For the past year and a bit Safer Renting have been working on a project counting the number of illegal evictions across the UK which has to be honest, been a massive uphill struggle, chiefly because few people are counting and those that do, arent counting in exactly the same way but we are getting there.
Dr Julie Rugg of York university is helping us out with the academic rigour side of things and pointed me at a very interesting book that I managed to purchase “The limits of the legal process – A study of landlords, law and crime” by Criminologist David Nelken, which is proving valuable in grasping the changing face of the criminal landlord/agent market.
Actually written in 1982 but examining the development of thinking around criminal landlord behaviour and the birth of early legislation on the subject with the Protection from Eviction Act 1964 and the Rent Act 1965.
That the activities of Peter Rachman came into public awareness forcing government to respond I already knew about. Rachmanism has become a by-word for thuggery but it appears that this wasn’t really the full picture. Rachman wasn’t actually that big on illegal eviction, in fact he would often simply pay people to leave, a practice known at the time as “Winkling”. His activities were more aimed at buying neglected properties towards the end of their lease and renting them at low cost, without doing repairs, then winkling the tenants out, doing the flats up to rent at higher rents.
At that time people renting furnished property had less security of tenure than people occupying unfurnished properties and this was an important element to understand. We don’t have such distinctions these days.
Whilst Police and HMRC were interested in his broader activities, in the majority of instances Rachman was just playing the system as opposed to breaking the law, until he died suddenly in 1962. MP Frank Parkin commenting that Rachman’s main game was “An easy adoption of the framework of existing company law and tax law to his own ends”.
60 years ago there was still the same split between conservative and Labour thinking we see today. The conservative government preferring light touch regulation of renting to encourage investors and developers, whilst Labour thinking centred around protection of tenants rights and rent control as the main driver but what I found most interesting is the profile of landlords of the early 1960s against what we see today. In so many ways it’s a 180 degree flip.
For instance, the British public were yet to discover Benidorm. Holidays were taken at UK seaside resorts where huge B&Bs proliferated that were empty during the winter months. Landlords needed to rent them out of season but didn’t want to grant security of tenure that would eat into their summer profits, so there was a strong lobby for the creation of holiday and winter lets without security of tenure, under the wonderfully named “Seaside landladies charter”.
But it’s in examining the government discussions on creating the criminal offences of harassment and illegal eviction of the time that we see most where the significant changes have taken place between black and white Pathe newsreel Britain and today.
Resident landlords with lodgers were by far the biggest group and it was thought at that time that these offences were largely being carried out in those lettings, because of the personal proximity of the protagonists leading to arguments and friction, whereas, what government referred to as “Business landlords” were far less likely to resort to harassment and illegal eviction.
And there dear reader is the crux of the change.
Safer Renting spends 24/7 dealing with harassment and illegal eviction. It’s what we were created for. Only a small percentage of problems we deal with are with lodger arrangements and in any event, lodgers don’t have the same level of security they had before the Housing Act 1988, when they were still entitled to be evicted by court order.
By far the biggest group of offenders in the present day are the business landlords, people with large portfolios and the past 10 years have seen a canny spin-off model in the growth of the property management company, who reap huge rewards without even owning any assets, who can hide behind limited company status, only to disappear in a puff of smoke when brought to book.
A renter can apply for Rent Repayment Orders for harassment and illegal eviction these days and they can claim civil damages for breach of covenant for quiet enjoyment but if the offender is a limited company with no assets what is the point? They simply dissolve the company and any financial penalty gets wound up with the business.
The landscape of renting is a completely different animal to what it was 60 years ago. It is even different to what it was at the time of the sub-prime crash in 2008.
Writing in the 2000 report “Harassment and illegal eviction of private renters and park home residents” the authors note that “The impact of the buy to let market has yet to be assessed” but in 2020, the Buy Association estimated the buy to let market represented an income generation of £1.7 Trillion, an increase of £239 Billion since 2015, a staggering change from the earlier days of Rigsbys, seaside landladies and generally honourable business traders and the 2000 report.
Quite how much the explosion in property management companies is tied to the expansion of the buy to let market is impossible to ascertain. Many buy to let landlords will manage their own properties but not all. As with illegal evictions, I doubt anyone is counting.
The dubious property management company can also wreak havoc with property owners as well, by converting properties into overcrowded, unlicensed HMOs and not passing rent payments on.
When I worked as Lewisham’s TRO we spent a couple of years trying to deal with the activities on one such operator who would simply refuse to hand properties back to owners, hanging on until injunctive relief forced him to abandon the houses, which were often left in a terrible state of disrepair, even ripping out the radiators to sell on.
Follow the activities of property management specialist, the notorious Mr Rasool and his trail of devastation in Camden and you’ll get an impression of how the worst operators can run their businesses.
The growth of the property management company model is also core to the epidemic of rent to rent, that curious business practice that takes up so much of Safer Renting and council enforcement officer time, which is encouraged as a brilliant investment opportunity to double rental yield.
The internet is awash with training courses and weekend seminars held in hotels on how to make income from property without actually owning it.
Look at the rise of property Guardians over the past 7 or 8 years, becoming more legitimised with every court hearing. The recent case of Global 100 Guardians let the world know the extent of the profits involved where they payed NHS Property Services Ltd £600 per month to protect an ex nurses home but raked in profits from renting it out of £15,000 per month.
Clearly the real money these days is not so much in owning the property but managing it.
The conservative government have gifted local authorities and to a certain extent tenants, with comprehensive toolbox of legislation aimed at encouraging the weeding out of criminal behaviour but when it comes to these dubious property management companies, employing these new tools is like trying catch a fly with chopsticks.
By Ben Reeve Lewis
