Inquiry into Private Rental Sector Publishes Findings

Inquiry into Private Rental Sector Publishes Findings

The House of Commons Committee of Public Accounts has published its report following an inquiry into the regulation of England’s private renting sector.

The committee questioned residential rental sector stakeholders and senior officials at the Department for Levelling Up, Housing and Communities (DLUHC) on how fair private renting regulations are for renters. 

The report’s conclusions and recommendations were:

1.  It is too difficult for renters to realise their right to a safe and secure home.   

●      13% (589,000) of privately rented homes in England present at least one serious threat to health and safety that landlords are legally obliged to address.

●      These category 1 hazards put tenants at risk of:

○      Serious illness

○      Harassment

○      Homelessness

●      25% of landlords won’t let to non-British passport holders.

●      52% of landlords won’t let to tenants who receive housing benefit.

Recommendations

DLUHC is considering a mandatory redress scheme for landlords. This scheme will need to be designed well to be effective.

2.  Local authorities do not have the capacity and capability to ensure protection for private renters. 

●      Compliance with legal minimum rental sector standards is inconsistent across England.

●      The proportion of privately rented properties with category 1 hazards ranges from 9% in London to 21% in Yorkshire and the Humber.

●      Most local authorities do not have the capacity to protect tenants and ensure landlords comply with regulations.

●      The result is a postcode lottery for tenants.

Recommendations

DLUHC should assess the resources needed for local authorities to regulate effectively. It should take into account the:

●      Size, types and quality of private rented properties

●      The demographics of renters

3.  DLUHC is not doing enough to help local authorities regulate effectively.

●      The legislative powers used by local authorities to enforce private rental regulations are weak because they are spread across multiple bodies.

●      Local authorities say DLUHC is not proactive in supporting them and sharing best practices.

●      DLUHC does not:

○      Understand what regulatory approaches help local authorities ensure landlords comply with obligations

○      Understand the challenges local authorities face

○      Have an early warning system for when local regulations fail private renters

Recommendations

DLUHC should take a proactive approach to support local regulators and share good practices.

4. Local authorities are constrained by DLUHC’s approach to licensing landlords. 

●      There are a number of barriers to local authorities applying for DLUHC licensing schemes. These include:

○      A lack of available private rental market intelligence

○      A lack of time and resources to apply

○      Short lifespan of the scheme

○      Poor communication and limited feedback from DLUHC  

Recommendations

As part of its planned reforms, DLUHC should assess whether current arrangements for

licensing schemes are working, and whether alternative arrangements may be more efficient

and effective.

5. DLUHC lacks data to understand the problems renters face. 

●      DLUHC lacks data on the challenges facing landlords, tenants, and local authorities. 

●      This includes data on:

○      Complaints

○      Overcrowding

○      Harassment

○      Evictions

●      It also does not know who is vulnerable and how this impacts their renting experience.

●      It is unable to benchmark success because it lacks data to evaluate the impact of recent legislative changes.

Recommendations

DLUHC should develop a coherent strategy to identify and collect the data it needs to:

●      Understand the problems renters are facing

●      Evaluate the impact of legislative changes

6. DLUHC’s forthcoming white paper presents an opportunity for improvement to the private rented sector.

●      In the past decade, the DLUHC has made improvements in the private rented sector, including:

○      Protecting tenants from eviction during the COVID-19 pandemic 

○      Banning unnecessary charges through the Tenant Fees Act and deposit protection scheme

●      But these changes have been piecemeal and DLUHC does not understand what impact they have had on the market.

Recommendations

As part of its planned reforms, DLUHC should ensure it understands the cumulative impact of proposed changes on tenants, landlords and the housing market.  

DLUHC’s Response

DLUHC says that it recognises the challenges within the sector and has committed to proposing reforms. It plans to set these out in a white paper later in 2022.

The Role of DLUHC and Local Authorities

DLUHC is responsible for ensuring that the rented sector is fair for tenants by legislating and creating policies used to regulate the sector. 

Local authorities are responsible for regulating their local rental markets and ensuring landlords comply with legal obligations. 

They choose how to regulate based on local priorities and can draw on a range of investigation and enforcement tools available.

EVO’s mission is to improve the quality of life for all parties involved in rented accommodation. Through software that allows for easy reporting of any maintenance or repair issues, EVO ensures that any work needed can be executed quickly and efficiently.