HCLG report on the private rented sector, published April 2018
While the good news is that the vast majority of tenants are satisfied with their homes, around 800,000 properties still have at least one Category One hazard - such as mould or faulty wiring - and 200,000 tenants said they had been abused or harassed by their landlord.
Although conditions have improved dramatically for tenants in recent years, more work clearly needs to be done at the lower end of the market, which houses the most vulnerable tenants.
In its report on the private rented sector, published on 17th April, the Housing, Communities and Local Government (HCLG) committee made several proposals for improving standards and cracking down on criminal landlords. The report focused on five key areas for improvement:
1. A review of all PRS legislation
The committee believes the legislation giving local authorities their powers to intervene in the sector is too complex and outdated. In particular, the Housing Health and Safety Rating System (HHSRS) should be replaced with a more straightforward set of quality standards. It recommends that the Law Commission should review all PRS legislation to make it clearer for landlords, tenants and local authorities.
2. Greater legal protection for the most vulnerable tenants
Even though retaliatory evictions have been illegal since the Deregulation Act came into force in October 2015, 44% of tenants are still worried that if they complain about conditions, repairs and maintenance, their landlord might force them out of their home. The committee believes a specialist housing court is needed to give tenants a more accessible route to hold their landlords to account.
3. More severe penalties for criminal landlords
The committee found that even the threat of a civil penalty of up to £30,000 and a ban from letting property was not enough to deter the worst criminal landlords - many of whom have a business model that relies on exploiting the most vulnerable renters. The proposal is that councils should be given the powers to levy even more substantial fines and, in the most serious cases, confiscate properties from landlords.
4. Greater support for local authorities
While local authorities already have considerable powers to protect tenants by penalising and prosecuting criminal landlords, the committee reported that enforcement action has been too low and inconsistent, with 60% of councils failing to prosecute a single landlord in 2016.
Given that the main reason for this appears to be insufficient resources, the report recommends the government establishes a new fund to support enforcement efforts. This would undoubtedly make a difference, as many local authorities said that the cost of investigating and prosecuting criminal landlords was rarely recovered through the courts.
It's also suggested that there should be an online facility where local councils can publish their enforcement strategies and share best practice, as well as a national 'benchmarking scheme' to support them in taking action.
5. A review of selective licensing schemes
There is mixed evidence on the value of selective licensing schemes introduced at a local authority level. The basic principle is good: that these decisions are made based on an understanding of local needs and councillors are directly accountable to the local electorate. However, the process of applying to the Secretary of State for approval is deemed to be too slow, lacking in transparency and too expensive, so needs to be reviewed.
How could all these changes benefit you?
A more legally transparent industry
The simplification and streamlining of property industry legislation, particularly in the PRS, will make it easier for landlords to understand and comply with their obligations. It will give buyers, sellers and tenants reassurance about what they're agreeing to when they take up professional services and sign contracts.
More and better enforcement action against rogues
The setting of firm operating standards and codes of conduct for all agents, together with clear penalties for non-compliance and extra support for enforcement, should finally put most of the remaining rogues out of business. With new measures to help local authorities take action against criminal landlords, the most vulnerable tenants should no longer have to worry about being exploited and trapped in unsafe homes.
Kate Faulkner is one of the leading, independent property experts in the UK and regularly features in major newspapers; on BBC, ITV and regularly co-hosts the Property Show on LBC. You can learn more about Direct Line for Business Landlord insurance here.
You can learn more about Direct Line for Business Landlord insurance here.