Profits grow in 'year of two halves'


New law could ban letting fees


Private sector landlords and letting agents could be forced to stop charging lettings fees as a result of a new law being discussed in Parliament. The Renters’ Rights Bill, sponsored by Liberal Democrat peer Baroness Grender, proposes to ban letting agents’ fees and publish a public list of criminal landlords. Following the passage of the Housing and


Planning Law, the new Bill recently started its legislative journey, having had its second House of Lords reading and moved to the committee stage, but its likelihood of success is uncertain. It may not achieve a majority in both houses and even if passed, it is possible ways will be found to work around it. The Bill would give tenants access to a


database of ‘rogue’ landlords and letting agents, as well as such landlords from banning from owning and letting houses in multiple occupation.


Removing fees


Campaign group Generation Rent is supporting the Renters’ Rights Bill, which Baroness Grender said was intended to improve the quality of accommodation for renters and remove upfront fees. “We think they’re prohibitive, they’re a rip-


off, they’re an upfront fee which is really hard, especially when tenants are moving,” she said, adding: “People who rent have to move much more often than people who buy.” Betsy Dillner, director of Generation Rent,


O


ne of the housing sector’s main repairs contractors has reported operating profits of £15.8 million, despite a “year


of two halves” in its social housing business. Mitie has released its preliminary annual


results for the 2015/16 financial year, showing a turnover of £2.2 billion and pre-tax profits of £96.8 million across the group. The company works for around 100


landlords and has increased both revenues and profits in its property management business. Revenues in this area were up 13% to £280.4 million, while operating profits rose £15.8 million, up 51.9% from the previous year. It said its profits in the second half of the year were hit as many social landlords deferred


“Mitie has released its preliminary annual results for the 2015/16 financial year, showing a turnover of £2.2 billion and pre-tax profits of £96.8 million across the group”


planned improvements to homes and instead were focused on statutory maintenance due to budget cuts. Results had also been affected by social landlords cutting back expenditure to accommodate the imposed 1% rent cut.


Deferred work


“Our social housing business experienced a year of two halves. In the first half, buoyed by contract awards and increased spending levels from existing clients, it recorded significant growth in both revenue and profits,” the results report said. “Over many years we have seen a marked


improvement in the second half as our clients look to deliver their budget commitments. However, this was not the case this year. Mitie said social landlords have been driven


to look at “different ways to look after their homes”, with some re-tendering and others “looking at new models”. It said it is being approached by clients to “take over contracts from other providers that are not meeting expectations”. The company is expanding its service offer


to social landlords, so it can provide an “integrated service” including call centres, energy services, investment planning and other services.


24 | HMM July 2016 | www.housingmmonline.co.uk


said that landlords who propose to put up rents are motivated by greed. “Landlords who are putting up rents are just excited that they can blame something other than their own greed. Pulling the plug on landlord incentives is an essential step towards a stronger economy and a healthier housing market.” A warning has come from Jeremy Leaf,


former chairman of RICS, who said that a total ban on fees would lead to rents rising as costs will still be passed on to tenants. “The fees have got to come out in the


wash somehow. You cannot expect someone to administer housing lettings for nothing. I'd like to see caps on fees or more transparency around them. Banning them altogether could mean the costs are passed on to tenants, who could end up paying even more than they do.” he said. Leaf also said that “rogue tenants” should


be named and shamed in a list to match the one for landlords. “The very worst excesses are pretty obvious rogue landlord territory - but there's also rogue tenant behaviour, such as being obstructive, or never being around for repairs. A landlord could quickly be tarnished by bad publicity from a dispute over one property – and then he can’t let out his other 20 flats.”


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