New report from Urban.co.uk reveals a fundamental lack of knowledge from UK landlords – ‘Accidental landlords’ particularly, are putting themselves at risk.
A new report from online estate agent Urban.co.uk has found that half (50%) of UK landlords are not prepared for the Right to Rent legislation, set to come into force on 1 February 2016. A survey of 5,000 landlords found that 20% believed that they had until April 2017 to prepare for the changes, while 3% believed they had until 2018 to get ready.
The new legislation, already implemented in the West Midlands, will soon require all landlords and agents in England to check a tenant’s immigration status or ‘right to rent’ in the UK. A failure to prepare could leave landlords at serious financial risk, with potential fines of £3,000 if they do not comply. With less than four weeks to go, Urban.co.uk is calling on all landlords to get ready to avoid facing a hefty fine.
Report reveals gaps in landlord knowledge
These latest findings are revealed in Urban.co.uk’s Landlord Knowledge Survey Report. The report, which questioned private landlords on a number issues relating to the leasing market, was undertaken to understand where there were gaps in the knowledge of UK landlords, as a raft of new legislation is coming into play in 2016, adding to the growing list of responsibilities for landlords.
Other key findings include:
- Only 10% of landlords provide the correct information to tenants at the start of a lease
- The majority (90%) of landlords were unable to identify the characteristics of a House in Multiple Occupancy (HMO)
- 16% were putting themselves at serious financial risk by failing to provide a valid contact address on tenancy agreements; an action which could see contracts being deemed as null and void.
One reason to explain the lack of industry knowledge could be due to the rise in accidental landlords who rent property due to circumstance e.g. having inherited property. Rightmove’s consumer rental forecast in 2013 for instance found that 30% of UK landlords are now accidental landlords and this naturally means that many are inexperienced in the market place.
Adam Male, Co-Founder, Urban.co.uk comments on the findings: “There has been an influx of new legislation relating to the rental market made in recent years and we know that UK landlords are struggling to keep on top of these changes. Despite knowing many of the basics, many find it difficult to navigate the minefield of changing renting rights and wrongs and this is particularly so for accidental landlords.
“At Urban.co.uk, we have a duty of care to ensure all landlords know their responsibilities and that new changes and legislation are communicated clearly to protect both themselves and the tenants who rely on the private rental market. This report sets to find out where the gaps are and how we can look to provide help and support where it’s needed most.”
It’s not all bad
Despite a lack of understanding in some areas, reassuringly, the majority of landlords were abreast of most other rental fundamentals. For instance, 77% were aware of the need for an up-to-date Energy Performance Certificate (EPC) and 95% of landlords correctly identified their gas safety responsibilities. 76% also knew the need for a smoke alarm on every floor and 7% even put one in every room!
The Landlord Knowledge League Table – a map which ranks the most knowledgeable regions in the UK according to the survey results – found that the most knowledgeable landlords let property in Southampton, while those in Newcastle-under-Lyme were unaware of many key landlord responsibilities.
Male adds: “It’s great to hear that knowledge about things such as gas safety is a widely understood and implemented landlord legislation, however, there is still a long way to go in educating landlords about the varying aspects of renting.
“New regulations such as the Right to Rent have the potential to stop ‘back door’ lettings and create a better environment for all, however, this will only happen if the scheme is communicated to landlords properly. We as an organisation want to do our bit to ‘clean up the industry’ and help landlords protect themselves from significant financial risk.”