Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:10] Speaker B: Let'S Talk let's an original podcast from the Lettings Hub. Welcome to the latest episode of our podcast, let's Talk Let. I'm Heidi, the CEO of the Lettings Hub, the tenant referencing business that got good at tech. Let's Talk Let is our regular roundup of news and views on a whole range of subjects spanning the private rental sector. In this session today, I am thrilled to be joined by two guests, industry legend Ben Beadle and James Kent. Many of you will know Ben as the Chief Executive of the NRLA and I think it's fair to say a very prominent voice in our sector. And James Kent, who works alongside Ben as NRLA's Chief Innovation Officer. A membership organization, the NRLA has more than 100,000 members and it leads a debate around the future of our sector. Ben in particular has been one of the key voices in the market advising on the impact of the original rental reforms and now the Renters Rights Bill.
Although as with every organisation, I'm sure Ben has been well supported by the whole of his team in developing robust challenge and explaining the consequences and issues that may come about when the bill is introduced. That's a little bit about the nmla. Ben and James, please introduce yourselves to our listeners and tell us a little bit more about you.
[00:01:28] Speaker A: Heidi, thank you very much. Ben Beadle, proud chief executive and long suffering landlord. Been in the business for over 20 years. I have the hair to show for it as well. We're a represented body, 110,000 members. Our members have about a million or so homes and our role is to not just champion the work that responsible landlords and agents that they provide and do, but also to provide some of the services that are integral. You know, there's not many people talking up the private rented sector.
I think it's a good place to be. I think we do a great job. Can we do better? Of course we can and that's what we're here to do.
Brilliant.
[00:02:16] Speaker B: Lovely. Thanks. Ben and James.
[00:02:19] Speaker C: Yeah. Hi, Heidi. Yeah, I'm James. I'm not nearly as distinguished as Mr. Beadle over there, but I am the Chief Innovation Officer for the nrla. I have a very practical startup background and I've joined the NRLA a couple years ago now to help with the change and the digital solutions that the NRLA are providing for landlords.
I get to see so much of the inside when it comes to the private rental center, like Ben said, and I think there's so much that we can still be doing for it. So I'm excited to be part of it, I guess.
[00:02:56] Speaker B: Then with 2025 being pipped as the biggest change in 30 years. You've got a pretty busy job at the minute then, James, in terms of how much landlords are going to need you.
[00:03:08] Speaker C: Absolutely, yeah. Like I said, I mean, I think we're already just beginning as well what the NRLA can do, what we're trying to provide. Like I said, my job is to not only lead a change in the organization, but the sector as a whole, but to provide the tools and the solutions. So the safe tools, the portfolios, the digital platforms that we all know are going to be more of a safety net than just a solution.
[00:03:37] Speaker B: Okay, Fab. Now, at the time of recording this pod, we're pending a date for committee stage for the Renters Rights Bill in the House of Lords. But even before that reading, I think we can all agree there is definitely some uncertainty across the sector. I think it's in the news every day in our industry press with something about it and different people releasing statistics or views on what it's going to mean.
But what actually have the reactions of landlords been?
[00:04:07] Speaker A: Well, I think there's, across the membership, people just want to know what the new rules are going to be.
I think there's two schools of thought. There's people that have been in the business for a long time who might ordinarily be thinking about cashing in their chips or moving on. And this is yet another thing that maybe makes them accelerate that sort of thinking in that it's perceived to be very complicated, perceived to be very onerous, and if you get it wrong that the fines and penalties are particularly punitive when it comes to the Renters Rights Bill. And then you've got the other school of people who are in it for the long term, they can deal with the regulations that are coming. They want to be able to adapt, get ahead of the game. They just want to have all the uncertainty over. I always liken this. Heidi is going to visit my indoors often. The thought, thought of going to see them is much worse than the reality. And I suspect that there's landlords out there that are looking at the Renters Rights Bill absolutely petrified and worried about it, but actually when they know what the final rules of the game are, they can adapt, they can make some changes, they can crack on. And I think that's the sort of two camps that we're seeing.
[00:05:28] Speaker B: And are more landlords aware of it now than three months ago, six months ago? You know, is it becoming a prominent kind of topic of conversation when landlords, when your members are contacting you.
[00:05:41] Speaker A: Well, I mean, frankly, if there are people that are in the lettings business that haven't heard of the renters rights bill, they probably shouldn't be landlords, to be honest with you.
