More regulation? No, thanks! More enforcement, please!

Over the past year, many stories on landlords and buy-to-let property investors dealt with newly introduced regulation, aimed to help ‘good landlords’ and prevent so-called ‘rogue landlords’ from operating. Do we need more regulation? No, we don’t. What we need is proper enforcement of the existing regulations as opposed to more registration, regulation and landlord-related schemes.

The idea of finding and getting rid of ‘rogue landlords’ is a bit old hat: looking back over the past decade or so a few examples come to mind. In 2006, the Scottish Government introduced the Landlord Registration Scheme (LRS), making it mandatory for landlords to register their properties. Ongoing changes to Scotland’s Private Rented Housing Panel (PRHP) are another example.

Figures obtained by the Scottish Conservatives now show that over the past two years, only 11 rogue landlords were 'found out' under the LRS regulations. Since the scheme started, 200,000 landlords registered successfully, whilst 40 ‘rogues’ have been revealed. Hardly an impressive success rate. All of this comes at a cost of £11.2m to the registered landlords. Annual running fees for the scheme’s website alone are estimated to be around £300,000.

The Scottish Conservatives call the scheme “farcical” – and I have to admit I agree. There is simply no benefit in tight regulations when there is no provision for policing and enforcing the scheme. To a degree, this is where the new Tenancy Deposit Scheme comes into play.

In theory, only registered landlords can place their tenants’ deposits with one of the approved schemes. If the deposit hasn’t been placed by a landlord within a set timeframe, tenants have the right to take their landlord to court and may be awarded up to three times the value of their deposit. In theory, this should encourage landlords to register, or should it?

As with so many other bits of regulations in our industry, there is no system of policing the regulation. In fact, the system relies on the tenant to (a) know about the regulations and their existing rights and (b) take the initiative and do something about them. It’s unrealistic and not very fair on the tenant.

What do we need? We do need regulation, but just as much as that, we need the Scottish Government, local councils or an independent body to enforce the rules they make. Otherwise, all regulation is just a waste of money.