Source · Select Committees · Housing, Communities and Local Government Committee
Fifth Report - Reforming the Private Rented Sector
Housing, Communities and Local Government Committee
HC 624
Published 9 February 2023
Recommendations
2
Accepted in Part
Para 23
The one exception is the general student PRS market.
Recommendation
The one exception is the general student PRS market. The abolition of fixed-term contracts could make letting to students considerably less attractive to private landlords and so ultimately push up rents or reduce the availability of student rental properties, at …
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Government Response Summary
The government will introduce a ground for possession that will facilitate the yearly cycle of short-term student tenancies, but rejects retaining fixed terms as it unfairly locks students into contracts. It will not introduce codes which cover all student housing.
Ministry of Housing, Communities and Local Government
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4
Accepted in Part
Para 47
We recommend that the Government: • increase from six months to one year the period...
Recommendation
We recommend that the Government: • increase from six months to one year the period at the start of a tenancy during which the landlord may not use either ground; • increase the notice period from two months to four …
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Government Response Summary
The government has declined to increase the initial period where landlords cannot use grounds for possession to one year or increase the notice period to four months, but will maintain the current six-month restriction and two-month notice period. The government will mitigate misuse of grounds by restricting landlords from remarketing or reletting the property within three months of using moving or selling grounds.
Ministry of Housing, Communities and Local Government
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6
Accepted in Part
Para 49
We strongly recommend that the Government introduce a specialist housing court as the surest way...
Recommendation
We strongly recommend that the Government introduce a specialist housing court as the surest way of unblocking the housing court process. Whether it does this or not, it is absolutely essential that the Government significantly increase the courts’ ability to …
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Government Response Summary
The government is working with the Ministry of Justice and HM Courts and Tribunal Service to improve the court possession process, including digitizing more of the process, exploring prioritization of certain cases like antisocial behavior, improving bailiff recruitment, and providing early legal advice for tenants. Implementation will not take place until sufficient progress has been made to improve the courts, and the abolition of Section 21 will not proceed until reforms to the justice system are in place.
Ministry of Housing, Communities and Local Government
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7
Accepted in Part
A properly functioning courts system should resolve most of the issues with the process of...
Recommendation
A properly functioning courts system should resolve most of the issues with the process of seeking possession under section 8, but further adjustments to the discretionary ground for possession in respect of antisocial behaviour are also necessary. As currently designed, …
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Government Response Summary
The government agrees with the intent to ensure landlords can act more quickly to evict antisocial tenants and will make grounds for possession faster and easier to prove, while maintaining judicial discretion in antisocial behaviour cases and will reduce the notice period for the mandatory antisocial behavior ground. They will ensure courts can make a possession order where tenants are evicted on the grounds of ASB and later convicted of an offence and will not make Ground 14 mandatory.
Ministry of Housing, Communities and Local Government
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8
Deferred
Para 66
The rate of non-decency in the private rented sector (PRS) is much higher than in...
Recommendation
The rate of non-decency in the private rented sector (PRS) is much higher than in the social housing sector, so we welcome the introduction of a legally binding decent homes standard (DHS). The cost to landlords of meeting the new …
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Government Response Summary
The government welcomes the introduction of a legally binding Decent Homes Standard (DHS) and has held technical consultations with stakeholders to consider implementation issues. These include the time landlords need to comply, how to balance certainty and minimum standards, and the need to align implementation with wider reforms to the PRS.
Ministry of Housing, Communities and Local Government
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11
Rejected
Para 69
Given the importance of the MEES to the Government’s net zero strategy, not to mention...
Recommendation
Given the importance of the MEES to the Government’s net zero strategy, not to mention the health, cost and other benefits of living in a warm home, we recommend that the MEES be incorporated into criterion D and that the …
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Government Response Summary
The government scrapped proposals to require landlords to meet EPC C from 2025, stating landlords can still use government-backed schemes to improve energy efficiency at a time that suits them.
Ministry of Housing, Communities and Local Government
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12
Acknowledged
Para 89
If the decent homes standard is to improve standards in the private rented sector, local...
Recommendation
If the decent homes standard is to improve standards in the private rented sector, local authorities will have to enforce it vigorously, but at the moment levels of housing enforcement activity vary hugely between local authorities. We accept that much …
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Government Response Summary
The government agrees a strong enforcement regime is vital and is committed to ensuring local councils have the powers and resources they need to tackle criminal landlords. The Levelling Up, Housing and Regeneration Bill includes measures to set minimum standards for enforcement, which they will consult on.
Ministry of Housing, Communities and Local Government
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14
Acknowledged
Para 91
In the current economic climate, we accept that the Government is unlikely to provide significant...