You know, if you've been under a rock or in a cave, you might have missed a little bit, but otherwise I think you would have done well to avoid some of the stuff that's been going on. It's been, you know, front page, been on all of the mainstream channels repeatedly. And actually when I look back at some of our media stats for the last year, we've had about 6,000 media mentions, really high quality media mentions as well, where we've been talking about not just renters rights, but pets, cost of living energy, you know, the whole shebang. There's lots of things that are going on in the sector. So I do think that landlords are rightly aware and those that aren't, frankly should reconsider their business models.
[00:06:43] Speaker B: Yeah. In terms of the bill as it stands at the minute, there are obviously, I guess, some more controversial parts than others. And if you kind of had a wish list of 1, 2, 3, maybe Ben and James, of the bits that you really would like to see change, what would they be?
[00:07:01] Speaker C: So I think that's a good question. I think number one for me would be the, the rent in advance. I think they haven't quite thought that one through when it comes to a lot of the foreign students or, or students in advance really as a whole, I think that there's that security over having, I mean, Ben, you've told us lots of times your, your, your experience of, of having, you know, overseas students wanting to pay that, that year in advance because they don't have a UK guarantor, they don't have any proof that they can afford the rent. So what they do is they give you a year, year up front. So it's good for the landlords, good for the tenant. So it's a, it's a win, win. But I think if we were to get rid of that, I think a lot of people may struggle.
[00:07:45] Speaker B: Yeah. So that would be your number one. How about you, Ben?
[00:07:49] Speaker A: Well, I think, I think for me good things come as a three. So I'm going to say three things because I think it's, I think it's very much a, a package. I think it's implementation, court reform and students for me, and in that order, I think there's a real possibility that we could repeat the car crash that the government got wrong, so badly wrong in Wales with Clifford's short implementation periods generally making up stuff on the hoof secondary legislation that nobody knew what the hell was going on and what they had to do. The sector needs time, Heidi, to be able to, you know, the sector is an anti change they want to make. You know, the sector wants the changes to work and in order to do that you actually have to have a sensible time frame. Less. Less so of an issue with a landlord for one property. More so of an issue if you're Foxtons with hundreds of thousands of tenancies where you're going to have to serve new documentation. So. So to me, we won't get it, by the way, but I still like the idea of a two phased implementation, new tenancies and then a date in the future where you catch existing tenancies. And linked to that is court reform.
We know that the system is broken and on its knees. Not my words, but the words of the Housing Minister, Matthew Pennicook. So it's inconceivable to me that you would want to load the system up when you know it's already dysfunctional to such an extent. And I think that you can actually mitigate against that by a sensible implementation period. We know that there's going to be many, many more hearings and we know that landlords are waiting typically a year to get possession of their properties. That doesn't strike the right balance to me. And if you are, you know, next door to somebody that's suffering at the hands of antisocial behavior and so forth, you don't want to wait a year to get those, those people out. And linked to that is the first tier tribunal. They typically deal with about a thousand or so rent challenges.
Well, as it stands at the moment, we expect that to increase significantly. And that's a system that is antiquated, needs investment. So I think this is about the practicalities. It's not saying don't do it, it's saying, well, let's do it in a phased way that gives the. Gives landlords and letting agents the room to actually help get these things right. And lastly on students, we need to protect the cyclical nature of the student market. It's as simple as that.
[00:10:32] Speaker B: Yeah. Not just for HMOs.
[00:10:35] Speaker A: No. And that's one of the amendments that we're working very hard on behind the scenes.
We absolutely want that ground for a.
I mean, I have to say the ground is only one part of the solution, as you Know, Heidi, you know, for me, you know, it's like strawberries without cream. The issue with the student sector is, you know, I'm not so worried about people not moving out, but I still want to have the ground, actually.
I'm worried that they might leave at a time where you're not able to re let the property and that's a problem for the next set of tenants as well. And we know the student sector is short of accommodation, so we need some practical solutions and I hope that the Lords are going to deliver on that.
[00:11:20] Speaker B: Yeah. And do you think they're listening? Is anybody listening or is what we see now very likely to be what is implemented? How much wiggle room do we predict there might be?
[00:11:38] Speaker A: There's a little bit of wiggle room, but we have to remember that Labour have a significant majority, so even if a load of amendments come back, they're not duty bound to accept them. They could get them through given the significant majority that they already have. But I do think the Lords have got a role to play and, you know, it won't surprise you to know that we are speaking with a number of Lords around a number of amendments, but they're not going to be significant amendments. What we see in terms of the Bill at the moment is going to be, by and large, what we're going to end up with. What we hope is to kind of roughen out. Oh, sorry, buff out some of the rough edges, I guess, like on the student ground, for example, which, you know, to your from somebody kind of looking from afar may well think that, you know, that's not going to be a big win, it will be a moderate win, but we have to be realistic what we ask for.
