Monday, 24 March 2014

Progress on the private rented sector

Progress on some issues often appears slow, even when there is agreement

The all-party communities and local government select committee, which I chair, has conducted a lengthy investigation into private rented housing, resulting in a report and a government response to our recommendations. And at last, we have had a debate about the next steps.

The private rented housing sector is of increasing importance with 18% of households now living in privately rented homes. This growth did not happen suddenly, following the banking crisis of 2008; it had been taking place before that over a period of time.
The private rented sector is now home to a wider range of households, particularly families with children who need more security.

Our investigation took us to Germany, where we found that a far greater proportion of households rent. Standards are good and tenants have tenancies for life, which they can pass on to family members.

We have made many recommendations and many of the committee’s ideas can be found in the government’s Review of Property Conditions in the Private Rented Sector. Having initially dismissed our recommendations for mandatory carbon monoxide and smoke alarms in private rented homes and for five-yearly checks of the electrical installations, the government is now consulting on them.

However, there are two specific recommendations that the government has rejected. The first is: greater flexibility of local authority powers to raise standards and to deal with rogue landlords. The second: the regulation of letting agents.

The government has yet to respond positively to our call for simpler regulation, as we currently have a bewildering array of legislation and regulation. This doesn’t help landlords, tenants or regulators. Given its drive to tackle red tape and bureaucracy, such a refusal is surprising. However, following our call for easy-to-read fact sheets and model tenancy agreements, the government has produced a draft tenant’s charter and is promising a model tenancy agreement.

We asked for a review of the housing health and safety rating system. Although valued by many professionals, most landlords – let alone tenants – find it difficult to understand. The government seems unprepared to take on a wholesale review, but it is trying to produce guidance for tenants and to update the methodology.

Some of the worst housing standards are in the private rented sector. That does not mean every such property is bad. We should not give all private landlords a bad name.
But as well as some of the worst properties, the private rented sector has some of the most vulnerable occupiers, and that juxtaposition should really worry us.

Some landlords simply want to sit and do nothing, while others blatantly break the law and think they can get away with it. We must bear down on the really bad landlords without putting extra burdens on the good ones.

We did not favour a national landlord licensing scheme because we have tended to be localist and to believe that authorities should be allowed to choose for themselves and local people. However, selective licensing does tend to be cumbersome, time consuming and bureaucratic. The criteria are currently very restricted. We proposed relaxed criteria, greater flexibility for councils, and the ability to have a local accreditation scheme which was mandatory for all landlords.

Unfortunately, the government has said no to mandatory accreditation schemes and no to a review of the flexibility of selective licensing. Its latest proposals suggest tightening the criteria for selective licensing, rather than increasing flexibility. Two steps forward, one back.

I have also pressed the government to take appropriate action to ensure that, when councils successfully prosecute bad landlords, they should be entitled to get back their full reasonable costs. Why should the worst landlords be subsidised by ordinary hard-working families?

The long-term solution is of course to increase the supply of housing, including new purpose-built accommodation for private renting. If we could convert benefits payments to bricks and mortar instantaneously we might well have found the holy grail. We shall need to return to this.

It’s a case of ‘some progress made; but a lot more to do’.

This article first appeared in the Local Government Chronicle on 21 March 2014