The case against landlords

Posted on September 16, 2011 by | 22 Comments

Let’s face it: nobody wants to live in private sector rented accommodation. This is the type of housing which provides the least secure forms of tenure, and where the worst living conditions can be found. If you rent your home from a private landlord, you’re almost certainly not there by choice, but because it is the only option you’ve got. For those of us who don’t qualify for social housing, and don’t have the magic combination of income, savings, and long-term job security needed to buy property, it’s a choice between the private sector or living with your parents indefinitely.

There are now a much greater proportion of households living in privately rented accommodation than there were ten years ago. In Scotland, the percentage of households in private rented accommodation went from 6% in 2000 to 11% in 2010, while in England the figure jumped from 9% in the 2001 census to an estimated 14% today. As their numbers have increased, tenants had to take the blame for the problems this causes – in particular, younger adults living in shared flats, who are accused of pricing families out of the market in some areas – but the real cause of the problem is less commonly discussed: the reason we have more tenants is because we have more landlords. There are only a finite number of homes available at any one time, and if some of those are owned by landlords, it means they’re not available for owner-occupiers. Since we don’t have a surplus of housing, people are going to need to live in them as tenants instead.

Landlords and property developers have created a vicious cycle which benefits nobody but themselves. Demand for housing is high, which pushes up the market value of property. This makes it more difficult for prospective owner-occupiers to get on the property ladder, so they have to continue renting for longer, which in turn more demand for rental properties, allowing landlords to charge higher rents. As rents increase, buy-to-let becomes a more lucrative investment, so more people want to get in on it, increasing the competition for any houses which are for sale, and increasing the market price of houses. Not only have they created this cycle, but landlords have to perpetuate it in order to make a profit from their investment. When house prices stagnate, they stop making money.

We’ve become so used to the existence of private landlords that nobody thinks to question what they are for. A landlord is someone who makes a profit from their tenants’ basic need for shelter; they take their wealth and invest it in a way which forces their less affluent tenants to give them even more money. Most people on the left of the political spectrum are opposed to the privatisation of public services because we don’t think it’s right for companies and shareholders to make money from things like education or healthcare, so why do we accept that landlords should make money from housing? They don’t create houses – they just own them – and it’s not as if the buildings would cease to exist under a different model of ownership.

So why not ban landlords, or, at least discourage them by limiting their ability to profit from owning other people’s homes? Landlords don’t provide any social benefit, and I find it quite difficult to come up with a justification for continuing allow people to invest money in this way. Unfortunately, the coalition government wants to increase the amount of housing owned by private landlords as they run down what remains of social housing provision. Given their attitude towards regulation, it’s unlikely that this will do anything to improve the lives of tenants, who already have to put up with problems like disrepair and intimidation. Speak to anyone in their twenties about landlords and you’ll get a catalogue of horror stories, which will only get worse if more people are forced into the hands of the rentier class.

Our present system for allocating housing is socially damaging and deeply regressive: it concentrates wealth with those who are already rich, compounds inequalities, and brings generations into conflict with one another. As long as we think of houses as a way of making money, rather than things to live in, the system will be skewed towards generating profits instead of providing everyone with a suitable place to live. Yes, we need more houses – and more importantly, we need more decent houses – but in order to find a proper long-term solution, we also need to ask some difficult questions about ownership.

Read Cllr Samir Jeraj’s response to this post, A very British problem, or, how I learned to stop worrying and love renting.

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22 Responses to “The case against landlords”

  1. Andy WightmanNo Gravatar
    September 16th, 2011 @ 9:13 am

    It is not a simple question of abolishing landlordism. In Germany, over 60% of people live in rented accomodation. the landlords can be private, co-ops, municipality etc. In broad terms the German model is better because far more capital is liberated for investment in the economy and jobs. In UK, over
    £ 1 trillion is tied up in land and property by private owners who have bought their own property making them wage slaves to the banks.

  2. Eveline van der SteenNo Gravatar
    September 16th, 2011 @ 9:29 am

    I have lived in Liverpool in privately rented accommodation for five years. I must say that both private landlords I had were brilliant. Their rent was reasonable, the apartments well maintained and whenever there was a problem, they came to sort it out immediately.

    This is not to say that all landlords are saints, but on the other hand, not all landlords are villains either.
    And, let’s face it, there are tenants from hell as well…..

    The problem is that this aspect of housing is barely regulated. In countries like Germany and Holland there is much better regulation both for landlords and for tenants, as well as caps on private rents. But god forbid that this government would ever regulate anything….

