NOT THE ‘B’ WORD

Tuesday June 7, 2016

To be or not to be, that is the question. Since you cannot tune in to broadcast or social media without all the world and his dog offering their opinion I shall spare you my views on the ‘B’’ word. Brexit. Already I think I have heard enough to convince me that the end of the world is nigh, however we all vote on June 23^rd.

Everybody has their favorite piece of seemingly pointless legislation from our friends in Brussels and Strasbourg. One of mine concerns a small family run fish smoking business in Scotland. They were required to spend thousands of pounds re-packaging their smoked salmon with a label on the back stating “Contains fish”. I briefly considered making small plaques for the doors of our blocks and estates with the legend “Contains humans. Possibly cat and / or dog”.

But while dotty EU regulations make for good dinner table conversation, we are not exactly short of home grown legislation here in the UK, particularly that concerning landlords.

I have counted thirteen new pieces of legislation so far this year and we are not even half way through. Most of it, undoubtedly like the ‘Contains fish’ label, starts out with good intentions. In our case, this is to offer enhanced protection to tenants. The problem is often lack of clarity regarding a landlords’ implementation of the legislation.

A shining example for our owners who sub-let their property is the Right to Rent checks. A landlord is now required to check if any potential tenant has the right to reside in the UK. Fair enough you might think. But the law now requires landlords to be able to spot fake documentation including passports and visas.

If an existing, legitimate tenant allows an illegal immigrant to stay at their property it is the landlords’ responsibility to serve a 28-day notice to quit. If at the end of that period the tenants have not moved, the landlord is required by the Secretary of State to use ‘reasonable force’ to remove them. Aside from pondering the exact definition of ‘reasonable force’ when throwing a family out into the rain, does not the Secretary of State have at his disposal an efficient Immigration Service who might be better qualified and equipped to deal with immigration issues?

We are now required to train our staffs in the interpretation of this and other new pieces of legislation, like the Housing and Planning Act 2016. Naturally there is a cost attached to this training which frequently requires us to hire specialist advisers. That cost must be passed on somehow, usually to property owners who must in turn pass it on to tenants in higher rents.

Some of this legislation like the removal of mortgage interest tax relief and the removal of ‘wear and tear’ tax allowances is clearly designed to discourage landlords from buy-to-let house purchase, thus freeing up the housing market for first time buyers. The effect, sadly is to have the opposite effect. As first time buyers face increasing rent, their disposable income to divert into saving for a deposit is diminished. Result – a longer period renting and that first foot on the property ladder fading into the distance.

Legislation in any sector that looks good on the civil servants desk often does not have the desired effect on the ground. Still, I do not suppose it matters much. After June 23^rd if we vote to stay in Europe, two million Transylvanian vampires will arrive at our shores demanding NHS treatment. If we vote to leave, Donald Trump becomes our new best friend. It is enough to make you want to emigrate.