Written By Em

A London Assembly Member is calling for short let sites, such as Airbnb, to be forced to register with local authorities and share data on the length of stays.

Labour Assembly Member Tom Copley is pushing for tougher regulations on short let sites.

The Government introduced a new law in 2015 that limited short-term lets of whole residential properties in London to a maximum of 90 days per calendar year. This is voluntarily enforced by Airbnb, but Copley warns that other short let sites need to follow suit.

He also says that it would be easier if there were a technology platform where these websites could submit the length of stays to a local authority, so that they could be monitored.

Government Urged to Introduce Regulations for Short Let Sites

He explains: “Airbnb’s decision last year to voluntarily enforce the 90-day limit on short-term lets was a very welcome step forward, but they’re no longer the only player in the market. It’s vital that they and other short-term rental platforms continue to engage with local communities and city authorities.

“They should be looking to work with national and local Government to help lay the right regulatory framework to protect long-term housing and build cohesive communities.”

He continues: “Let’s sort out information sharing immediately – for everyone’s peace of mind. Cash-strapped local authorities are struggling to enforce against people who turn their homes into hotels by the back door.

“We need home-sharing platforms to share data with councils to help them target the minority of hosts who abuse the system. Government should also legislate to require that short-term lettings hosts register with their local authority. This should be simple and free.”

Copley believes: “None of this is rocket science – it’s simply catching up with and effectively regulating new technology.

“I’m horrified that breaches of security, especially around door codes, are accompanied by anecdotes of extreme problems for neighbours, including confrontations with guests and properties being used for parties or even brothels. Given these impacts on neighbours, it is unsurprising London’s most affected local authorities are so concerned about the issues raised by short-term lets.”

He adds: “Let’s give them the tools they need to clamp down on abuses of the system.”

Fran Milsom, the Co-Founder of Air Agents, which lists and manages Airbnb rentals, responds to the calls: “We support Tom Copley’s announcement calling for greater regulation and transparency in the short-term lettings sector. The sharing economy is on the rise and is here to stay. It doesn’t come without its difficulties, but there are so many benefits both for the individual and the local community. There are many lessons we can learn around licencing and registration, and we can look to other cities to understand best practice.

“We were founding members of the UK Short Term Accommodation Association (STAA), a membership body that is dedicated to creating sustainable pathways and influencing legislation. We are working with local authorities and the Mayor of London’s office to help regulate the market. Most authorities have signed up to a 90-day rule, and this is something we support, but more needs to be done to prevent anti-social behaviour or misuse of property. Karen Buck MP is currently putting pressure on the Government to act, and we look forward to starting a collaborative constructive dialogue on this to support users and the industry.”

Mark Lawrinson, the Regional Manager of Portico, which operates an Airbnb host service, also backs the proposals: “As an estate agent offering management services on Airbnb in London, we support the enforcement of the 90 days and ensure that our clients only use the service for 90 days.”

The Residential Landlords Association (RLA) is supporting a legal challenge of the Government’s controversial Right to Rent scheme.

Under the immigration policy, landlords are legally responsible for checking the immigration status of all prospective tenants, with the prospect of prosecution if they know or have “reasonable cause to believe” that the property they are letting is occupied by someone who does not have the right to rent in the UK.

The RLA is supporting a judicial review of the policy being sought by the Joint Council for the Welfare of Immigrants (JCWI), which argues that the policy discriminates against foreign nationals. The RLA is also supporting a similar legal challenge by the Camden Community Law Centre.

The fear of criminal sanctions has made many landlords reluctant to let to non-UK nationals out of concern that they will be duped by forged documents. Research by the JCWI found that the scheme has made 51% of landlords less likely to consider letting to foreign nationals. This is backed up by similar research by the RLA, which it will be using to support the legal challenge.

Despite requests for it, the Home Office has refused to publish a database of what all acceptable forms of identification for the scheme look like, arguing that there are simply too many from countries around the world.

A recent BBC investigation found that criminal gangs are helping undocumented immigrants flout the law by selling them fake identity documents.

The same JCWI research shows that 48% of landlords were less likely to let to someone without a British passport as a result of the scheme, due to the threat of criminal sanctions. This poses serious difficulties for the 17% of UK residents that do not have a passport.