  3. MattNo Gravatar
    September 16th, 2011 @ 10:34 am

    I have some issues with this article.

    First, your opening sentence: “nobody wants to live in private sector rented accommodation”.
    There are other reasons for living in private rented accomodation as well as not being able to buy. A couple very quickly off the top of my head:
    1. Not having the responsibility of maintaining the property
    2. Unsure where you want to be in the future so don’t want to be tied down to owning a property which you’d then have to sell to move, as opposed to simply handing in your 4 weeks notice
    3. Not obsessed with the idea of having to own a property, so never considered buying.

    Whilst there will be people ‘having’ to rent, there will also be many doing it by choice.

    Second, it reads as though you’re stating all private sector landlords are of poor quality. As with all these things there are of course some very poor landlords, and there are some really excellent ones, and everything on the scale inbetween. My personal experience of landlords is excellent.

    Third, with the decline in the value of traditional pension schemes looming, investing in property to let is now one of the safest ways of securing a retirement income, and I say fair play to that.

    Fourth, you say the real cause of this ‘problem’ is a lack of property to buy because its all been bought to let. Now, I haven’t completed a study of all the UK, but certainly in my area there is no shortage of property for sale. I recently bought a house and there were stacks available to choose from, at all ends of the market.

    5. You say that the rental market is driving prices up. In my area prices have stagnated and in some cases been dropped. I certainly got a bargain on my property.

    6. Not all landlords are looking for house prices to increase to make money. In fact, I imagine for many who are in it for the long term rental income they want prices to stay low so they can purchase more property to let. Landlords make their income from regular rent, so the smaller their mortgage payments, the bigger their margins are. (Although I do accept there are others not so interested in rental income who want to sell on at a profit)

    Basically, I agree with you that the market could be better regulated – certainly in other countries where renting is far more widely accepted they have much better protection for tenants, which is one of the reasons why more people choose to rent there.

    I also agree that it is damn hard to get on the property ladder, which does force some people to rent.

    But, I disagree with your fundamental argument that provate landlords are too blame for all this.

    Do you notice how, way back when, house prices lept up as it became more common for households to have dual earners? Property developers went “Ooooh, more disposable income per household, people can afford higher prices now so we’ll have some of that…” and put house prices up. The banks followed suit and offered stupid mortgages for over valued houses, and it all escalated from there in a big fat property and mortgage bubble. That’s your fundamental cause. Landlords are just making the most of an opportunity presented to them because of it.

    Also, I should state I’m not a landlord myself. It’s just that my experience of the private renting market, and influences surrounding the issues you talk of, are in some cases a long way away from what you are proposing.

    Happy to be challenged on that, which I’m sure you will! ;)

    Thanks

  4. DanielNo Gravatar
    September 16th, 2011 @ 10:54 am

    Not all landlords are in it to make profit and oppress poor people. I am a landlord simply because I could not sell my property and cannot afford the mortgage (plus the rent on the place I live in) without rental income.

    There are *quite a few* legal hoops to jump through as a landlord – most of which are slanted in favour of the tenant.
    Unfair tenancy terms, including excessive rent, can be deleted or modified by a Rent Assessment Committee:
    http://www.direct.gov.uk/en/HomeAndCommunity/Privaterenting/Problemsanddisputes/DG_191684
    Repairs are a legal responsibility and various authoritarian types will intervene if the tenant cries foul:
    http://www.direct.gov.uk/en/HomeAndCommunity/Privaterenting/Repairsandstandards/DG_189194

    There will always be some bad landlords just as there will always some bad . To tar all with the same brush is, at best, naive and, at worst, insulting and offensive.

  5. Adam McGibbonNo Gravatar
    September 16th, 2011 @ 11:06 am

    Great article, very interesting perspective. I work day in day out dealing with slumlords, and I hadn’t considered the inherently regressive nature of what they do. Regulate them ten times more than what we currently do is the solution.

  6. AngusNo Gravatar
    September 16th, 2011 @ 11:09 am

    Matt:

    >>Not all landlords are looking for house prices to increase to make money. In fact, I imagine for many who are in it for the long term rental income they want prices to stay low so they can purchase more property to let.<<

    I don't think this is the issue here. The problem is that if you are rich enough you have the capital to buy a house in addition to the one you live in and put it up for rent. You are reducing the supply of houses. This pushes up the price of housing. You want a return on your investment so you put the rent at a price reflecting the value of the house.

