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The resounding view from the committee is that much greater regulation is need in the private rented sector. The topic of housing benefit being a huge amount comes up often. Lengthy but great read.
http://archive.niass...t_30_10_11r.htm
A key part
Quote
With regard to the economics of providing housing in the private sector, we have distributed a copy of the actual costs based on a £100,000 three-bedroom house, as it might be today, and £200,000, which might have been a reasonable cost at the peak. It is apparent that the rents received from the tenants through housing allowance do not cover the true cost of providing accommodation. Former Governments in the UK and Ireland encouraged people to become involved in the buy-to-let market in order to secure their financial status for later in life. It is not entirely surprising, therefore, that a University of Ulster survey, which was carried out not so many months ago, indicated that 50% of landlords in Northern Ireland entered the market in the past five years, and most of them probably did so in the past three or four years.
375. It is apparent from that survey that 50% of landlords are now sitting on quite substantial amounts of negative equity and will inevitably face grave financial hardship. This is the true picture, which is very different from the Government's apparent perception that landlords are very wealthy; it is quite the reverse. Many people who rent out accommodation are not landlords and do not own their properties, because they took out interest-only loans. However, they are still responsible for all their losses.
376. Mr Declan Boyle (Landlords Association of Northern Ireland): On that point, a £50,000 deposit is now required for a house costing £200,000. The game has changed, because all of the financial institutions now want interest-only to be changed to interest and repayment. Very often, landlords are teachers, civil servants or other averagely paid people, who now have to feed this product called investment property out of their paid employment. Those people thought that they could make money and move on, but they were. They are now in something that is going to take a long, long time to get out of. They might never get out of it. Investment properties have been seized by financial houses all round the place. That is a very real concern.
377. [Inaudible.] — public landlord registration. Our concerns range from the nuisance caused to the undesirables. [Inaudible.] People who have multiple properties can see their names on a public register, and that is a real concern. The other aspect is that that they would not get any enjoyment from their "house", because people would be calling to say that the washing machine was not working or ask whether there was a house to let. People are arriving at your front door on these issues, so the need for a public register — [Inaudible.]
378. The agencies need to get a hold of somebody. If there was a service level agreement or something along those lines whereby agencies and departments could work through and with each other between the Housing Executive, environmental health, the rates office and the Land Registry, the amount of properties that would not be available after going down through those people to find out whether they are available from the owner is tiny; there is nothing to suggest to me that that would be a large number. The register will have a cost implication attached that will be passed on to tenants, who are struggling to pay their rents at the minute. We are going to have a cost now, and — [Inaudible.]
379. Mr Joe Nugent (Landlords Association of Northern Ireland): I want to talk about the proposed tenancy deposit scheme. We believe that the Government has not really studied the statistics, which we gave to the Department for Social Development (DSD) during our consultation. For example, 98·9% of deposits are returned amicably. It does not take a genius to work out that 1·1% of deposits are disputed. In fact, a trading standards officer came out and told one of our general meetings that he had only one complaint of a dispute last year, out of 28,000 complaints.
380. We also argue against the very high fees that will be added to taking a deposit. At the moment it is £57·50 per deposit, plus £15 each. That will obviously increase, and inevitably this will be passed on to tenants, increasing their costs.
381. We also want to address the tenancy deposit scheme with regard to social housing with housing benefit. Nowadays, most landlords take a deposit and a guarantor. Some may decide not to take a deposit and not bother with unnecessary bureaucracy, because it is quite a bureaucratic process, so they take just a guarantor. That leaves vulnerable tenants, who are not able to provide a guarantor, having difficulty finding accommodation. That is a major concern in light of the fact that the private rented sector is being asked to increase the uptake in demand for social housing.
382. Mr Laird: The public sector has shrunk considerably over recent decades, with properties sold off and less money being put into it. The private sector is picking up the slack. We are housing a lot of vulnerable tenants who would, perhaps, be better suited to public housing. There does not appear to be any bridging mechanism for those tenants. It would be good if some assistance or mechanism could be put in place for them, because a number almost fall between two stools. Most of the ones in the private sector are probably fine. They understand everything and can comply with everything. However, there will be a percentage at the bottom end who are not as fortunate, and they very much seem to have been cast to one side by the public sector.
383. Ms Lyons: In the private rented sector, the landlord is the primary stakeholder. We have invested capital, time and effort. We have also provided information, and met government officials and politicians, at no expense to government. Yet we can conclude only that we are not being listened to and understood.
384. It would appear that government has its own agenda and a total disregard for our views. Nor does it seem to have direct experience and understanding of the true problems in the private rented sector. That is such a pity, because there is a real housing need. With government intervention through the introduction of unnecessary legislation, the provision of housing by the private sector to social tenants could completely collapse. That is a real concern.
385. The coalition Government in the United Kingdom appears to have understood that. Minister Grant Shapps, on 10 June, in Parliament, announced that he was going to scrap all plans to introduce new legislation on private landlords. That included the national register of landlords. He said:
"With the vast majority of England's three million private tenants happy with the service they receive, I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords."
Why, then, is the Government proposing to introduce more legislation in Northern Ireland, especially when, as we heard from Joe, tenant satisfaction is much higher than in England? We do not understand why the Government here feels that it knows better than central Government and those who are the stakeholders in providing the service.
386. Needless to say, we feel totally let down, ignored and burdened by the threat of more bureaucracy. For us, it is hard to imagine a more effective way of discouraging and undermining the long-term investment that people in the private rented sector here have made than by imposing some of the provisions in the Bill, which we feel is not properly thought through. As you can appreciate, we have genuine concerns about the Bill. We thank the Committee for listening to us this morning.
