Member Article

Property expert: Rent-to-rent rip-off requires regulation

Stronger rules are needed to protect tenants and landlords from get-rich-quick schemes which can see people innocently rent homes from people who don’t even own them – that’s the view of one property boss.

Some speculators are said to be raking in as much as £35,000 every month through so-called “multi-letting” schemes which can see them cramming as many people as possible into someone else’s property by converting living and dining rooms into bedrooms, and charging excessive rents.

Although the process is entirely legal, North East property boss Ajay Jagota of KIS Lettings believes more protection is needed to stop “good people becoming unintentional slum landlords and tenants being treated like cattle”.

Rent-to-rent landlords typically rent properties from other landlords before subletting them to tenants of their own, often by issuing them with lodger-like licenses rather than tenancy agreements.

As well as risk of cramped living conditions, renters are often left with very few legal rights -including having no power to stop their “landlords” entering their property at will and leaving them vulnerable to sudden eviction.

The actual owners of these properties, meanwhile, may be at risk of seeing their mortgages and landlord insurance invalidated and their reputations ruined, being prosecuted for unintentionally breaching housing regulations, and even unable to evict other people’s tenants from their properties.

Ajay Jagota of KIS Lettings –who manage homes for over 700 landlords from branches in North Shields, Sunderand, South Shields and Welwyn Garden City, said:

“For the past few months we’ve heard repeated calls for regulation of lettings agents and landlords – despite the fact this regulation usually exists already, albeit unenforced. Meanwhile multi-letting is almost entirely unregulated despite the fact it risks turning good people into unintentional slum landlords and tenants being treated like cattle.

“The practice is completely legal – but if you ask me that is beside the point. It makes tenants suffer and leaves landlords being hit with the blame and the cost of the dubious actions of the fast buck sharks who overcharge vulnerable tenants for cramped, substandard accommodation they don’t even have a legal right to be in.

“The risks for landlords are equally huge – they could be prosecuted by the council for not having a House in Multiple Occupation license they don’t believe they need, they could be left unintentionally uninsured for damage caused by over-crowding, they could even see their mortgages revoked and their properties lost.

“The most at risk landlords are the inexperienced or those who don’t live close to their properties – so one safeguard is to work with a reputable local agent. Nonetheless, unless we see more protection for landlords and tenants alike we could be looking at the next big scandal in rented homes.”

This was posted in Bdaily's Members' News section by Ajay Jagota .