    So landlords push up the price of buying by reducing housing supply. Then they push up the price of renting by matching the rent to the price of the house.

    Landlords might individually want prices to stay low but their activities drive them up. And it doesn't do them much harm: all high house prices mean is a higher initial capital investment – which of course they then deal with by increasing the rent they charge.

  7. Gavin CorbettNo Gravatar
    September 16th, 2011 @ 12:00 pm

    It is difficult to see how to abolish landlordism without eradicating ownership. If someone owns a property but goes abroad for a year surely it is reasonable for them to let it out, for example. I am involved in a project that is actively trying to encourage landlordism by getting owners of empty property to bring it back into use.

    I would have thought that the problem which the author described (and are real) are to do with land inflation and could be tackled by measures such as land tax. It is hard to credit landlordism with being the sole or main driver of rising house prices over the last 15 years and which has amplified inequality.

    I also agree with the comments on regulation although the experience in Scotland with landlord registration has shown how difficult it is to make that meaningful with over 100,000 landlords, most of whom own one or two properties. So I would also look at strengthening the hand of consumers which in the PRS is very weak, through tenancy reform, right of access to deposits and improving information to tenants.

  8. MattNo Gravatar
    September 16th, 2011 @ 12:36 pm

    Hi Angus,

    I know there is a shortage of affordable housing that we need to deal with, and I know that houses are massively over priced. What I’m saying is that I don’t think the argument that private landlords are “the real cause of the problem” as Alyson stated, is correct. I think it’s just a symptom of something far more fundamental.

    House builders/sellers and banks were allowed to charge opportunistic and increasingly unrealistic prices for houses in line with increasing household incomes without being challenged or regulated. That is what has now made the housing market unreachable for so many millions of people. Add into that some other subsequent genuine cost increases (e.g. contruction costs) and we have our problem.

    Private landlords have been presented with an opportunity to provide housing for millions of people who would otherwise be unable to live there because they can’t get on the housing market themselves. Sure, they make some money doing it, and there may well be some truth that as a result of this there are fewer houses left on the market for purchase, which might have some affect on prices, but this certainly wasn’t the original cause of the problem, and to be honest what does it matter how many houses are on the market if no-one can afford to buy them anyway, which, unless the root problem is challenged, will continue regardless of what private landlords do.

  9. Paul PerrinNo Gravatar
    September 16th, 2011 @ 2:56 pm

    Your perspective is massively skewed – maybe its just a Scottish experience that you describe.

    My experience in the South-East and London is entirely different.

    Most people here are mobile, they move jobs, they change circumstances and want to flip between properties as they do so.

    Being in a house share is a fantastic social experience for people in their first job starting out in life.

    ‘Social housing’ is no use for this either – as the individual will have no history in an area and will probably moved on long before they ever got anywhere on any list.

    Private landlords offer an amazing opportunity for these flexible, hard working, go getting people who create the wealth that make this country work at all.

    Maybe for people who expect to live in one place for ever, and expect to live on benefits if work doesn’t come to them are your target readership?

  10. JohnNo Gravatar
    September 16th, 2011 @ 3:35 pm

    A couple of things:

    i) As mentioned elsewhere in the comments, not all landlords are Mr. Evil. I think this says more about the authors gripes with authority and an inability to see people who have power as potentially good and/or evil, not just evil. My landlord is very generous, and offer a massively discounted rent price, which is helping me save for a mortgage.

    ii) I will be buying a two bedroom apartment with the intention to rent out one room to help pay my mortgage. Yes, I’ll be making money from housing, but what is so evil about this? I’m helping someone afford housing who can’t yet afford to buy? As long as I’m fair, I don’t see anything wrong with providing this service. Other countries have a 20% to 40% renting population.

    iii) I agree that there should be regulation of landlord, just as there ought to be with capitalism in general. I think rent ought not to exceed overall costs of maintaining the property (mortgage, repairs etc) by more than 15%-20%; and rented room ought to be of a certain standard.

    interested to here others’ opinions on this…

  11. JohnNo Gravatar
    September 16th, 2011 @ 3:46 pm

    I need to make a correction, when I say cover costs on maintaining property, in terms of my plan to buy and rent out one room, I intent to “half” this cost with rentee. Eg. If mortgage was £800, I’lld pay £350, they’d pay £450.

    Do people think this is fair, or not? I’m genuinely curious and open to rethinking my ideas….

