsman for tenants. Firstly, an ombudsman has never proved to be a useful tool and they are supposed to represent both sides, not just one. Ombudsmen generally have no teeth, unless the media get involved, and are a mostly pointless entity where they are in use already.

Lets not forget we already have; NARLS (National Approved Letting Scheme),TPOS (Property Ombudsman Service),OFT (Office Fair Trading), Safe Agent scheme and many more.

So, Should Landlords And Letting Agents Be Licensed?

I will say upfront, that, although I hate so much of the pointless red tape surrounding letting property, I’m not against licensing per se. It has merits if done properly. However, most government regulation is usually about making money rather than solving a problem. Currently we have a mish-mash system of self regulation with some added government rules. For example, some agents are part of ARLA (Association Of Residential Letting Agents), some not. Landlords have loads of regulation for stuff within a property, but not for themselves or their business.

ARLA carries no real clout, but it does allow you to look good as an agent, you can display a pretty badge and pretend to be all ethical whilst doing the opposite. However, being licensed could end up the same way if it is not policed. Unfortunately, that is very unlikely to happen given past examples.

Rogue Landlords,Rogue Letting Agents & Rogue Tenants

A simple plain fact is that so called “rogue landlords” or “rogue letting agents” (the ones that everyone complains about) do not generally care about regulations. Regulations only work if there is power behind them for positive change, and rules are simple and clear. Most councils don’t have the man power to monitor lecensing properly. Which leads me back to money. It’s plain to see that to finance licensing for landlords and letting agents they would need to charge for it….

The Theory Is Good, But…

Licensing agents and landlords is in theory a good idea. A system enabling properties that don’t achieve health and safety standards to be struck off until brought up to standard could work. Rogue landlords in particular, are not as common as the media would lead us to believe. But a good scare story on the other hand is ;-)

Conversely, rogue tenants who don’t pay or cause damage, squatters and professional rent dodgers are all too common. (From today, squatting in residential property is illegal.)

The Lib Dems think that local councils could be in charge of their own licensing. This has already been tried via licensing of HMO’s, which of course was not wildly successful and has caused many issues on all sides. Some landlords are already fighting legal battles.

The plain fact is that having a license to operate does not automatically solve the problems. The whole system is a mess and needs a proper re-think and shake up. It does not help that there are so many networking clubs and “property educators” who encourage building portfolios for completely clueless people, or preach that being a landlord is a ‘passive’ income, and property investment as something to be dabbled in.

So, is licensing landlords and letting agents the answer? What do you think?

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