Are you an ethical landlord? | Vesta Property

Are you an ethical landlord?

September 28, 2018

The relationship between landlord and tenant has been a challenging one for as long as people have owned property. In fact, one of the principal grievances that incited the Peasants Revolt of 1381 – as some of you history buffs will know – was unreasonable rent increases, while today many people blame the private rented sector for exacerbating the current housing crisis.

Whilst we know that the vast majority of landlords in the UK do manage their tenants responsibly, there is a lot more that can and should be done. As the buy-to-let industry continues to grow, the importance of encouraging ethical practices within the industry is imperative to improving its image and ensuring its future success. The conversation around this topic requires a sensitive approach that considers the passionate opinions and financial interests of all parties involved – not just the tenants and landlords, as this is an issue that bleeds into economics, politics and local communities.  

At Vesta, we strive to bring greater transparency, accessibility and fairness to the buy-to-let industry, which has failed to address – some would say wilfully ignored – its problems for too long. In the first of this two part blog series, we will explore the various things you can do as a landlord to ensure that, while you are keeping on top of your financial investment, you are also doing right by your tenants. After all, maintaining a healthy relationship with your tenants makes perfect business sense – happy tenants respect your property and keep up their rent payments. What more could you or your tenants ask for?      


Without doubt, the single most important aspect of being an ethical landlord is communication. Whilst this point may border on the obvious, it’s a well-beaten drum that unfortunately hasn’t been heard by all. The important point to understand here is that things will start to go downhill or problems will be made much worse when there is a breakdown in communication between you and your tenants. Whether it’s a broken bed, a leaking lavatory or a nasty neighbour, things can and often do go wrong. It’s imperative that your tenants know exactly who to call when there’s a problem and that they receive a timely response.

Even if you are unable to resolve the issue immediately, reassuring your tenants and keeping them in the loop will demonstrate that you have listened to their concerns and are taking the appropriate course of action. Being able to communicate comfortably with your tenants will be critical to the success of your tenancy, impacting everything from damage liability to rent negotiations.

Proactive maintenance

During any tenancy the most common topic of conversation between landlord and tenant will be the maintenance of the property. Once rent has been agreed, inventories have been signed off and the tenancy agreement is underway, it is the unpredictability of a residential property that you will need to account for.

When (note – not ‘if’) there is a problem with your property it will not be you but your tenants who have to live with it until it is resolved. A blocked gutter may not seem like a pressing concern in the balmy summer months but come the winter rains and you may find that the weight of water has cracked your roof, saturated your loft insulation and exposed your tenants to toxic black mold.

This may sound like the stuff of nightmares but it is a reality for far too many tenants who have paid the price for their landlord’s irresponsibility. Failures to properly maintain your property, especially when informed by your tenants, doesn’t only result in disgruntled tenants who are likely to withhold rent, but you could also face compensation, fines or even jail time – where unblocking a gutter will be but a pipe dream.  

If you feel that you are unable to provide the appropriate level of help to your tenants or maybe you are too busy to respond in a timely manner, it’s a great idea to employ the services of a local maintenance contractor. They will be able to respond to maintenance problems on your behalf and many of them will already have a network of local tradespeople to cover most household eventualities.       

Fairness with finance

Investing in a buy-to-let property is exactly that – an investment. Whether you are looking to build a property investment portfolio or just supplementing your retirement, the primary motive behind buying rental properties is to make a profit. Fortunately for landlords, the property market today is such that demand for rental properties exceeds supply by a significant margin. Therefore as a landlord, the balance of power when it comes to negotiating rent rates is weighed heavily in your favour.

With this in mind, you have to decide how much rent you will charge for your property. If you go too high, you may struggle to find willing tenants; if you go too low, you may not be getting a great return on your investment. Taking the time to research local rental prices is an effective way to gauge the average market rental value of your property. Rent rates are always going to be a difficult issue between landlords and tenants but as long as you settle on a figure that keeps you in the black and doesn’t exploit your tenants, everyone’s a winner.

Likewise, the decision to increase the rent on your property can be a tricky subject to discuss with your tenants, even more so if they have been renting your property for a while. Sometimes, it’s unavoidable. If they decide that the proposed rent increase is unaffordable they may have no choice but to part ways with you to find a cheaper property. This is not ideal for you, as you will now have the headache of spending time and money looking for new tenants, and it’s far from ideal for your former tenants who will have to find an alternative place to live. As a rule of thumb, you should not need to increase rents by more than the rate of inflation. This covers any increasing maintenance costs while also being fair and justifiable to your tenants.    

Openness to tenants

A prevalent but rarely discussed issue within the buy-to-let property industry is the apprehension around letting to tenants receiving housing benefit. The constant and often cruel stigmatisation in the media coupled with long-standing prejudices within the property industry itself has lead to a lack of interest in even considering benefit receivers as PRS tenants. This needs to change.

This position, although largely unfounded, has been allowed to prevail at the detriment of honest, rent-paying tenants.  In fact, a survey of 1,137 private landlords conducted in 2017 by housing charity Shelter found that 43% had an explicit ban on letting their properties to housing benefit claimants. This may seem shocking to anyone new to the private renting market but it has been an attitude that has gone unchallenged in the industry for far too long.

While it is true that certain mortgage providers force “no DSS” clauses on some landlords, and recent changes to housing benefit and Universal Credit have complicated the issue, there is no real reason to think that benefit claimants will be unreliable tenants. In fact, the opposite is more likely true. Their income is regular, they are less likely to move and they have a greater investment in maintaining the upkeep of your property, as their options are more limited should anything go wrong.

One pioneering scheme to combat these restrictions as well as tackle increasing homelessness is the Rent Guarantee Service (RGS) implemented by Oxford council. This scheme benefits both tenants and landlords as tenants learn to become more financially independent while landlords are guaranteed rent payments as the council acts as the rent-collecting agency. Far from being cat and dog, this is one of those beautiful examples of what can be achieved when the public and private sector come together and everybody benefits.

We at Vesta are proud to support schemes such as the RGS and are working each day to make the buy-to-let industry a fairer and more accessible industry for all –  tenants and landlords alike. In fact, we are actively working with Oxford Council to incorporate more of their social housing landlords into our tenanted property marketplace. This creates a “triple win” situation – no stress of moving for tenants, no long and rent-less sales period for sellers and no delay in receiving income for the new owners.

For further information about ethical landlord practices or for more details on investing in buy-to-let properties with tenants included, please get in touch with our friendly and knowledgeable team.

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