387. The Chairperson: I want to pick up on your final remarks. You asked why the Government here think that they know better than the Government in Westminster. It is the right of this Assembly to decide what it thinks is best for Northern Ireland and its people. That is the nature of the devolved system, so I do not take particularly kindly to being lectured about what —
375. It is apparent from that survey that 50% of landlords are now sitting on quite substantial amounts of negative equity and will inevitably face grave financial hardship. This is the true picture, which is very different from the Government's apparent perception that landlords are very wealthy; it is quite the reverse. Many people who rent out accommodation are not landlords and do not own their properties, because they took out interest-only loans. However, they are still responsible for all their losses.
376. Mr Declan Boyle (Landlords Association of Northern Ireland): On that point, a £50,000 deposit is now required for a house costing £200,000. The game has changed, because all of the financial institutions now want interest-only to be changed to interest and repayment. Very often, landlords are teachers, civil servants or other averagely paid people, who now have to feed this product called investment property out of their paid employment. Those people thought that they could make money and move on, but they were. They are now in something that is going to take a long, long time to get out of. They might never get out of it. Investment properties have been seized by financial houses all round the place. That is a very real concern.
377. [Inaudible.] — public landlord registration. Our concerns range from the nuisance caused to the undesirables. [Inaudible.] People who have multiple properties can see their names on a public register, and that is a real concern. The other aspect is that that they would not get any enjoyment from their "house", because people would be calling to say that the washing machine was not working or ask whether there was a house to let. People are arriving at your front door on these issues, so the need for a public register — [Inaudible.]
378. The agencies need to get a hold of somebody. If there was a service level agreement or something along those lines whereby agencies and departments could work through and with each other between the Housing Executive, environmental health, the rates office and the Land Registry, the amount of properties that would not be available after going down through those people to find out whether they are available from the owner is tiny; there is nothing to suggest to me that that would be a large number. The register will have a cost implication attached that will be passed on to tenants, who are struggling to pay their rents at the minute. We are going to have a cost now, and — [Inaudible.]
379. Mr Joe Nugent (Landlords Association of Northern Ireland): I want to talk about the proposed tenancy deposit scheme. We believe that the Government has not really studied the statistics, which we gave to the Department for Social Development (DSD) during our consultation. For example, 98·9% of deposits are returned amicably. It does not take a genius to work out that 1·1% of deposits are disputed. In fact, a trading standards officer came out and told one of our general meetings that he had only one complaint of a dispute last year, out of 28,000 complaints.
380. We also argue against the very high fees that will be added to taking a deposit. At the moment it is £57·50 per deposit, plus £15 each. That will obviously increase, and inevitably this will be passed on to tenants, increasing their costs.
381. We also want to address the tenancy deposit scheme with regard to social housing with housing benefit. Nowadays, most landlords take a deposit and a guarantor. Some may decide not to take a deposit and not bother with unnecessary bureaucracy, because it is quite a bureaucratic process, so they take just a guarantor. That leaves vulnerable tenants, who are not able to provide a guarantor, having difficulty finding accommodation. That is a major concern in light of the fact that the private rented sector is being asked to increase the uptake in demand for social housing.
382. Mr Laird: The public sector has shrunk considerably over recent decades, with properties sold off and less money being put into it. The private sector is picking up the slack. We are housing a lot of vulnerable tenants who would, perhaps, be better suited to public housing. There does not appear to be any bridging mechanism for those tenants. It would be good if some assistance or mechanism could be put in place for them, because a number almost fall between two stools. Most of the ones in the private sector are probably fine. They understand everything and can comply with everything. However, there will be a percentage at the bottom end who are not as fortunate, and they very much seem to have been cast to one side by the public sector.
383. Ms Lyons: In the private rented sector, the landlord is the primary stakeholder. We have invested capital, time and effort. We have also provided information, and met government officials and politicians, at no expense to government. Yet we can conclude only that we are not being listened to and understood.
384. It would appear that government has its own agenda and a total disregard for our views. Nor does it seem to have direct experience and understanding of the true problems in the private rented sector. That is such a pity, because there is a real housing need. With government intervention through the introduction of unnecessary legislation, the provision of housing by the private sector to social tenants could completely collapse. That is a real concern.
385. The coalition Government in the United Kingdom appears to have understood that. Minister Grant Shapps, on 10 June, in Parliament, announced that he was going to scrap all plans to introduce new legislation on private landlords. That included the national register of landlords. He said:
"With the vast majority of England's three million private tenants happy with the service they receive, I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords."
Why, then, is the Government proposing to introduce more legislation in Northern Ireland, especially when, as we heard from Joe, tenant satisfaction is much higher than in England? We do not understand why the Government here feels that it knows better than central Government and those who are the stakeholders in providing the service.
386. Needless to say, we feel totally let down, ignored and burdened by the threat of more bureaucracy. For us, it is hard to imagine a more effective way of discouraging and undermining the long-term investment that people in the private rented sector here have made than by imposing some of the provisions in the Bill, which we feel is not properly thought through. As you can appreciate, we have genuine concerns about the Bill. We thank the Committee for listening to us this morning.
387. The Chairperson: I want to pick up on your final remarks. You asked why the Government here think that they know better than the Government in Westminster. It is the right of this Assembly to decide what it thinks is best for Northern Ireland and its people. That is the nature of the devolved system, so I do not take particularly kindly to being lectured about what —
Another
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428. Mr F McCann: That makes it more essential that we have some type of scheme brought in to control the sector. It is totally unaccountable; it is not transparent in any shape or form. When a community group in my area got £30,000, they were pestered and crucified by accountants and auditors. There is around £90 million going into the private rented sector with no controls whatsoever.
This post has been edited by 2buyornot2buy: 14 March 2012 - 03:59 PM
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