I chair the all-party Communities and Local Government
Committee in the House of Commons. We’ve been researching and reviewing what
has been happening in the private rented housing sector and we’ve now published
our report and recommendations for action.
The first thing we all agreed was that action must be
taken to tackle sharp practice and abuse by letting agents.
Amazingly letting agents are subject to less control than
estate agents. This lack of regulation is giving rise to sharp practice and
abuse by some letting agents. We were told that the letting sector was the
property industry’s ‘Wild West’. ’Cowboy’ agents who rip off landlords and
tenants have to be stopped. They need to play by new rules or get out of the
sector.
We say that regulation for letting agents must, at the very
least, be brought up to the level of that for estate agents. This would give
the Office of Fair Trading the power to ban agents who act improperly. It would
also put in place new rules to ensure the safe treatment of landlords’ and
tenants’ money.
Secondly, we demanded that action be taken to crack down
on hidden and unreasonable fees and charges imposed by letting agents.
Agents should be required to tell tenants about fees before
they start the letting process.
We confirmed that unreasonable fees and opaque charges are
not confined to a few rogue agents. Many well-known high street agents are just
as guilty. We say that agents must make tenants aware from the outset of the
fees they intend to charge. This means that all property listings–on websites,
in print or in agents’ windows–must be accompanied by a full breakdown of fees.
Thirdly, we confirmed that while the private rented
sector has grown significantly in the past decade, it does not yet offer many
renters what they are looking for.
In particular, the security desired by many families is not
available within the private rented sector. We heard from one father whose 10
year old daughter had already had to move home seven times in her life. Letting
agents should not be chasing renewal fees. Instead they should be working to
ensure the length of tenancies meets the needs of both tenants and landlords.
With the sector providing homes to an increasing number of
families, barriers to longer tenancies have to be removed. However, in return
for offering longer tenancies, landlords should be able to evict tenants much
more quickly when they fail to pay their rent. In addition, mortgage lenders
should remove conditions that limit tenancies to one year.
Fourthly, we want to see renting as an attractive
alternative to owner occupation.
The market has to better meet the needs of renters. Tenants
and landlords need to be much better informed about their rights and
responsibilities. Bad landlords should be driven out of the sector.
The legislation governing the private rented sector has
evolved over many years and often in response to specific problems at a
particular point in time. Far from providing clarity, the result is a
bewildering regulatory framework. It should be simplified and all parties made
aware of their rights and responsibilities. Tenants and landlords are often unaware
of their rights and responsibilities.
So, we called for the legislation covering the private
rented sector to be consolidated and made easier to understand. After this,
there should be a publicity campaign to promote awareness of tenants’ and landlords’
rights and responsibilities. As part of this review, the Government should work
with groups representing tenants, landlords and agents to bring forward a
standard, plain language tenancy agreement on which all agreements should be
based. Included within this standard agreement should be an easy-to-read fact
sheet, setting out the key rights and responsibilities of the landlord and the
tenant.
Fifthly, we could not avoid expressing our concern about
the physical standard of much private rented property.
It is clearly unacceptable that taxpayers’ money is being
used to pay housing benefit to landlords for substandard properties. We’ve
called for local authorities to be given the ability to recoup housing benefit
payments when a landlord is convicted of letting property below legal
standards. Similarly, tenants should be able to reclaim rent paid from their
own resources if their landlord is convicted.
We also think local councils must be given more freedom and
flexibility to raise standards. Centrally-imposed bureaucracy and constraints
on licensing schemes and enforcement should be reduced, but councils must have
the power to require landlords to be part of a recognised accreditation scheme
and have the flexibility to develop approaches to licensing, accreditation, and
enforcement that meet the needs of their areas. There should then be heavy
penalties for noncompliance.
We’ve also called on the Government to
- end the vicious circle
where, in some areas, over-inflated levels of housing benefit drive up
rents, in turn increasing the housing benefit bill still further,
- to tackle evasion of
capital gains and income tax by some private landlords, and
- come up with proposals
to increase the supply of housing across all tenures of housing.