One Man’s Pursuit Against Government Property Reforms

There are plenty of keen intellects within the property industry but the sharpest of all has to be David Smith.

He is one of the UK’s most experienced property lawyers and holds down several roles including one as Policy Director at the Residential Landlords Association (RLA), another as a partner at legal firm Anthony Gold and also as an editorial board member at RICS.

The ins and outs of property law may not sound like the juiciest of subjects but in Smith’s hands it is, particularly if you’ve watched his appearances in Parliament during which he usually outshines fellow industry attendees at evidence gathering sessions.

Weak questions from inexperienced MPs are politely swept aside, complicated or technical debates boiled down efficiently and the often glaring inequalities of the rental market laid bare.

His day job is working at legal firm Anthony Gold which specialises in landlord and tenant property litigation working from county courts all the way to the Supreme Court, as well as property tribunals.

But it is his considerable efforts on behalf of the RLA that he is best known. Unlike the trade associations for developers and estate agents which are often hesitant to stick their necks out too far on contentious subjects, the RLA is a campaigning organisation that has taken the lead tackling several recent high-profile issues.

Most famously this has included winning a successful Judicial Review of the government’s Right to Rent policy earlier this year, although it’s also taken strong positions in the past on the worst aspects of the Housing Act 2004, the Unfair Terms in Consumer Contract Regulations, the Property Misdescriptions Act, Unfair Trading regulations and the estate agency fees ban due to go live in two weeks.

At a glance

  • David Smith is the public face of the Residential Landlords Association
  • He and the RLA have been spearheading several campaigns to temper the government’s politically-motivated assault on the private rental market.
  • Key areas Smith believes government policies are misconceived include short lets, eviction reform, build to rent and the fees ban.

One of the most recent challenges facing the rented sector has been the rapid rise of Airbnb, particularly in London, an issue that Smith believes has not been tackled adequately.

“For a long time now the government position on short lets has been completely misconceived and the current tax position almost encourages people to short let, because there’s more tax deductibility for short lets which seems a bit illogical,” he says.

“And yet ultimately Airbnb properties take normal supply out of the traditional lettings sector.”

Built to rent

On the other hand, the RLA is supportive of Build to Rent, surprisingly. Smith makes the point that any ‘reasonable’ increase in supply within the rental market should be applauded, and points out that none of the private rental markets in Europe have ever seen more than 50% of their capacity eaten up by this emerging sector .

“And if it did happen I don’t see that as a problem,” he says. “What’s more worrying is that the government has pinned so many of its hopes for housing provision on Build to Rent and given the sector tax breaks at the expense of smaller landlords, which is an entirely misguided approach.”

The current government’s ‘death by a thousand cuts’ approach to the small landlord community is beginning to erode their trust in politicians, typified by the recent announcement that Section 21 evictions were to be banned, leaving landlords to rely on a ‘modified’ Section 8 process.

Smith says he doesn’t believe the government is hell-bent on damaging the sector, but rather that it knows it can win political points at the expense of landlords because they will still vote conservative. “I think it’s a pretty naked political investment,” he says.

Fees ban

The other issue vexing landlords is the tenant fees ban, which is due to go live on June 1st for all new or renewed tenancies.

“I think it will wake up landlords to the fact that letting agents are not always on their side, and that they were always wrong to assume that,” he says.

“There is going to be a financial shakeout soon when letting agents either make their businesses more efficient – many are not – or recoup their lost income from landlords. But I just don’t think they will pay.

David Smith

“But the fees ban will add to the ongoing acceleration within the lettings market and it’s almost inevitable that there will be further closures as the government does irreparable damage to the private rental market.”

Smith also suggests that there is likely to be a reduction in the number of landlords as the various government policies begin to bite, and that this may return the rental market to where it was before the 1988 Housing Act – which ushered in the current model of tenancy.

Before then, says Smith, you had a relatively small number of not very good landlords offering not very good property. “We need to avoid that happening,” he says.

Landlord registration

The final item on Smith’s hit list is to prevent England introducing a country-wide system of landlord registration, as the Rent Smart Safe scheme has done in Wales, with patchy success.

It required landlords to register with the scheme and undergo training and pay a fee before they can rent out a property.

Smith says the government is considering a similar system for England but warns that if the same registration backlogs were to occur in England, then mayhem would ensue.

“In Wales many landlords have yet to have their registrations with the scheme completed and therefore many landlords are breaking the law by continuing to rent out their properties,” says Smith.

“If this happens in England, all you’ll end up doing is charging the good landlords who would have signed up anyway, and missing the bad ones because the enforcement would be weak.”

The RLA’s hard lobbying of government is bearing some fruit. This week housing minister Heather Wheeler confirmed that she would find a way to reassure landlords that the eviction process will remain balanced and accessible for both tenants and landlords alike. Sticking your neck out does work, it would seem.

You might also like