The report, titled 'The impact of accidental landlords on the private rented sector', was written by property expert Kate Faulkner, and funded by the TDS Charitable Foundation.
It follows on from her first report, which investigated 'Who are the individual landlords providing private rented accommodation?'. This first report highlights that a substantial number of landlords who provide rented accommodation to tenants are not professional landlords, but are 'accidental landlords' who never intended to let their property to tenants.
This has implications for the Private Rented Sector (PRS) as it means that there are risks that some tenants may end up renting from landlords who have little knowledge of tenants'/landlords' rights and responsibilities, rules and regulations on letting property, and the real costs of managing and maintaining a rented property.
It also means the properties being rented could be more insecure as they are much more reliant on the owner's changing circumstances, rather than renting from a landlord who has planned to let their property for 15 years or more to good tenants. The report suggests that these landlords might be contributing to some of the more serious issues of property disrepair with the latest English Housing Survey suggesting that 29% of properties in the private rented sector are 'non-decent'
Kate Faulkner explains:
“Due to the impact that 'accidental landlords' can have on the PRS, this report considers the definition of accidental landlords and why a landlord who isn't wholly focused on making money from property may end up being potentially more likely to let one that is substandard and 'accidentally' treat tenants unfairly.”
The report suggests that in some areas accidental landlords could be providing up to 30% of rental stock for tenants. Councils need to be aware of the proportion of accidental landlords as, unless landlords are better educated and informed, they may continue to let to unsuspecting tenants and 'accidentally' flout the laws on letting.
To help educate accidental landlords, the report recommends that lenders and insurance companies in particular provide as much information as possible to help landlords understand their, and their tenants', rights, the need to budget for repairs and maintenance, and the right level of tax to pay on rental income.
For example, anyone taking out or converting to a buy-to-let mortgage or purchasing landlord insurance should be better informed of their rights and responsibilities. This might be achieved by direct provision of information to these landlords or requiring landlords to join a landlord scheme or work with letting agents that are members of RICS, ARLA or NALS
Kate also calls on local authorities, policy makers, tenant groups, lobbyists and those that provide services to landlords in the PRS to make sure their own staff fully understand tenant and landlord rights and responsibilities so they are better able to communicate specifically with accidental landlords to give them all the help, advice and support they need to make sure they let their properties legally and treat tenants fairly.
She adds: “The problem with accidental landlords is that as they don't do this as a business they may well not have any way of keeping up to date with changes in rules and regulations. As a result, continuing to simply introduce new legislation to solve the issues around disrepair or tenant security of tenure may have little impact on this sector of the market. A concentrated effort to tackle better education and briefing of accidental landlords may actually be one of the key ways to improving standards in the PRS.”