[00:12:34] Speaker B: Yeah, sure. And I think going back to your very first point, you know, everybody is being told, get ready, get ready, it's coming. But it's so hard to plan, you know, when you don't actually know when to your point and how it's going to be. Because I think all of us could take the legislation as it stands at the minute and make plans and, you know, I hope everybody is really, because otherwise there's going to be a shocker. But it's still hard to understand how it can be implemented.
I'm going to go back to Advanced Rent, if that's okay. And obviously, James, I am with you on. That's obviously one of our concerns. As a referencing company, we obviously reference people of all walks of life. Every single circumstance and every single person's situation is different actually, as we kind of Process them.
Sounds very awful, but process them through the system and try and work out whether they're going to be good to pay the rent for the tenancy term that kind of goes forward. And the abolishment of the fixed term tenancy with the advanced rent is kind of where we then have the problem because we don't really know how far we're referencing people in advance at all anymore. But there is 7% of all tenancies that go through with rent in advance. At the higher end it's 15%. So the higher end of the rental spectrum is 15%. Lots of them are foreign students or people from abroad coming in. Absolutely. But there's all different situations. And having done a recent survey with tenants, we actually asked the people that had paid their rent in advance, why did they do it? Were they forced to do it? What would have happened to them if they didn't have that scenario and that option available. And actually the tenants would absolutely love the right to be able to do that, otherwise they know that they would not have been able to secure that home. In the main, there are a few horror stories just to balance it out, but very, very insignificant compared to the majority.
Do you have an idea on whether the rule on advance rent could be changed to work in the sector or whether it should just be allowed to continue as is? Or do we really think it's not going to change at all anyway and it's going to be implemented?
[00:14:45] Speaker C: Well, I think this is where referencing comes into its own right. So landlords need to have that assurance that the tenant can financially afford the property. Nobody's going to want to. Landlords, we don't. We want to be fair. That's the point. We want to be fair. Nobody wants to discriminate. But when it comes to choosing between, you know, a professional income, you know, a professional job with a, with a, with a steady income versus somebody that's just about able to afford it, you're going to want to side to the, to the less risk adverse tenant.
Same, same. When it comes to the whole referencing as a whole, if you don't have the rent in advance or that security, there has to be something else in the market. So whether it's going to another option, so whether there is going to be, whether it is going to work, whether it is going to change, we don't know. But if it's not, there has to be another option. The landlords said that they don't want to discriminate in any way, but they want to make sure at the end of the day that their, their, you know, their property is, is with somebody that can afford it.
[00:15:56] Speaker B: Yeah, Brent, is, is one solution. You know, when we referenced a tenant and if they're falling into the look, it doesn't look like they're going to pass. We definitely consider there's about eight things that actually without, you know, we consider where we might, you know, be able to get them into the home. Agents and landlords are pushing us often to try and make that happen, even for the tenants that are not necessarily the strongest. But there comes a point after, you know, you've considered the rent amount and you've considered if they've got any savings or if there's anybody else or you can move the rent share or whether just, you know, you know, whether they can get a guarantor. After that, you do sit with paying a small shortfall of rent in advance because it's not always the full rent. There's often just partial payments. You know, they might be short 100 pound a month and they pay that upfront for 12 months and then they kind of move in. So we know that usually landlords, absolutely, to your point, don't want to discriminate. They want to, you know, get that tenant in if they've invested that time, by the time it gets to referencing, they've all been shown around the property. They've, you know, had the chat, they've gone through, you know, probably a lot of other tests, you know, potentially their right to rent and other things to get to that stage. Yeah, absolutely, I agree.
[00:17:08] Speaker C: It's back to Ben's point on the court reforms as well, because if you could, then at least landlords had the assurance that they could if they needed to regain back the possession of their property in a timely manner, then again you would be less risk adverse and, and, and take it, take a punt, if you like, on a tenant that as long as you know that you could get it back when you, when you needed to. But this as it, as it stands and with, with the bill as it is, you, you won't have that assurance and you won't be able to get it back. I think the average, I think it's seven months is the average time to get a tenant to get your property back and it's just too long.
[00:17:44] Speaker B: And I think it's not just the court problem, it's the bailiff problem that then follows actually at the moment and from our point of view, you know, yeah, 100% agree. Like, you know, it just feels there'll often Be a time we'll reference somebody and let's say the agent, you know, really would like them to enter the property. And we say, look, we will, you know, pass the reference then if you are, you know, but all things. But we're not willing to insure them. And very, very, very often then it's like, okay, well, I'm not going to do it then, because it's not worth it. I need to make sure my landlord's got protection if they want it.
