Asian investors unlikely to join London's landlord accreditation scheme

PUBLISHED : Wednesday, 14 August, 2013, 12:00am
UPDATED : Wednesday, 14 August, 2013, 4:08am

In a bid to clean up London's private rental sector, the city's mayor, Boris Johnson, has launched a voluntary accreditation scheme for landlords and letting agents.

But few Hong Kong investors will join the scheme, the agents say.

Scandals, such as unscrupulous landlords renting out garden sheds to illegal immigrants, and letting agents defrauding tenants of their deposit money, have prompted Johnson to launch the London Rental Standard, the first comprehensive set of benchmarks for the city's letting market.

The guidelines include setting minimum response times for landlords to make property repairs, and full disclosure of letting agents' fees.

Landlords who join the scheme can use a kite logo in marketing materials to show they are accredited, which will make their property more appealing to tenants, Johnson believes. He hopes to have 100,000 landlords accredited by 2016.

Marc von Grundherr, director at Benham & Reeves Residential Lettings, said the mayor's scheme would not raise standards because it was voluntary, which meant rogue landlords would continue to operate as they do now and not join.

Landlords must take part in a one-day training session in London at a cost of £70 (HK$840) to become accredited.

Grundherr said 40 per cent of his Hong Kong clients had not even seen the property they own in London and none would have budgeted for a trip to London for training.

"It is not going to work," he said. "To be a landlord based in the Far East you are not going to fly over here to do a course on how to be a landlord."

About one-third of London private rental stock is owned by Singaporeans, Malaysians, and other foreigners, who may decide travelling to London for training is not worthwhile.

Jane Ingram, residential lettings director at Savills, said a Hong Kong landlord would appear reputable by hiring an accredited letting agent to let and manage their property, so joining the scheme themselves was not necessary.