Recommendation
In the current economic climate, we accept that the Government is unlikely to provide significant additional long-term funding for local authorities, but it must consult them, if it has not already done so, on how much short-term funding they will …
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Government Response Summary
The government agrees a strong enforcement regime is vital and is committed to ensuring local councils have the powers and resources needed and is addressing inconsistencies in enforcement activity.
Ministry of Housing, Communities and Local Government
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16
Acknowledged
If it is not already doing so, the Government should consult local authorities about what...
Recommendation
If it is not already doing so, the Government should consult local authorities about what amendments are needed to the civil penalties regime and include any necessary legislative changes in the proposed renters reform Bill. In particular, we recommend that …
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Government Response Summary
The government agrees a strong enforcement regime is vital and is committed to ensuring local councils have the powers and resources they need to tackle criminal landlords. The Levelling Up, Housing and Regeneration Bill includes measures to set minimum standards for enforcement, which they will consult on.
Ministry of Housing, Communities and Local Government
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18
Acknowledged
Para 106
We recommend that the Government review the impact of recent changes to taxation rules in...
Recommendation
We recommend that the Government review the impact of recent changes to taxation rules in the buy-to-let sector, with a view to making changes to make it more financially attractive to smaller landlords. If it is not willing to do …
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Government Response Summary
The government acknowledges concerns about the impact of taxation rules but states that the intention was to level the playing field and the private rented sector remains stable in size.
Ministry of Housing, Communities and Local Government
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20
Deferred
Para 108
We recommend that the Government use the powers in the Levelling-up and Regeneration Bill, if...
Recommendation
We recommend that the Government use the powers in the Levelling-up and Regeneration Bill, if passed by Parliament, to implement a tourist accommodation registration scheme as soon as possible. We ask that the Government also update us on whether the …
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Government Response Summary
The government is introducing a registration scheme for short-term lets and consulted on a new use class. They are carefully considering responses and will respond in due course.
Ministry of Housing, Communities and Local Government
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21
Accepted
Para 112
The current high cost of private renting is rooted in the decades-long failure of successive...
Recommendation
The current high cost of private renting is rooted in the decades-long failure of successive Governments to build enough homes. We accept that the purpose of the White Paper was not to make the PRS more affordable, and that the …
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Government Response Summary
The government states it is on track to meet its manifesto commitment to deliver one million homes and highlights ongoing commitments to housing supply and regeneration, including revisions to the National Planning Policy Framework and support for the Build to Rent sector.
Ministry of Housing, Communities and Local Government
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22
Acknowledged
Para 117
The failure of local housing allowance (LHA) rates to keep pace with market rents is...
Recommendation
The failure of local housing allowance (LHA) rates to keep pace with market rents is quite obviously making the private rented sector even less affordable for many people who are only there because the social housing sector has been cut …
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Government Response Summary
The government acknowledges the issue but does not commit to increasing LHA rates to the 30th or 50th percentile, instead highlighting Discretionary Housing Payments and a commitment to reviewing LHA rates annually.
Ministry of Housing, Communities and Local Government
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25
Rejected
Para 128
The Government should assess whether the data held by the VOA could be used to...
Recommendation
The Government should assess whether the data held by the VOA could be used to determine justified rent increases in the PRS. If it concludes that it could, we recommend either that this information be made public so that landlords …
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Government Response Summary
The government rejects intervening in rent setting and states the First-Tier Tribunal is best placed to resolve disputes, and it will update guidance to support engagement with the Tribunal.
Ministry of Housing, Communities and Local Government
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26
Rejected
By getting rid of rent review clauses, the Government could be removing a mechanism for...
Recommendation
By getting rid of rent review clauses, the Government could be removing a mechanism for predictable and fair rent rises and replacing it with a system that relies on a resource-intensive and time-consuming appeals process. We recommend Reforming the Private …
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Government Response Summary
The government will not abolish rent review clauses, but states that landlords can increase rents once a year and tenants can challenge this at the First-tier Tribunal if they think it is above market levels. It will not set or steer rent increases.
Ministry of Housing, Communities and Local Government
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27
Accepted in Part
Para 138
Currently, letting agents are required to belong to one of two government-approved ombudsman schemes, the...
Recommendation
Currently, letting agents are required to belong to one of two government-approved ombudsman schemes, the Property Redress Scheme or the Property Ombudsman, but membership for landlords is voluntary. The White Paper proposes the introduction of an ombudsman for all private …
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Government Response Summary
The government recognises the value of consolidating the housing redress system, but will address it through the Landlord Ombudsman service and does not think it is necessary to bring different elements of housing redress under a single legal framework.
Ministry of Housing, Communities and Local Government
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28
Accepted in Part
Para 143
The Government says it will make it illegal for landlords to have blanket bans on...