And that's obviously where, as insurance companies, we also have a minimum threshold. That really, I don't think is going to change. I don't think that that is going to change. And we are going to see rents rise, affordability stretched and potentially more arrears within a backlog court system with Section 13s flying everywhere and the bailiff's situation not looking like it's going to improve. You know, it's not great for insurance companies as they look forward in terms of how much money they're going to be paying out. So they're definitely not going to look to lower the criteria.
[00:18:51] Speaker A: And also, Heidi, just to jump in there, I think, you know, landlords, as James has said, will be pickier. I think there's a real risk, actually, that people. I mean, firstly, you'd think that landlords were going around asking for 12 months rent up front as a matter of routine. Well, we all know that that's a big pile of steaming horse crap. You know, that is absolute rubbish.
The second thing is, I think that if you are forced with the choice, remember we've got government that's leaning on landlords and has lent on landlords significantly over the past few years, particularly where people are fleeing conflict. I have Michael Gove write to us saying, please look favorably on those fleeing from Hong Kong. I don't know if you remember a few years ago, there was political unrest there and people were coming back. You know, they obviously didn't have a job here, they didn't have anything here.
But of course, you know, government were wanting landlords to, you know, extend goodwill and take a risk. And you can only do that, as James says, if you've got some mitigation in place. And I actually took one of those Hong Kong families, did a virtual viewing. He said, look, you know, I've got shed loads of money in, in the bank, but I won't pass your referencing. Seemed like a good egg. Gave me 6 months rent up front. He started paying monthly, got his job over here. Happy days.
I didn't particularly want that six months rent up front. But you know, when you see a face at the end of the, the phone that's desperate to kind of get over here, you know, you, you want to try and accommodate and I think that you will be less likely to do that in this new world.
So be careful what you wish for because government will have to house these people. It's as simple as that. And we know there's a million and a half people on social housing waiting list. So if landlords aren't prepared to take a punt, government should be prepared to house these people. It's as simple as that.
[00:20:52] Speaker B: And that's actually what's really devastating. So when we do have a situation arise where a tenant then isn't paying their rent or they're asked to leave, but mainly it's because of non payment of rent, unfortunately for the landlord, we mediate with those tenants and we have some success. We have actually a good level of success in trying to kind of navigate a way forward, even if it means they're going to surrender the tenancy and move out. And actually that is one thing in the new world where only having to give two months notice to vacate might actually help that situation where tenants don't feel that they've got six months rent ahead of them and they can't see a way out. And it gets worse before it gets better.
But in so many instances when we mediate with a tenant, they will say, I don't want to cause this pain for my landlord, I just am not allowed to leave until I am made homeless. And therefore they sit there not paying the rent. The landlord is, you know, often now got mortgage, the mortgage rates have obviously gone up, so they've got, you know, bigger bills to pay behind the scenes they're getting very stressed about it. Tenant doesn't even want to be doing that. But until they're actually made homeless by the court and then gone through the bailiff actually throwing them out, which sounds awful as a process, they won't get a house. And that bit completely appears broken to me as well. And for us, I know that now for every tenant we have to evict, we do put a CCJ against them to protect ourselves for when they come back round. So it's completely affecting their ability to rent again, you know, for the next six years.
[00:22:27] Speaker A: But I think landlords are duty bound to do that for the next landlord. You know, the reason that you, that you do it is so that you've got a marker there, there is a, you know, people that Lots of landlords will say to me, well what about, what about a tenant register, a register of bad tenants? Well, you've already got one. If you do it properly, if you enforce your, your debt against somebody, there, there's, there's your marker. People, people will then know. I think it's a pity that people get into that situation and I think it's a great, I think it's a travesty that the way that housing is set up that it effectively pits landlord against tenant in terms of, well, you know, I want a social home, I'm not moving out, you're going to have to evict me, I'm going to. The council is going to say, stay put, wait for the bailiff. You know, it's all, it's absolute nonsense and it all comes back, I'm afraid, to a fundamental lack of supply of, of housing costs being driven up. I saw an article yesterday of where I think rents, they've fallen but they're still up 8.7% in the 12 years, sorry, 12 months from January last year.
And you had certain rental groups saying, oh well, you know, landlords raking in yet again. Gotta remind people that actually successive governments that have caused the cost of renting to increase by punitive taxation twitting about on unnecessary regulation, which I'm afraid only costs the end user. And all we see is kind of landlords profits at record lows, but government takings at record highs. And so, you know, rental groups would do well to realize rather than swallow hook, line and sinker, some of these ridiculous statistics to actually look behind them about what is causing those statistics. And this is a classic case of where we, we really have to be careful what we, what we wish for and look hard at the real reasons we're seeing such a housing challenge.
