The MPs say tenants face increasing rents, a rising number of low-earners and families renting long-term, and the prevalence of Section 21 evictions leaving households at risk of homelessness; and when trying to enforce their right to a safe and secure home private “renters face an inaccessible, arduous and resource-intensive court process and the risk of retaliatory eviction.”
The committee goes on to claim that there is also evidence of unlawful discrimination in the sector, with 25 per cent of landlords unwilling to let to non-British passport holders and 52 per cent unwilling to let to tenants who receive Housing Benefit.
The MPs says the Department of Levelling Up, Housing and Communities has “only made piecemeal legislative changes in recent years, and in doing so has made the regulatory system even more overly complex and difficult to navigate for tenants, landlords and local authorities”; and is concerned that plans to address problems in the sector in a White Paper later in the year will be hampered by DLUHC’s poor understanding of the issues in the sector including overcrowding, harassment and evictions, and the actual effect of regulation.
Dame Meg Hillier MP, Chair of the Public Accounts Committee, says: “Unsafe conditions, overcrowding, harassment, discrimination and dodgy evictions are still a huge issue in the private rented sector.
“And yet the sector is a growing provider of homes and rents keep rising meaning that safe, suitable housing is too often out of reach for renters. Renters with a problem are faced with a complex and costly redress system which is not fit for purpose and many tenants give up at the first hurdle.
“We need to see a change in balance. We expect DLUHC to produce the promised White Paper in a timely and effective fashion, and start to turn around its record on addressing the desperate housing crisis in this country.”
Key recommendations of the report - in the MPs’ own words:
- It is too difficult for renters to realise their legal right to a safe and secure home. There are significant issues within the private rented sector, with some tenants exposed to serious illness, harassment or homelessness. An estimated 13% (589,000) of privately rented homes in England have at least one category 1 hazard - a serious threat to health and safety that landlords are legally obliged to address1. There is also evidence of discrimination with 25% of landlords unwilling to let to non-British passport holders and 52% unwilling to let to tenants who receive Housing Benefit 2. Many tenants feel unable to exercise their rights and raise complaints with local authorities due to fear of eviction. For those that do want to complain, their access to redress mechanisms is severely limited - the system is highly complex and requires significant time and resource to pursue court action. This will be particularly difficult for more vulnerable tenants who may lack awareness of their rights or how to enforce them. The Department is considering a mandatory redress scheme for landlords, but the way this is designed will determine how helpful it will be. For example, multiple redress schemes instead of a single ombudsman may create a market for landlords to choose from but be more confusing for renters.
Recommendation: ….the Department should write to the Committee to set out how it will use its planned reform programme to better support renters to understand what their rights are; and improve renters’ ability to exercise their rights by learning from complaints and redress mechanisms used in other consumer markets.
- Local authorities do not have the capacity and capability to ensure an appropriate level of protection for private renters. Compliance with legal minimum standards is inconsistent across England, and the proportion of privately rented properties with category 1 hazards ranges from 9% in London to 21% in Yorkshire and the Humber. As reiterated by many of the stakeholders we received evidence from, most local authorities do not have the capacity to protect tenants and ensure landlords comply with regulations which has created a postcode lottery for tenants. For example, very few local authorities can afford to have tenancy relations officers who provide valuable support to tenants experiencing illegal eviction or harassment. The National Residential Landlords Association told us that a lack of resources and capacity also constrains local authorities’ use of enforcement powers with some taking a very light-touch approach. Only 10 landlords and letting agents have been banned by local authorities since 2016, and some councils inspect as little as 0.1% of their privately rented properties. The Department does not know what basic level of resource is needed for local authorities to regulate their rental markets.
Recommendation: The Department should conduct a realistic assessment of the resources needed for local authorities to regulate effectively, with consideration given to the size, types and quality of private rented properties and the demographics of renters. The Department should write to us within the next six months with an update on the outcome of this assessment.
- The Department is not doing enough to support local authorities to regulate effectively. The dozens of legislative powers used by local authorities are complex and spread across multiple enforcement bodies, creating a fragmented and disempowered regulatory system. Local authorities say that they could regulate better with more support and sharing of good practice, but the Department is not sufficiently proactive at providing this. The Department does not have a good enough understanding of what regulatory approaches work at local level to help local authorities ensure that landlords comply with their obligations. The Department also does not know what challenges local authorities are facing, and lacks an early warning system to identify where local regulation is failing private renters. The Department could learn lessons from other areas of consumer protection (such as Trading Standards services), where a national team provides intelligence and support to local regulators.
Recommendation: The Department should take a more proactive approach to supporting local regulators and sharing good practice. To do so, it should learn from other consumer protection systems that provide central intelligence and support to local regulators.
- Local Authorities are constrained by the Department’s approach to licensing landlords. In 2010, the Department introduced legislation allowing local authorities to require licences from landlords for more properties that the minimum requirements (the only properties that need licenses are larger houses in multiple occupation – those with at least five people from more than one household). However, these licence schemes are subject to Secretary of State approval if they cover over 20% of a council’s local area or rented housing stock. The Department told us that local authorities find selective licensing to be a useful tool for proactive enforcement action and intelligence gathering. However, to apply for a licensing scheme, local authorities need a good understanding of their local private rental market, which is hard to gather without already having a scheme in place. The time and resource needed to produce an application, and the requirement for schemes to last only five years, present further barriers to local authorities. The Department says it offers a dialogue with local authorities to help them apply for licensing schemes, but local authorities say there is poor communication and limited feedback. Given regulation is managed and delivered locally, it is not clear why the Department restricts the use of larger schemes or on what basis it rejects them.
Recommendation: As part of its planned reforms, the Department should assess whether current arrangements for licensing schemes are working, and whether alternative arrangements may be more efficient and effective.