Although in October the Chief Inspector of Borders and Immigration announced a new review of the Right to Rent scheme, it warned that this “will not examine any unintended consequences of Right to Rent, for example, discrimination against would-be tenants, increased homelessness, or displacement”. This is because, it said, it “does not have the capacity to conduct a meaningful examination of the unintended consequences of Right to Rent at this time”.

David Smith, the Policy Director of the RLA, says: “When this policy was first discussed, we warned the Government of the unintended consequences of the Right to Rent scheme. How can a landlord be expected to know what every passport in every country is supposed to look like?

“For the overwhelming majority of landlords, it makes no commercial sense to limit their access to a large proportion of the prospective tenant market. It is the fear of criminal sanctions for getting it wrong which is causing many simply to want to play it safe.”

He insists: “Landlords should not be used as scapegoats for the failures of the border agencies. It is time to suspend this controversial and unwelcome policy.”

This week’s introduction of stricter regulation of Scottish letting agents could be a sign of things to come in England, warns automated rental payment provider PayProp.

Following on from the introduction of the Private Residential Tenancy in December, letting agents operating in Scotland will now be required to join a Register of Letting Agents, which will be maintained by Scottish Government ministers.

In order to qualify for the register, agents will need to comply with a new Code of Practice and meet minimum training requirements.

Code of Practice

As of 31^st January 2018, Scottish letting agents are required to comply with a comprehensive industry Code of Practice.

Agents must have written policies on a number of topics, including their fees, terms of business, complaints, rent collection and end of tenancies.

On top of this, they are required to have written processes for identity checks, referencing, tenancy agreements, property management and more.

Other stipulations include: professional indemnity insurance, Client Money Protection (CMP) and a separate client funds account.

Neil Cobbold, the COO of PayProp in the UK, says: “The majority of agents will already have these processes and policies in place, but the new system requires them to have everything fully in order and in writing.

“A Code of Practice ensures every agent is adhering to the same standards, and the sheer depth of requirements should discourage any rogue or criminal agents from starting a new business.”

Could Regulation of Scottish Letting Agents Happen in England?

Minimum training requirements 

Before joining the Register of Letting Agents, firms will also need to make sure that all of the relevant people in their businesses have appropriate training.

Every person directly concerned with managing and supervising day-to-day letting agency work will require training, unless they already have a relevant qualification.

Those registering may also be required to pass a fit and proper persons tests to determine whether they are eligible to carry out letting agency work.

“The provision of additional training where required can be seen as a positive change for the rental sector in Scotland,” suggests Cobbold.

“No matter how experienced, if agents brush up on what is expected of them, this can contribute towards improving the overall customer service experience of tenants and landlords.”

Enforcement 

Once agents have complied with the Code of Practice and met minimum training requirements, they will be eligible for the inclusion on the Register of Letting Agents.

All letting agents must join the register by September 2018. Those that are not on the register and carry out agency work after this date could be fined up to £50,000 and handed a custodial sentence.

“The severity of the punishments for non-compliance shows that the introduction of the register is being taken seriously,” believes Cobbold.

“However, it’s the enforcement of membership before the stated deadline which could determine its success. If membership of the register is low come September, it could lose credibility and potentially undermine the wider regulation framework being introduced.”

England

As has happened before, the new system in Scotland could be a precursor to similar regulations being introduced in England.

The most significant example is a ban on letting agent fees, which was introduced in Scotland in 2012 and set to be introduced in England after spring 2019.

“If this new system is successful in Scotland, there’s no reason why similar rules can’t be introduced in other parts of the UK,” says Cobbold.

“It’s unlikely these changes will trickle down for a while yet, but it’ll still be beneficial for agents in England to monitor their progress.”

Cobbold also points out that the new Scottish system is similar to a number of proposals put forward by Sajid Javid at the Conservative Party conference in October last year. These included agents complying with minimum training requirements and an industry code of conduct.

“It’s clear the English Government is also looking to regulate letting agents more closely, and it’s surprising that there’s been no further mention of these specific proposals since they were put forward several months ago,” he concludes.