It’s no secret: lettings is hard and becoming harder. The game has changed. It’s not about winning an instruction from “X down the road”, there’s a collective game in play with all professional property management companies on the same side – co-opetition, if you will. How do we, the people who do things the right way, show the value of a professionally managed rental when landlords, under increasing financial strain, may be considering self-service as their way forward?
With that in mind, a draft piece of legislation that is only now garnering the headlines that it deserves may have achieved the unthinkable: putting letting agents, tenants’ groups like Shelter and politicians on the same side of a debate.
The Homes (Fitness For Human Habitation) Bill, introduced by Karen Buck MP, has the support of Government. Even in these politically uncertain times a Labour-originated Bill with Governmental support stands a fairly strong chance of being enshrined in legislation.
The Bill itself is relatively straightforward and clears up a quirk under which only landlords of properties at extremely low rent (annual rents of £52 outside of London; £80 inside London) are obliged to keep the property they rent in a state which is fit for human habitation. It’s odd to think that a person, renting a property to live in, wouldn’t have a contractual right to sue their landlord if the property they rented wasn’t fit for a person to live in.
While the Bill itself is straightforward, there are three words that don’t seem to have garnered much attention: “during the term”. Maybe your legal geekery doesn’t extend as far as it does in Fixflo Towers but, for us, that’s a sea-change in how properties have to be managed in addition to making self-management by landlords significantly harder.
The unfair advantage of a letting agent who manages properties on behalf of a pool of landlords over an individual landlord with a handful of properties is that they have the benefits of economies of scale that makes investment in people, systems and processes cost-effective. That extends to the ability to offer a genuine out-of-hours service for when the worst happens (like a water leak).
Running through that example:
A tenant in a self-managed property has a leak. They call their landlord but can’t get through as it’s 3am. The tenant is presented with a choice of “managing” the leak (possibly by turning the water off at the stopcock, assuming they know how to do that) or calling an emergency plumber. How many tenants do you know who would think and be happy to call an emergency plumber, pay the call out and trust that the money would be refunded to them promptly? Let’s assume that the water is stopped; the property is then unfit for human habitation, the tenant could sue their landlord and the pain of self-management (for both landlord and tenant) is in full flight.
If the property was managed by a professional property manager it would be straightforward. The tenant would know how to report their problem around the clock (assuming they rent through a Fixflo customer, they would be guided in turning off water at the stopcock), have access to vetted and insured emergency contractors that were approved by their letting agency and the problem would be fixed. Simple, quick and easy, without a breakdown in the landlord/tenant relationship or the landlord being sued.
Over the next few months it will be interesting to see which agencies get hold of this message and use it to move their let-only landlords onto a fully-managed service.
This isn’t a zero-sum game. Hopefully agents operating in an area will combine forces to educate local landlords on the impending change in law. As the Iceland football fans showed during the World Cup recently, acting in unison amplifies the noise and on this issue that can only be good news for all participants in the market.