[00:24:33] Speaker B: Yeah, I fully agree. I think just going back to the CCJ point, we obviously work with solicitors as well as obviously our own legal team. It was really surprising to me that less than 5% of landlords were going through that very final part of the process and lodging a CCJ because it costs them money. They're already at the end of the line, they just want the situation gone. So actually it's such the people that do it on purpose, let's say, because there is some people of those just come back around, they're just constantly background and that's obviously where then landlords become particularly cautious. But James, I'm going to come back to your point on advanced rent. I agree. If advance rent isn't a solution, then there has to be something else. And I just want to talk about guarantors for a second.
So there are already some companies that offer to act as a professional guarantor, let's say TLH is about to launch a product as one of those, as well as to help the solution. But there is a little bit of debate about whether that is or isn't going to be allowed in the new legislation. So I want to ask about that. But I also want to ask about an amendment that has been tabled as well about guarantors being able to only sit for six months of the tenancy and then give notice. Now, very recently I recorded a podcast with a Welsh agent, Hannah, and she was explaining to me how in Wales, a guarantor, once they have become a guarantor and the tenancy has started, at any time they can give 28 days notice to not be a guarantor anymore. And I find that, I found that so scary in all honesty, of like, you know, a landlord is letting somebody in, knowing that somebody else is there if it all goes wrong. But that that guarantor can get out of that kind of agreement just by saying they don't want to agree anymore. And I, therefore, I couldn't work out why guarantors don't just do that as a matter of course at the start of a tenancy. So can we talk about guarantors for a second and your views on what might happen?
[00:26:31] Speaker C: Sure. Well, like I said, so without a fixed term, so with the abolition of, well, the removal of fixed term tenancies, being a guarantor, it means it's indefinite. So there does need some sort of clarification around that for sure. I know that there is and Ben can help me on this one. There is some clarification about what happens if the tenant was to pass away. What would happen to the guarantor then. I know that. But if the guarantee, if the guarantor does give notice, then again the landlord is left with no security around, you know, around the tenant. And it does need some work and some. And clarification on it. You know, I know Ben, Ben's been working with the policy team to try and help with the policy. So with the, with the guarantors and trying to help with that. Isn't that right, Ben?
[00:27:18] Speaker A: Yeah, that's absolutely right. And I think our view is that, you know, if a landlord, I guess, can't mitigate that risk, if they're not, if you can't even be confident about the guarantee that you're being provided with it's not worth the paper it's written on. So why would you take it? Why would you take it? And so you know, when we, when we look at all of these, all of these things like it's all well and good to have the abolition of the fixed term and the abolition of the fixed term will go, there will be no rowing back from, from this.
I do wonder whether there couldn't be a small moratorium period a bit like we had under the Renters Reform Bill in, in old money. Certainly not to the extent that we had that had agreed back then.
But by having something like that it does give an element of, of security. If you're in the position of where you can't take advance rent and you can't trust the guarantee. Well, we know there's an average of 21 applicants for every property. I'll choose somebody else. It's no problem, no skin off my nose. But it's not going to help those people once again that are not able to demonstrate either their credit worthiness or their I guess financial credentials for sustaining a tenancy. And if you add to that the point that James very validly made that at the end of the process, you know, if you've then got to wait 7, 8, 9, 10 months and bear in mind it's 7 months on average under the current system, in the new system where you're going to need more court hearings and be open to more challenges, it can only take longer, it's not going to get any quicker then I do think that there will be a not insignificant cohort of people that will struggle to find accommodation in the private rented sector.
[00:29:17] Speaker B: Okay. I, I, when, when I was thinking about the advanced rent I, I know that that's a problem based on how many tenants it helps right now but I was thinking that if then a professional guarantor could come in and act if somebody hadn't got one that then for therefore might help not realizing that actually if guarantors are going to not be worth the paper they're written on at all the pool of people that are going to be affected or the risk pool I guess for the landlord is just grown like it's just more than doubled. It's huge.
[00:29:48] Speaker A: And if you can't mitigate your risk Heidi, then you do something else. Right? I mean it's just a straightforward business decision. The difficulty is people are involved and actually despite all of the rhetoric and nonsense that we hear in the media, actually landlords do give us stuff about their customers and Their renters. But, you know, this for us doesn't strike the right balance. You know, it is. I'm not entirely sure what problem we're trying to solve here, but I suspect we will end up by solving whatever problem we think we're solving, I suspect we'll end up with a whole heap of different problems.
