The residential lettings sector needs regulating, claim local experts. Tony McDonough reports

LANDLORDS and letting agents in Merseyside are joining the growing clamour for better regulation of the residential lettings sector.

The sector is huge in Merseyside. It is estimated that, in Liverpool alone, there are between 4,000 and 5,000 landlords renting out flats and houses.

Following the announcement in 2003 that Liverpool was to be European Capital of Culture in 2008, the city’s residential property market went crazy.

Investors from not just the city region but also from the UK and Ireland laid siege to Liverpool property auctions.

One such event at the Adelphi Hotel saw hundreds of people locked outside a packed auction room.

This mini buy-to-let boom was fuelled by the widespread availability of cheap credit from banks.

The result was thousands of inexperienced landlords entering the market, and looking to make a fast buck.

Fast forward to 2009 and the credit crunch has halted the sector’s expansion in its tracks.

But the cowboys, in the shape of rogue landlords and letting agents are a major problem, according to those in the industry.

Rigsby, Liverpool-born Leonard Rossiter’s brilliant comic landlord character from the 1970s sit-com, Rising Damp, is still very much with us.

Last year, the Government commissioned a report into the private rented sector. This was carried out by Julie Rugg and David Rhodes, of the Centre for Housing Policy. It concluded that the current regulatory framework was not effective enough.

Enforcement of regulations covering the private rented sector falls on different local authority departments, including trading standards and environmental health. Suggestions put forward include mandatory licensing of letting agents and compulsory registration of landlords.

Richard Globe is wholeheartedly in favour of both of these options.

He has been working in the sector since 1963 – both as a landlord and now as secretary of the Merseyside and Wirral Property Landlords Action Group.

For many years, he has been offering invaluable advice to landlords.

“There are far too many rogue landlords out there,” said Mr Globe.

“All they want is the money and they’re not interested in looking after their properties or their tenants. Many buy-to-let landlords have come into the sector without any experience whatsoever.

“Anyone who wants to become a landlord should do their research first. They should read up on tenants’ rights, health and safety regulations and other laws.

“Many don’t do this and when they end up before a judge because they have broken a law they cannot plead ignorance – it is not a defence.

“This is why I am in favour of a compulsory register for landlords.”

It is for similar reasons that Mr Globe is in favour of regulation of letting agencies.

“Again, you have people setting up letting agencies with little or no experience of the industry.

“Why should practitioners in the lettings industry be any different from those in sectors like law, accountancy or medicine. In those areas, you are not allowed to offer unregulated services.”

Mr Globe is also angry about recent changes to the way housing benefit payments are made.

Previously, housing benefit rent cheques were sent directly to landlords, but since 2007 it has been paid directly to tenants.

This has led, claims Mr Globe, to landlords not receiving any money at all in some cases.

He said: “It is becoming increasingly the case that landlords are reluctant to take on DSS tenants.

“Some tenants have wised up to the fact that they can get away with not paying the rent for eight weeks before the landlord can do anything about it.

“They then move to another rented property and, because of data protection laws, it becomes difficult for the first landlord to trace them.”

Mr Globe stresses that changes to legislation that he is proposing aren’t just in the best interests of landlords.

He added: “An overhaul of the industry would benefit everyone. Licensing and regulation would make it more difficult for rogue landlords to evict tenants who complain about shoddy service.”

Mark Duffy has worked around the residential lettings sector for many years.

He is an insurance broker by profession and runs West Derby-based Marx Insurance, which specialises in offering insurance to residential landlords.

His experience of the sector has also led him to set up a lettings business.

He is unsure about a register for landlords, but firmly supports the idea of lettings agencies being licensed and registered.

He said: “I remember the days before insurance brokers were regulated by the Financial Services Authority (FSA).

“In those days, you would find lots of dodgy, back-street brokerages. They are all gone now and the whole industry is a lot more professional that it used to be.

“We have set up a reputable lettings agency using the years of experience I have in the sector. But the truth is I was able to do that without any sort of regulation or formal qualifications or training.

“At the moment, when a property owner goes to a lettings agency, he or she has no way of knowing whether that agency is reputable.”

Julie West, owner of Bootle-based Zest Lets, agrees, saying a requirement for letting agents to undergo training and possess qualifications would greatly improve standards in the industry.

She said: “I started out with a big property firm and they wouldn’t even let you near the office until you’d had at least a week’s training.

“People with no qualifications or training are setting up letting agencies, which means landlords are putting themselves in the hands of people who often don’t have a clue.”

Ms West also runs a specialist property recruitment agency and scrutinises candidates very carefully before she sends them off to clients.

She added: “I could send someone to an agency who can suddenly find themselves managing 200 properties. They need to know what they are doing.

“A letting agent needs to be able to advise landlords about all the different pieces of legislation they need to comply with.

“We are very clear what we expect from a landlord. You have to have a gas safety certificate and an Energy Performance Certificate (EPC), and if you don’t have those things then we are not going to take you on.”

However, not everyone in the lettings sector is in favour of regulation. Phil Lawton is a director of one of Merseyside’s best-known estate agencies, Sutton Kersh.

He is heavily involved in the firm’s lettings division and believes that last thing the industry needs is more regulation.

“There is already lots of legislation in place,” he said.

“There are already strict regulations concerning things like gas safety or Energy Performance Certificates, and I don’t think it would help to put even more on top of that. I think it’s a good idea for agents to be members of professional bodies, but I don’t think a national database is required.

“There are unscrupulous agents and landlords out there, but I think they are very much in the minority.”

tony.mcdonough