  12. jon bNo Gravatar
    September 16th, 2011 @ 4:34 pm

    I think some people in the comments seem to think there is a moralising tone in the article – i dont see that.

    There is an economic case against private landlords, even if they are nice people. The economic relationship is one which is not beneficial for tenants. Think of how much lower rents would be if tenants were not supporting the standard of living of a landlord.

    Fully mutual housing cooperatives would be a much more progressive form of housing, where tenants are the landlord. I would like to see a scottish housing policy, where private landlords are bought out, and their flats are made into coops.

  13. AlysonNo Gravatar
    September 16th, 2011 @ 4:46 pm

    Okay, here are some responses…

    Andy Wightman – I’m fully in favour of having more social/co-operative housing. The points I made were aimed at private landlords, rather than rented accommodation in general.

    Eveline van der Steen – More regulation might improve conditions, but it would be a good start if current the current regulations were enforced properly. Any increased regulation would, of course, have to be accompanied by rent caps, otherwise it would just increase rents further (as happened when HMO regulations were introduced).

    Matt – I never said that landlords were entirely to blame for the increase in house prices. What I said was that private sector tenants (particularly younger adults) are accused of causing social problems by “choosing” to live in rented accommodation, and that it is actually landlords who are to blame for these problems.

    Women were in the paid workforce long before the property boom, so there’s not necessarily a correlation there. In dual-income households with children, a lot of their income can be swallowed up by childcare costs, so having a second salary doesn’t always make a lot of difference.

    Private landlords do not “provide” housing for anyone. They own the houses, but they do not do anything which encourages an increase in provision.

    Daniel – While landlords may not *consciously* be oppressing their tenants, they are taking part in a system which causes oppression. And it’s not easy for a tenant to get redress if they’re being treated badly by their landlord. It’s not as if they can ring up the council and someone will swoop in to sort out the problem. Often, tenants are told that it’s easier to move (a process which takes time and energy, and requires a large chunk of ready cash) than get problems resolved. It’s immensely stressful for the tenant, and can end in them being forced out.

    Gavin Corbett – we could get rid of private landlords if viable alternatives to buying a house, such as co-operatives and social housing, were more widely available. Rather than the rents being used for private profit, any surplus could be put into expanding and maintaining provision.

    Paul Perrin – he’s a former UKIP candidate with a grudge against Greens, and I don’t believe in feeding trolls; it only encourages them to come back.

  14. MattNo Gravatar
    September 16th, 2011 @ 4:54 pm

    Hi Alyson,

    Thanks for the response. Good point on the dual incomes, although I’m still convinced there is a correlation here. Not sure I agree with your overarching views re: private landlords, so I guess we just need to agree to disagree, but it has made me think about it, which I suppose is the whole point…

    Have a good weekend.

  15. AlysonNo Gravatar
    September 16th, 2011 @ 5:32 pm

    John – Does the word “evil” appear anywhere in my post? I think you’ll find that it doesn’t. My current landlord has seemed quite personable on the few occasions when I’ve had any direct contact with her, but my problem is with the overall system rather than individuals (although there are some pretty awful individuals letting out flats as well).

    I’m not sure about how your school taught fractions though – the way I learned it, 450 isn’t half of 800. For the record, I don’t think it’s justified that you should make money from your tenant in this way. Rather than offering him or her an “opportunity”, you’re using the fact that you have the money for a deposit to lever someone else into paying more than half of your mortgage and bills. You say that the reason you will be able to buy is because your own landlord has given you discounted rent, but you won’t give someone else the same help.

  16. Peter Mountford-SmithNo Gravatar
    September 17th, 2011 @ 12:01 am

    So many contentious things in this piece. Where to start? At the very beginning, I suppose, a very good place to start.

    [i]nobody wants to live in private sector rented accommodation. This is the type of housing which provides the least secure forms of tenure, and where the worst living conditions can be found.[/i]

    My experience is that some people do want to live in this form of tenure, at least for a period – maybe for life in other countries, but I’m thinking mainly of the UK in this respect. And you will find equally bad housing conditions, sometimes worse, in the owner occupied sector, especially among elderly and impoverished owner occupiers.

    [i]the reason we have more tenants is because we have more landlords. There are only a finite number of homes available at any one time, and if some of those are owned by landlords, it means they’re not available for owner-occupiers.[/i]

    The number of tenants is not a function of the number of landlords. And the trade-off between selling a house and keeping it to rent tends to be determined by a calculation of likely yield. The properties which could at any moment either be rented or sold will be either rented or sold largely according to which looks best, unsurprisingly. Your comment, on the other hand, reads as though you think decisions on entering the rental market determine the number of properties available for sale, as though it’s the driving factor; but you don’t explain this unusual hypothesis.