And that's why I say, I think there's some things like this that are just, you know, you have to leave to the market. You have to leave to the market. You cannot regulate for every opportunity.
[00:30:42] Speaker B: Yeah. And I must admit, I have been saying, if I was a landlord, I would be asking for a guarantor on each of my lets right now, because why wouldn't I? You know, it just gives. But in the new world, actually there's no point potentially, which is even worse.
[00:30:56] Speaker A: No, that's right. But the other thing is, if you think about the way that this is going to be introduced, which is a, you know, the, the bill will get Royal Assent, there will be an implementation period and then there will be a commencement date. On that date, all fixed terms are abolished. So it's not just about new tendencies going forward, it's also about historic and retrospective tendencies. So does that mean. Well, it does mean. I'm answering my own question. The fixed terms get undone, so they'll all become periodic guarantors that are guaranteeing the rent on that tenancy could well give, give notice. And so what it's going to do, dare I say, is it's going to make, or it should be making people think, you know, if I've, if I'm, if I've got problems or potential problems with my tenancy at the moment, do I need to take some steps before this comes in? And that's exactly the type of stuff we really don't want to happen. I don't want an avalanche of Section 21s going in because landlords are so concerned that they won't be able to mitigate their risk. And that's why I think the Lords have got a huge part to play in saying, okay, we do need to find some solutions here, but we need pragmatism. We need to think about landlords and tenants as a cohesive group. We need to take the ideology and the rhetoric away from the conversation and just say, actually, landlords do not routinely ask for 12 months rent up front.
You know, that, that just doesn't happen. It doesn't happen. And so I do think the Lords can really, really help the situation if Government is prepared to be sensible.
[00:32:43] Speaker B: Yeah. And you know, I am banging the same drum as you in terms of when we reference a tenant today, you know, we will have over 1,000 tenants today, you know, being accepted into properties more than that. And you know they're going to be the tenants that are in when this legislation comes into force and whatever rules we have kind of passed them on, they will be thrown out the window. So, you know, referencing the tenants now correctly is so, so important. And obviously trying to, to get insurance. I'm going to do a bit of a TLH plug here, sorry everybody, but because of rent and legal protection, you know, we talk about it, we suggest every landlord has it, but it's still kind of a min in reality that actually do. I don't know why that is, but that, that is just the way it always has been across our industry. Just getting even a legal expenses policy, we now have them for £15 for agents is a lifesaver in this new world, an absolute lifesaver. If you're not worried about getting the rent paid on time, at least you can get the professional help when it all goes wrong to try and mitigate the situation. The other thing that I could see happening is it ends up being a bit of a postcode lottery because if we look in London at the moment, with the courts as backlogged as they are, ensuring a property in London on a high rent, you know, with a court that has a 10 month wait list has got to be a greater risk for the insurers than one in Birmingham, as I say. So I can see that, you know, landlords, depending on where their properties are, are potentially going to be disadvantaged. But many of our listeners are actually letting agents that kind of listen to the podcast. What advice would you give to letting agents right now in terms of, to their landlords? What should they be doing? Are they going to lose landlords or are kind of more landlords going to turn to agencies to help them as they navigate legislation?
[00:34:35] Speaker A: Probably both.
I do think that, you know, talking to a lot of agents, Heidi, a lot of agents telling us that landlords are, are selling up, leaving, leaving the sector. I know that, I know the government doesn't believe us when we say that, but you know, the coal face and actually knowing what's going on, that's what, that's what's happening.
They probably don't want to wait 6 or 12 months to work out that we were right all along, should think about doing something now to stop the rot. But if I'm an agent, I be quits in When I. That's how I would say it. Massive business opportunity. Massive opportunity for educating your clients, helping them for those that want to stay in the market. Massive opportunity for acquisition.
If you're consolidating and looking at adding to your portfolio and not worried about some of the regulatory risks that are out there, agents got a huge part to play. And similarly, as James said earlier, around the referencing side as well, landlords, whether they are under management or not, are going to be wanting their agent to really look after them when it comes to tenant selection and know all of these little nuances that are going to be incredibly important when the Renters Rights Bill becomes an act.
[00:36:01] Speaker C: Yeah, I can, I can see landlords leaning on agents a little bit more with the tsunami of documents that are going to be coming our way and the changing of, of the contracts and the insurance and the referencing. So the landlords are going to be leaning on the agents for this and for help on this, and the agents are going to be leaning on the software providers to make sure that they're where they need to be.
