Is the age of the 'dinner party' landlord over?

Given the recent changes in the Private Rented Sector from right-to-rent checks, Legionella risk assessments, smoke and carbon monoxide regulations, much stricter criteria on the use of the section 21 possession process, more licensing schemes and swinging tax obligations - it’s not surprising this is being suggested.

Not only that. ARLA in its Autumn statement wishlist have suggested allowing all lettings activity to be treated as a business for tax purposes. The submission document from ARLA said: “If this Government wants the whole private rented sector to provide professional services to their tenant customers, then by taxing landlords as businesses, the Government is making a clear statement that letting property is a business activity."

So what are the most recent developments?

Licensing schemes and training requirements are on the up

In the past it has been possible to have a fairly casual approach and still run a successful lettings operation, whether this was a single property or a portfolio of buy-to-lets. But judging by the type of initiatives that are taking place across the country, it seems that landlords may not have any choice but to get more professional in their approach to managing their tenancies.

November saw the launch of Rent Smart Wales which is a compulsory licensing and registration scheme which requires landlords to not only register their properties, have a license and demonstrate that they are fit and proper to hold a licence, but also to undertake training in order to obtain the licence.

Training initiatives are springing up in England too. In September Woking Borough Council launched a Private Landlord Accreditation Scheme working in partnership with the National Landlords Association (NLA) which requires the completion of a foundation course and subsequent professional development.

The number of local councils introducing licensing schemes has increased over the past year, Harrow Council on 1 November and West Nottingham in October, being the most recent. In areas subject to selective licensing, all private landlords must obtain a licence (at their cost) and it is the landlord’s legal obligation. Failing to do so could result in heavy-handed penalties and the courts do act. At the end of October a landlord with property in Rotherham was fined £361.48 for failing to respond to the council’s request to licence his two rental homes.

Landlords increasingly under review

In the last five years online reviews have become common place on business websites or used to help the public find the best such as Trust Pilot or Trip Advisor and it seems that landlords may well in future be treated in much the same way as a business. In October a tenant angry at receiving “misleading” service from letting agents has set up an online review site for rental properties.

Councils are getting active too. The City of Wolverhampton Council has just launched a website ‘Rent with Confidence’ which awards 5* to landlords who comply with the law and who rent out property above the minimum statutory standards, with financial incentives for 5* landlords. The website will only list council approved properties.

The end of the age of the 'dinner party' landlord?

As the rental sector becomes more ‘business-like’, ever more demands are placed upon landlords with ever more public scrutiny - tenants may in future be more like ‘clients’ or ‘customers’. It seems clear in what direction everything is heading.