    [i]Landlords and property developers have created a vicious cycle which benefits nobody but themselves. Demand for housing is high, which pushes up the market value of property. This makes it more difficult for prospective owner-occupiers to get on the property ladder, so they have to continue renting for longer, which in turn more demand for rental properties, allowing landlords to charge higher rents.[/i]

    I suppose you are discussing a few areas of the country only. Demand in many places is flat, or negative. Property prices are falling in many areas. Interest rates are at lifetime low levels. The reason people can’t get on the property ladder is to do with the availability of credit, not landlords and property developers (by the way, you do know that property developers want people to get on the property ladder? Or “treadmill”, as some call it).

    [i]As rents increase, buy-to-let becomes a more lucrative investment, so more people want to get in on it, increasing the competition for any houses which are for sale, and increasing the market price of houses. Not only have they created this cycle, but landlords have to perpetuate it in order to make a profit from their investment. When house prices stagnate, they stop making money.[/i]

    Rental profits are not simply a function of house prices. Both are related to the state of the market of course, but rents are more the residual than the driver, in the conditions of the UK market in recent decades. If my house is worth x, would I be better to sell it, or rent it? Increasing sale prices makes it harder for people to enter owner-occupation and therefore increase demand and price for renting, but also increases the incentive to sell a property and make a capital gain. You seem not to recognise the cost of ownership (some of your other comments suggest you see it as a pain-free and cost-free route to capital accumulation, which might explain this), but in fact people with a choice between renting a property and selling it will carefully weigh up the pros and cons of both routes. Whether you can make money from renting is not solely and directly dependent on whether house prices are rising.

    [i]We’ve become so used to the existence of private landlords that nobody thinks to question what they are for. A landlord is someone who makes a profit from their tenants’ basic need for shelter; they take their wealth and invest it in a way which forces their less affluent tenants to give them even more money.[/i]

    A farmer/food manufacturer/cafe owner is someone who makes a profit from their customer’s basic need for food; they take their wealth and invest it in a way which forces their less affluent customers to give them even more money. Transport, clothing, etc etc. Well yes, that’s rather how it works. Your criticism appears to be about the capitalist system per se, but you address it to landlords specifically. Do you not think any aspect of the control and distribution of any scarce resource could be challenged in this way?

    [i]They don’t create houses – they just own them –[/i]

    If Persimmon or Charles Church practised vertical integration and became landlords, would that be ok? Why is creation of housing better than managing housing? Actually, most of the profit-skimming takes place at the creation stage, most value-creation via management, in many peoples’ eyes.

    [i]So why not ban landlords, or, at least discourage them by limiting their ability to profit from owning other people’s homes?[/i]

    We do ban landlords, when they have acted badly enough (though it has to be pretty bad to take control of their property), and we do limit their rent, in some but not all circumstances.

    [i]Landlords don’t provide any social benefit, and I find it quite difficult to come up with a justification for continuing allow people to invest money in this way.[/i]

    No, they do provide social benefit, and also social harm. Depends on the case, like most things. It’s a bit odd that you seem to deny the possibility of benefit apparently on the basis of an abstract classification of landlords – a bit of evidence and rational justification would be welcome.

    [i]the coalition government wants to increase the amount of housing owned by private landlords as they run down what remains of social housing provision[/i]

    Not that I can speak for them, but they seem to continue the fetish of the last 50 years with owner occupation as opposed to social renting. I don’t see evidence that they want to increase private renting per se.

    [i]Speak to anyone in their twenties about landlords and you’ll get a catalogue of horror stories[/i]

    Break out of that narrow demographic. Speak to other people, even people you don’t already know. People with a bit wider experience. You will find a catalogue of horror stories spanning all sectors, not just private landlords.

    [i]As long as we think of houses as a way of making money, rather than things to live in, the system will be skewed towards generating profits instead of providing everyone with a suitable place to live. Yes, we need more houses – and more importantly, we need more decent houses – but in order to find a proper long-term solution, we also need to ask some difficult questions about ownership.[/i]

    Yes, I agree. But this premise/conclusion seems curiously unrelated to the content of the piece.