[00:36:24] Speaker B: Yeah, absolutely. So, just before we finish, Ben, you mentioned earlier about, obviously, some of the amendments that the NLA kind of want to champion and we talked about the student 1. Are there any other key ones that really are top of the list to try and get the government to take into account?
[00:36:41] Speaker A: Yeah, I mean, how long you got? But I think with all of this sort of stuff, you know, you can't give them all of the 20 or so that you, you'd actually like to see. I think there's a very technical one at the moment, which basically you have to sign the tenancy agreement before you can collect the rent. Yeah, don't work like that. I ain't giving anyone the keys unless you give me the money. It's as simple as that. And I don't know what, you know, I don't. Don't go into the Sainsbury's and take my goods and pay you after you're not doing it with, with my asset and that. I hope that that's just, you know, poor drafting.
I'm giving people the benefit of the doubt. But as it stands at the moment, I mean, can you imagine, right, can you imagine, you sign a tenancy agreement, the tenant says stuff, you, I ain't paying the rent.
You've committed to that agreement, you're duty bound to give them a key and to let them in, and then you have to go through a farcical, broken court system that takes you a year to get your property back when you've been utterly and utterly shafted.
So I beefed it up a little bit there, but that's the, that's the problem that we're trying to solve. So we want to see an amendment there.
The other area that I don't think we're seeing amendment but I think there should be is why are we saying to renters it's okay to be four months in arrears before a landlord can take any action? I mean, hello again. What other industry would allow you to be four months down?
I mean that's madness.
And also I listened to the Secretary of State and Housing Minister say, well we're giving landlords robust grounds. No, you're not. You're absolutely not. You're doubling the notice period for serious rent arrears and you're increasing the threshold by a third.
That's sending totally the wrong message. And it reinforces everything that I worried about when the reform bill became the rights bill was that it becomes a rent dodgers paradise. You look at the sorts of stuff that we're talking about. Absolute madness. It's like I've woken up in some sort of bad dream that just won't go away. It's absolute madness. So I want to see an amendment there. There's a few others that I won't bore you too much about. But fair to say that, you know, we've been surveying heavily our members on their sentiment on, on this. But we've got to be realistic about what can be, what can be achieved.
No point going in to bat with, you know, 50amendments. It's not going to happen. I do want to see the student one change. So it's expanded not just to HMOs but any type of student property.
[00:39:45] Speaker C: And also with the students being allowed to use the foray if it's signed before six months, well after, since six months at the moment, unless you, if you sign them up and agree it further than six months in advance, you can't use that for a. Yeah, you.
[00:40:03] Speaker A: Can'T use that grant. That's exactly right. And what that's just trying to do is to call the student market.
All it would do is it will high end up the student market six months beforehand. And you know, I have to say, you know, I've agreed tenancies to non students well in advance of six months before.
If this is a free market, you know, if you want to enter into a contract significantly in advance because you're organized and you're moving from overseas, why the hell shouldn't you be able to do it same with students.
[00:40:38] Speaker B: Yep. We have to change our referencing rules to allow such, you know, future situations. That's probably the best way to describe it. Do you know what I mean? Like we have to do it so far in advance for that reason. People do want to secure and the market is hot and they do want the best properties and so they're going to fight for them. Just to add a little bit more support for the, the specific two points that you've, that you've raised four months, I completely agree with. Again, it's going to put everything, the price up of insurance for the landlord potentially, because insurance companies can't do anything. No one can do anything but talking to tenants and mediating with them. By the time they're four months in arrears, there's no way to recover that you are going to court. You know, there is no way out of that situation because it's already got too bad the earlier that there can be interaction is much better for the tenant. And you know, when we reference people, we do see it as a big responsibility to make sure the tenant can afford the property and we're not letting them kind of enter into a contract that they're going to completely fail to me and then, you know, end up in financial difficulty. So that's the first thing on the, the rent point. Yeah, I again, I agree it's completely, I think it's come out of the advance rent situation again. But do we not just think that agents might just add a clause into their tenancy agreement that says if the claw, if the funds aren't cleared, I'm not giving you the keys and that will get around it. So it doesn't achieve anything anyway by the government kind of suggesting it.
[00:42:03] Speaker A: Well, I mean, I'd rather the amendment was just cleared up because, you know, I think the way that you, I mean, it's basic contract law, isn't it? You know, you have a contract here, you give your consideration, you sign it, job done. Let's not over complicate this stuff that works, that isn't broken. That's basic contract law. So, yes, I'm sure you could have other forms of, you know, clauses in there. But I guess, you know, the other thing is contract can't necessarily override statute, can it? So. So I think it's really important that we just sort the law out first to make it actually work the way it's intended. And I don't think that should be controversial, Heidi, to anybody, to be honest with you.
