According to Richard Berridge, Founder of Blackbird Real Estate, the introduction of the Renters (Reform) Bill is futile. Without the right utilisation, the bill has neglected Build to Rent and the PRS. Richard believes that the UK should follow suit of the Irish, and bring a national tenancy register to life to help bring about effective action.
By Richard Berridge, Blackbird RE Advisory
The government appears incapable of introducing policy in a beneficially benign sense. What I mean by that is rather than looking to improve a lot of the country as a whole, they look to appease and appeal. Often to vociferous minority interest groups: the cancelling of housing targets is a recent example of that in a move to quash a revolt by the BANANA section of the Tory party. One might say ‘that’s politics’. Equally, one might say ‘politics is an ass’.
It is the same with the Renters (Reform) Bill; landlords painted in the ugliest light with reforms to the PRS framed around that narrative. Therefore, the opportunity to really reform the PRS to the benefit of all parties was never going to happen.
I won’t pick apart the merits, or otherwise, of doing away with Section 21, strengthening Section 8, or the move to periodic tenancies and other measures because it’s been well rehearsed by the sector.
What I am interested in is the creation of a Landlord Register that the Renters (Reform) Bill introduces. I’m interested because it’s a huge, missed opportunity, and it’s a missed opportunity because government has framed the proposed legislation as anti-landlord. Because of that, they fail to see the bigger picture that the Irish government seems to see much more clearly with the introduction of the Residential Tenancies (Amendment) Act 2019.
Contained within Ireland’s legislation is the mandatory registration of every private tenancy with the Residential Tenancies Board (RTB) from 4 April 2022. What the Irish have understood is that to know what is really going on in the PRS, one must have the data. So, whilst the UK government look to appease pressure groups with a Landlord Register – which is frankly useless in a dynamic sense – the Irish government decided they wanted to know everything.
What does ‘everything’ look like? The required details to register a tenancy with the RTB are as follows:
- Rented Dwelling Address (The UK could include the UPRN).
- Dwelling Type (i.e. Whole of House/Apartment/Flat Bedrooms).
- Bed spaces and Number of Occupants.
- Approximate Floor Area in Square Metres.
- BER Cert Rating (if applicable) (equivalent to an EPC).
- Local Authority in which rented dwelling is located.
- Tenancy Commencement Date.
- Landlord name/address/ppsn (PPSN equivalent to National Insurance in the UK).
- Tenant Name/ppsn.
- Authorised Agent (if applicable) Name/Address/CRO number/ppsn.
- Management Company (if applicable) Name/Address/CRO number.
This data must be updated yearly or with a change in the tenancy, and it is uploaded to a portal managed by the RTB.
It doesn’t take a genius to realise how important this data is to the sector, and how it could potentially inform rental housing policy for the better. Not only does it do the RRB’s intended job of registering landlords details, it captures essential data about who is renting, how many people, their age, the rent paid, the date of commencement, the type of home, how many bedrooms and the size. From a Build to Rent/single family housing (SFH) perspective, this is the sort of accurate, real-time data that investors and valuers are screaming out for when evaluating an opportunity.
Such a register would also level the Build to Rent playing field. It removes the thorny subject of IP, secretive behaviour or commercially sensitive data, and lays bare the performance of each building. It could also go some way towards creating a dynamic pricing model.
Of course, Ireland’s tenancy data is not as open as one would hope. Currently, the government keeps most of the data to itself. But, if tenant anonymity is preserved, there’s no reason why online live data couldn’t be possible.
Having previously worked in the Proptech sector I can tell you that creating and managing a tenancy portal is towards the lower end of difficulty, and developing API’s to work with property management software is straightforward. This applies equally to letting agents and Build to Rent operational managers.
So, if it’s that easy, and so beneficial, why doesn’t the UK government follow the lead of the Irish? It’s a good question. Perhaps governments rather dismal record with anything to do with technology has something to do with it. Perhaps it’s a reluctance to do anything akin to that an EU country does. But unfortunately, I think it’s more to do with their somewhat blinkered view and a landlord hard-line approach.
18 months ago, I wrote to Michael Gove and sent a short paper on the benefits of a tenancy register such as the Irish have implemented. I also wrote to the Labour Party and the Liberal Democrats. Gove’s team responded eventually, but without addressing any of the points I made. The other two failed to respond.
Obviously, there’s going to be a cost to all this, but landlords are going to have to pay to register under the current RRB proposals anyway. Currently the annual cost of registering a tenancy in Ireland is €40. To give that some context, it would equate to 0.15% of the average annual rent in London, and 0.24% of the UK annual average. Not exactly onerous.
Landlords with more than one property can take advantage of a ‘composite Registration Fee’ up to a maximum of ten properties of €170. Late fees are charged at €10 per month. Landlords who don’t register face a criminal conviction and a fine of up to €4,000.
I think we can all agree that there is a lack of clarity in PRS data. From an investment point of view, it’s not helpful nor consistent with Build to Rent which is more CRE than residential in its requirement for solid, real-time, unimpeachable evidence. There is still time for this government to amend its proposals. We need to make the proposed portal much more useful and relevant, as the Irish have done.
Will they listen? I doubt it. They haven’t so far. But let’s hope that, in time, someone in government gets it and we in Build to Rent, and those in the wider PRS, get the data we all need to generate investment and improve the sector.