Latest proposals from the government in PRS report

Government research shows that one in five households (4.7 million, according to the English Housing Survey 2016-17) now live in the private rented sector, with long-term renting a growing trend. While the good news is that the vast majority of tenants are satisfied with their homes, around 800,000 properties still have at least one Category One hazard – such as mould or faulty wiring - and 200,000 tenants said they had been abused or harassed by their landlord.

So, although conditions have improved dramatically for tenants in the last decade, there is clearly still work to do to clean up the lower end of the market.

As such, in its report on the private rented sector, published in April, the Housing, Communities and Local Government (HCLG) committee made several proposals for improving standards and cracking down on criminal landlords.

The report focuses on five key areas for improvement:

  1. A review of all PRS legislation. The committee believes the legislation giving local authorities their powers to intervene in the sector is too complex and outdated. In particular, the Housing Health and Safety Rating System (HHSRS) should be replaced with a more straightforward set of quality standards. It recommends that the Law Commission should review all PRS legislation to make it clearer for landlords, tenants and local authorities.
  1. Greater legal protection for the most vulnerable tenants. Even though retaliatory evictions have been illegal since the Deregulation Act came into force in October 2015, 44% of tenants are still worried that if they complain about conditions, repairs and maintenance, their landlord might force them out of their home. The committee believes a specialist housing court is needed to give tenants a more accessible route to hold their landlords to account.
  1. More severe penalties for criminal landlords. The committee found that even the threat of a civil penalty of up to £30,000 and a ban from letting property was not enough to deter the worst criminal landlords – many of whom have a business model that relies on exploiting the most vulnerable renters. The proposal is that councils should be given the powers to levy even more substantial fines and, in the most serious cases, confiscate properties from landlords.
  1. Greater support for local authorities. While local authorities already have considerable powers to protect tenants by penalising and prosecuting criminal landlords, the committee reported that enforcement action has been too low and inconsistent, with 60% of councils failing to prosecute a single landlord in 2016.

Given that the main reason for this appears to be insufficient resources, the report recommends the government establishes a new fund to support enforcement efforts. This would undoubtedly make a difference, as many local authorities said that the cost of investigating and prosecuting criminal landlords was rarely recovered through the courts.

It’s also suggested that there should be an online facility where local councils can publish their enforcement strategies and share best practice, as well as a national ‘benchmarking scheme’ to support them in taking action.

  1. A review of selective licensing schemes. There is mixed evidence on the value of selective licensing schemes introduced at a local authority level. The basic principle is good: that these decisions are made based on an understanding of local needs and councillors are directly accountable to the local electorate. However, the process of applying to the Secretary of State for approval is deemed to be too slow, lacking in transparency and too expensive, so needs to be reviewed.

All in all, these proposed changes are nothing but good news for law-abiding landlords. If implemented, they should lead to greater clarity on your legal responsibilities and obligations, better regulation at a local authority level and fewer rogues letting down what is, for the most part, a very respectable sector.

This information has been provided by our partner Mortgage Advice Bureau. For more information relating to Mortgages or for Mortgage Advice please visit Mortgage Advice Bureau.