  17. Eveline van der SteenNo Gravatar
    September 17th, 2011 @ 12:18 pm

    Alyson,
    Existing regulation does nothing to protect tenants from the extremes caused by the market. In the Netherlands (and I think in Germany as well) rents, also in the private sector, are determined by the size and quality of the property, regardless of the market. Rents in the ‘free sector’ have to top the standards in the ‘capped’ sector. Situations such as prevail in London at present, would simply not be possible.

  18. MattNo Gravatar
    September 21st, 2011 @ 10:50 pm

    Alyson

    Ehere are you writing about – England or Scotland (they are very different)?

    I think it’s nothing like as clear cut as you suggest.

    For example, in both countries, a landlord has to give more notice than a tenant even in the most insecure form of Tenancy for a rented property (unless T is a lodger and L is resident).

    In both LL has to give at least 2 months’ notice, and *then* apply to a Court for possession, unless an agreement has been reached or there

    In any case decisions are made by Judges in Court, even if there are months of arrears or anti-social behaviour etc.

    In England, if the T does not wish to leave quickly it takes around 3-5 months to go through the process. I don’t know the practical timescales of the process in Scotland.

    To illustrate that it is not quite so one-sided as you suggest, one of the side effects of that is that there are thousands of homes empty where Ts have flitted and L has to go through the Courts for months to avoid the risk of T reappearing and claiming illegal eviction.

    Since if L does not follow the legal process to the letter, it is potentially a criminal offence.

    One more I’d add is the cost of regulatory overhead. If that is applied unintelligently, then rents are pushed up unnecessarily.

    For example, the Landlords’ Registration Scheme in Scotland has cost £18 million, iirc. Where do you think that money came from?

    When I last checked I think that the number of landlords excluded was in single figures over a period of several years.

    That’s a lot of money for tenants to pay for a small number of regulatory ‘hits’.

    Rgds

  19. Alyson MacdonaldNo Gravatar
    September 21st, 2011 @ 11:32 pm

    Matt – I’m not familiar with the law in England, but I’m sure that you still have the same problems down south with landlords who don’t operate within the law. In Scotland, a landlord can give a tenant two months notice to leave, and if the tenant decides that they want to stay, then it is relatively easy for a landlord who has the financial means to pursue the matter through the courts, whereas tenants can often find it nigh on impossible to get legal advice or representation. Even where the tenant can pay, solicitors don’t want to take them on as clients because they don’t want to lose the business they get from landlords. The few providers of free advice are so over-stretched that it can take weeks to get any help, which doesn’t do much good if you’re being harassed by a landlord who doesn’t care whether or not he does things by the book.

    The laws on paper are often in the tenant’s favour, but it can be very difficult to have those rights enforced. For example, Scots Law states very clearly that it is illegal for a landlord or letting agency to charge a tenant for anything other than their rent (see this handy explanation from the Govan Law Centre http://govanlc.blogspot.com/p/scottish-tenancy-charges.html) but it’s common practice for fees to be charged. There is so little enforcement that plenty of letting agencies openly advertise the fact that they charge fees, and face no consequences.

    The Landlord Registration Scheme and HMO legislation have led to some improvements, but there are still plenty of landlords who don’t register. When it comes to standards of accommodation, the problem is not with enforcing rules on landlords who are open and willing to comply with the law, but with those who find it all too easy to break the rules and not get caught.

  20. MattNo Gravatar
    September 22nd, 2011 @ 6:51 pm

    >For example, Scots Law states very clearly that it is illegal for a landlord or letting agency to charge a tenant for anything other than their rent (see this handy explanation from the Govan Law Centre http://govanlc.blogspot.com/p/scottish-tenancy-charges.html) but it’s common practice for fees to be charged. There is so little enforcement that plenty of letting agencies openly advertise the fact that they charge fees, and face no consequences.

    I’ll try and come back on your other points, but for now that strikes me as being a very strange law, which I’d guess we lost in England in the 1980s. Perhaps it wasn’t carried over from protected tenancies to assured tenancies (?)

    I can see some sense in that restriction on regulated tenancies, where LL may be looking for loopholes.

    So the landlord is effectively required to guess what the setting up charges will be, guess how long the tenancy will be, divide the one by the other, and add that to the rent at the start when they advertise.

    And if the law is followed the Tenant has no way of knowing what those charges have been.

    And I suppose that agents have no incentive to be efficient and keep their prices down, either.

    The charges always go on the rent of course in the end, because there’s nowhere else for the money to come from.

    Personally I prefer the approach where it is all identified openly.

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    January 12th, 2012 @ 6:30 am

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