Government 'could do better' on housing policy

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David Salusbury, chairman of the National Landlords Association, discusses housing policy and the Welfare Reform Bill.

How is the National Landlords Association involved in housing in the UK?

The National Landlords Association (NLA) represents around 20,000 private-rented sector landlords in the UK – putting our landlords at the heart of a sector which is providing homes for over 3.4 million households.

The private-rented sector has come a long way at a phenomenal rate and has grown by over one-and-a-half million households in the last decade alone.

The NLA's role is threefold: we work to raise standards in the private-rented sector by providing development, benefits and services to landlords; we promote and raise the profile of landlords to ensure the public and policymakers can better understand the private rented sector, and we provide support to the large number of 'accidental' landlords who let property but do not actually see themselves as landlords.

People often talk about there being a 'housing crisis'; what role does the National Landlords Association believe the private rented sector has in dealing with this crisis?

I would say that there is a 'quiet' housing crisis going on in the UK. On one hand, we have a growing number of people unable to get on the housing ladder and, on the other, we have a social housing sector neither built nor equipped to house the majority.

As a country we have been ignoring the realities of housing need for too long. I saw recent statistics indicating that young people will have to wait until their late-30s or even their 50s before being able to get on the housing ladder.

With the private-rented sector the only one able to meet a growing need for affordable housing, it is unsurprising that over 70 per cent of new households are finding their homes from private landlords rather than anywhere else. That trend is going to grow and the debate should really be about how we prepare for that future.

The two biggest challenges I think we face are: how do we ensure new renters are armed with the right knowledge and expectations to get the best possible experience from renting, and how do we make sure that landlords are able to provide the homes the country needs. By doing the first we empower renters as consumers; the second ensures better choice and guarantees supply when people do choose to rent.

Can you give us a picture of a typical landlord or NLA member?

Are you asking me whether I could spot a landlord in a large crowd? Probably not. There are around 1.2 million landlords in the UK so the reality is that they come in all shapes and sizes. Whilst the public probably have a particular picture in mind when they think 'landlord', the modern private-rented sector involves people from all walks of life investing in housing for other people.

For example, there are around 102 MPs and 92 Lords who are actually landlords in that they receive rental income from a residential property. Even if they use a managing agent and are not involved in the day-to-day tasks of being a landlord, they make an incredible contribution by providing homes for other people. The real problem is, how many of them would be willing to stand up and recognise that they are, in fact, landlords?

From the perspective of our membership, that is a key difference. NLA landlords are willing to stand up and call themselves a landlord, which means they also realise the responsibilities that go with that role. Our members are interested in how the industry is developing, what the current issues are for the sector and how they can deliver the most professional service possible for their tenants. The calls to our advice line and our policy team show that.

Does housing policy adequately take into consideration the role of rental accommodation?

I think it is a case of 'could do better'. Housing policy does need to catch up with the fact that people are choosing to rent. There are challenges that the sector faces which are both diverse and important. However, it does point to a need to remove the perception that the private-rented sector is only for one group of people. For instance, over a quarter of all renters in the private-rented sector are over 45 and so the sector is increasingly becoming an option for older people too.

Too often policymakers think private-rented sector and become blinkered to anything other than introducing more regulation. I think that the positive approach from ministers like Grant Shapps and Eric Pickles, emphasising that they do not want to increase regulatory burdens, has prompted everyone to think more creatively about how we work together to achieve a continually improving sector. That said, politicians seem to see landlords as a soft touch when it comes to political rhetoric. You'll have one minister praising the private-rented sector for providing many more homes than any other sector, then the next day you'll have a minister from a different department accusing landlords of 'milking the system'.

We need housing policymakers to get used to landlords and the private-rented sector being partners when it comes to housing, which means looking at how to encourage the best of the sector as well as how to deal with the rogues.

What are the National Landlords Association's views on the Welfare Reform Bill?

This is a big issue for us. Housing benefit is a continual worry for landlords and tenants alike. It is a significant part of the sector, with a likely 1.4 million households receiving housing support in the private-rented sector by 2013. So the massive and radical changes that this bill makes to housing benefit, and welfare in general, deserves careful scrutiny.

2011 and 2012 will be extremely difficult for those who need housing support. The government's programme of cuts and changes to Local Housing Allowance will start in April and we are worried that local authorities are not ready to deal with the impact of those changes.

The Welfare Reform Bill is therefore a difficult bill; some of the changes (the introduction of the Universal Credit, for instance) are genuinely positive steps but the implementation and detail of other aspects of the bill (for example, the overall benefits cap) risks putting housing at the end of the queue. The fundamental reality is that landlords cannot invest in housing if they and their lenders cannot be sure that they will get the rent.

What impact do you believe the Welfare Reform Bill will have on the rental sector – both tenants and landlords?

The impact will be different in different parts of the country because housing is different in different parts of the country. The vast majority of landlords letting to housing benefit tenants have already told us that, nationally, they cannot afford to cut their rents by the amount the government hopes they can.

What is clear is that decoupling housing support levels from the actual cost of providing the housing may not be beneficial in the long term. That is why we have concerns about up-rating Local Housing Allowance rates with CPI instead of market rents.

Finally, one of the things we are going to be pushing parliamentarians to look at more closely is the actual impact of different parts of the sector. The principles are ones that the public understand but we cannot be in a situation where the consequences end up costing the country more in temporary accommodation for homeless families, or landlords being unable to meet mortgage payments because of rent arrears.

What one message would the National Landlords Association seek to send to government in 2011?

We need the government to prioritise growing the private-rented sector, to increase professionalism and choice for tenants. We are ready to work with the government to ensure that is achieved.