MPs call for reform of private renting

Posted: April 13, 2022 | Author: julesbirch | Filed under: Private renting, Regulation, Social housing |1 Comment

Originally written as a column for Inside Housing

This is shaping up to be a significant year for the regulation of rented housing, with the Social Housing Regulation Bill set to be followed by a white paper on the private rented sector.

While there are still clear differences between the two sectors, there are also similarities in terms of landlords who are unaccountable and tenants who lack a say. In a hybrid world, social housing has become more business focussed and private renting has become by default home to many of those in the greatest housing need.

Yet while the government’s stance on the regulation of social housing has come into focus – the details remain to be seen but creating a national tenant forum and giving the regulator a consumer focus look like a reversal of the light-touch regulation introduced after 2010 – regulation of private renting consists of ‘piecemeal legislative changes’ and the government lacks the data even to evaluate their impact.

That’s the verdict of MPs on the all-party Public Accounts Committee in a report published today [Wednesday] on the regulation of a sector that has doubled in size in the last 20 years and is now home to 11 million people.

This is no coincidence given that the whole point of the reforms introduced after 1988 – the assured shorthold tenancy (AST), Section 21 and the rest – was deregulation.

Or that, within a month of becoming housing minister in 2010, Grant Shapps was promising landlords that ‘the government has no plans to create any burdensome red tape and bureaucracy, so you are able to continue providing a service to your tenants’.

But a sector that is now an investment or a pension for 1.5 million individual landlords is also home to millions more tenants and what’s striking from the committee’s report is how much the terms of the debate have changed.

For starters, the report concludes that ‘it is too difficult for renters to realise their legal right to a safe and secure home’.

An estimated 589,000 private rented homes in England (13 per cent) have at least one Category 1 threat to health and safety that landlords are legally obliged to address – and even that may be an under-estimate.

It will not come as news to tenants that: ‘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.’

And it will not surprise local authorities to learn that they ‘do not have the capacity and capability to ensure an appropriate level of protection for private renters’. Some of them inspect just 0.1 per cent of the rentals in their area.

The committee says that this has created a ‘postcode lottery’ in which compliance with legal standards varies across the country and very few councils can afford tenancy relations officers to support tenants facing illegal eviction or harassment.

The government has introduced a series of legal changes in recent years but their consistency and effectiveness is exemplified by the most dramatic of them: only 10 landlords and letting agents have been banned by local authorities since new powers were introduced in 2016.

The most symbolic change – scrapping Section 21 – was first proposed in England three years ago this month but has still not been implemented.

Licensing and registration – which must surely be the basis of any system of regulation – are still regarded with suspicion at Westminster.

Local authorities can apply to run a selective licensing scheme but the committee says ‘it is not clear why the department restricts the use of larger schemes or on what basis it rejects them’.

Meanwhile the housing department ‘lacks good enough data to understand the nature and extent of the problems renters face’ or even to evaluate the impact of its own legislative changes.

For example, the retaliatory eviction of tenants who raise complaints was theoretically banned in 2015 but the department had no data on landlords’ reasons for evictions.

The government did confirm that it will publish a white paper ‘later in 2022’ and that this will cover security of tenure, enforcement and redress.

This represents an opportunity to make ‘significant improvements’, says the committee, but the government will not be able to take it without a full grasp of the challenges facing the sector and an overarching strategy for how to address them.

Change is on the way but, even more so than in the social rented sector, it very much remains to be seen whether it will be enough.

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