[00:42:53] Speaker B: I Think one thing that kind of surprised me, in all honesty, of how the policy leads saw it, actually, this kind of rule was quite staggering at the Letters Industry Council. They. They came and spoke about it and they explained it that, well, at the moment, there's one month's take, one month's rent taken in advance, and then the tenant moves in, and then if they don't pay the next month, then the landlord is obviously not in a good state. This is exactly the same situation, but just without that one month being paid. And I was like, well, that is a bonkers way to consider it, really, because for us, it's about making sure that that tenant has got the payment method set up, that they've got the funds to pay that in the first place, and a whole load of other things. But it was very interesting that they've just very much seen it, that, okay, yeah, there's one month's extra rent at risk. That's all. That's the reality for landlords, which was quite mad.
[00:43:46] Speaker A: It's beyond mad. You know, we are in a. An almost satirical parody version of. Of. Of renting. And if it wasn't. If it wasn't so serious, it would actually be quite amusing.
Yeah, it's got to that sort of extent. And, you know, I will say things that I don't think are even remotely controversial and get absolutely pillared in, you know, from. From the other side, you know, about our. Our views. We want these reforms to work. We want to be. We want the private rented sector to be an even better place than it already is. We want to have high standards. We want them to be achievable standards. And we don't want tenants to move into unsafe properties. But the quid pro quo to that is if you're causing misery to neighbors, there should be no notice and there should be an accelerated court process to get you out if you're not paying your rent. You know, we are not a nation of rent dodgers, and it's really, really important that we send the right message to people. If you sign up to something and you do not honor that, then your home will be at risk. That shouldn't be controversial. Why should that be controversial? That's common sense to me. And so I do think, Heidi, you know, we are on the cusp of some very, very significant changes, and it's incumbent on the sector to find its voice, speak to peers, as we are doing, and you guys are doing as well for some modest changes. And they are modest in the grand scheme of things, for the practical Good. And if renter groups can't see that these are changes that are good for the whole sector, they should really think about who they are representing.
[00:45:38] Speaker B: Yeah, absolutely. Wow, that was a jam packed session.
James. Ben, thank you very much. I could talk about it all day. Although I'm sure we're going to get to a point of being bored of talking about it because I think we just are all talking about it so much to try and make sure that we are heard. But thank you very much for all your expertise and for giving all that advice and information to our listeners. For our regular listeners, they will know that at the end of every pod we ask all of our guests if they have a funny story or anecdote just to lighten the end of the session.
[00:46:15] Speaker A: Well, how much I want to.
So I talk in my sleep, okay?
I talk in my sleep. And it's, it's not an attractive part of me, but that's what I do. So I guess it's better than sleepwalking. And there's a lot of people that would say to me, you know, you must talk about this in your sleep. You know, you must kind of, you know, just go through all of those motions. So I can tell you that this week I was told that in my sleep I was having a conversation with Mr. Pennycook around amendments on the renters rights bill, particularly the one that I feel very passionate about, which was the kind of four months down rent. Yeah, I just think that's, that's unacceptable. And I was very animated apparently in my, in my sleep about. That's all I'm going to say on the matter. But for those of you that don't think these things bother me greatly, I can tell you they do. And they bother my little boy when I wake him up ranting around four months in arrears.
[00:47:21] Speaker C: So there we go, campaigning in his sleep.
[00:47:25] Speaker A: Yeah.
[00:47:26] Speaker B: And how about you, James?
[00:47:29] Speaker C: Nothing is. I mean, I tried to have a think about it earlier.
I have a student story very quickly. I had a. Some students that were in, in the student property and I had a phone call once about that. The oven was broken. The oven was broken. It's not working very much, but it was a relatively new oven, so obviously fine. Okay, I'll come and have a look at it. I went down there, I had a look, opened the oven and there was a takeaway box, Styrofoam, everything, and it melted all over in the oven and everything. I looked at the tenant, the student. I said, well, there's, there's a takeaway in there. He said, yeah, but you told me it was a self cleaning oven. And the mind boggles. But it's self cleaning. It doesn't incinerate everything that is in there. It cleans a little bit in there. So I had to add to the, to the, to the inventory. You know, basic appliance understanding was, was, was for the next year. So that's the story.
[00:48:30] Speaker B: Thank you very much. And to ensure you, our listeners, never missed an episode of let's Talk, Let' follow us on Spotify or wherever you listen to your podcast. Please leave us a review if you like what you hear. Thank you, James. Thank you, Ben. And thank you all very much for listening. Let's Talk let's an original podcast from the Lettings Hub.
