Friday, 6 December 2013

Private rented housing

The private rented sector is growing. Between 1999 and 2011/12, the number of households renting privately increased from around two million to 3.8 million.

More people now rent privately than live in social housing. Yet the market is still relatively immature and too often fails to offer what renters require.

For example, the predominance of the standard six-month tenancy agreement is becoming increasingly unsuitable for many in the sector, including a growing number of families who require a stable home to develop community links and from which their children can attend school.

In July, following a six-month inquiry during which we received evidence from nearly 200 individuals and organisations, my committee published its wide-ranging report on the private rented sector. The report contained a number of recommendations to the Government on how to improve private renting.
Government responses to our reports can sometimes be disheartening. I was therefore pleased to see the Government embrace so much of what we said on private renting, not least in its proposal for a tenants' charter, which although perhaps not going as far as I would like, is a step in the right direction.

The Government's decision to conduct a review into the rules around carbon monoxide detectors and smoke alarms is also welcome. Moreover, I am pleased that it intends to examine whether rent repayment orders could be used to claw back rent or housing benefit payments from landlords renting properties found to have serious health and safety risks.

We could not see why a minority of landlords who had little concern for the safety and wellbeing of their tenants should be subsidised by the taxpayer.

The Government still, however, rejected a number of our calls for action. In particular, it missed a key opportunity to give local authorities the powers and freedoms they need to raise standards in their areas.

Councils are already working hard to improve life for those living in the private rented sector. We were impressed, for example, when we visited Leeds in May, by the steps the city council was taking to raise standards in the sector.  There were a number of strands to its approach. These included a voluntary landlord accreditation scheme, which has not only helped to educate members of the scheme about their responsibilities but drive out some bad landlords as tenants moved to the better landlords.
Leeds had also introduced selective licensing in the Cross Green area of the city, leading to a number of prosecutions, reduced anti-social behaviour, and an improved local environment. And it had begun to target neighbourhoods on a street-by-street basis, inspecting properties and providing help, advice and support.

Leeds had achieved these commendable improvements under the current law, but much more could be done if they, and other councils, had greater flexibility.

One of the criticisms of voluntary accreditation is that the worst landlords do not join the schemes, and therefore do not have to meet the standards required. Why not then give councils the power to make accreditation compulsory?

We also heard from Leeds about the bureaucracy around selective licensing: developing the business case and getting it approved had cost the council around £100,000. Other councils told us that they could not introduce such a scheme because their areas did not meet the criteria of low demand or high anti-social behaviour.

Under a localist approach, councils should be given much more discretion over how and when selective licensing can be introduced.

Discretion in the use of powers should be matched with greater freedom in the use of resources. Many hard-pressed councils are struggling to meet the costs of their enforcement work. In its response, the Government accepted that landlords sometimes avoided prosecution because the costs of the council taking them to court were too high.

It was concerned, however, that "over-zealous" councils would issue fines as a way of generating revenue. This belies a lack of trust in councils and contradicts the Government's claims to be localist.
Councils should have greater ability to generate their own resources and should be trusted in doing so. One option would be for them to be given the ability to impose penalty charges for certain breaches without automatic recourse to court action.

There is much to be welcomed in the Government's response to our report.  However, more action is needed if we are to raise standards across the private rented sector and it is to become a viable alternative to owner occupation. A more localist approach, with greater freedoms for councils, is a good place to start.

This article was first published on the Local Government Association Website on 05/12/13