Recommendation
The Government says it will make it illegal for landlords to have blanket bans on letting to benefit recipients. If this is a commitment to preventing landlords from discriminating against benefit recipients, it is unrealistic. If it is a commitment …
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Government Response Summary
The government will prohibit blanket bans on benefit recipients, but landlords can still make final decisions based on referencing checks. They will work with the insurance sector, explore improvements to welfare support information, and raise awareness of services provided by local councils.
Ministry of Housing, Communities and Local Government
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29
Rejected
Para 149
The proposal to make it easier for landlords to allow pets by making pet insurance...
Recommendation
The proposal to make it easier for landlords to allow pets by making pet insurance a permitted payment under the Tenant Fees Act 2019 is a sensible and proportionate measure that could make a meaningful difference. On the other hand, …
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Government Response Summary
The government disagrees with abandoning the proposal to strengthen tenants' rights to request to keep a pet, stating landlords can refuse animals if it is reasonable, taking into account factors like the size of the pet and property.
Ministry of Housing, Communities and Local Government
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30
Accepted in Part
The success of the Government’s reforms depends to a great extent on tenants knowing their...
Recommendation
The success of the Government’s reforms depends to a great extent on tenants knowing their rights, and on landlords knowing that they know them. For this 64 Reforming the Private Rented Sector reason, the Government should update the How to …
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Government Response Summary
The government plans to update the 'How to Rent' guide and modernize the way it communicates tenants' rights and responsibilities. They will work with various groups to maximize access to advice and report back to the Select Committee, though the specific request for the ombudsman to award compensation for failing to provide a copy of the guide was not addressed.
Ministry of Housing, Communities and Local Government
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Conclusions (11)
1
Conclusion
Acknowledged
Para 22
The abolition of fixed-term tenancies, combined with the abolition of section 21, would undoubtedly give tenants greater security of tenure. We understand the argument that fixed-term tenancies should remain available where both parties want them, but in practice, given the current shortage of private rental properties, this would likely result …
Government Response Summary
The government states tenants will be able to give notice at any point during the tenancy to avoid replication of fixed terms, and has increased the notice period to two months to ensure landlords have sufficient guarantee of rent.
3
Conclusion
Accepted in Part
Para 46
We recognise that the majority of private landlords are responsible and have no desire or financial incentive to evict tenants without good reason, and that for these landlords section 21 feels like an indispensable means of evicting bad tenants, but the blight of unfair eviction and insecurity of tenure experienced …
Government Response Summary
The government is retaining the two-month notice period and will mitigate misuse of the sales/occupation grounds by restricting landlords from remarketing/reletting within three months of using those grounds.
5
Conclusion
Acknowledged
Para 48
Before section 21 can be repealed, landlords must have confidence in their ability to regain possession under section 8, especially in the case of rent arrears and antisocial behaviour. The biggest obstacle to this is the capacity of the courts. We continue to maintain that the best way to improve …
Government Response Summary
The government recognises the importance of making the court process smooth and efficient and is working with the Ministry of Justice and HM Courts and Tribunal Service to drive forward improvements to the court possession process, including digitising the process, exploring prioritisation of certain cases, and improving bailiff recruitment.
9
Conclusion
Deferred
Para 67
In respect of criteria B, C and D, the Government says it is considering a cap on costs, above which landlords would be considered compliant, as is already the case with the minimum energy efficiency standards (MEES). We agree with this, on the basis that it would be unreasonable and …
Government Response Summary
The government is considering a cap on costs and alignment of criterion D with MEES, and is working to understand landlords’ circumstances through ongoing technical consultations.
10
Conclusion
Rejected
Para 68
We are concerned that detached private rented homes with a floor space under 50 square metres are exempt from the MEES, although it is unclear how many homes fall into this category.
Government Response Summary
The government has scrapped proposals to require landlords to meet EPC C from 2025 in their private rented properties; landlords can still take advantage of government-backed schemes to improve energy efficiency but at a time that suits them.
13
Conclusion
Acknowledged
Para 90
We are conscious, however, that the financial position of local authorities remains extremely precarious, that this partly explains the lack of enforcement activity, and that some of these proposals will place an additional burden on local authorities’ resources. The Government is yet to carry out the new burdens assessment it …
Government Response Summary
The government agrees a strong enforcement regime is vital and is committed to ensuring local councils have the powers and resources needed and is addressing inconsistencies in enforcement activity.
15
Conclusion
Acknowledged
Para 92
The new regulatory regime will only become self-financing if local authorities can recoup the cost of enforcement from non-compliant landlords, but we have heard from local government representatives that the civil penalties regime, which in theory should fund enforcement activity, is currently not working for local authorities, and this is …
Government Response Summary
The government agrees a strong enforcement regime is vital and is committed to ensuring local councils have the powers and resources needed and is addressing inconsistencies in enforcement activity.
17
Conclusion
Acknowledged
Para 105
The data suggests that the reduction in the size of the PRS, which the Minister partly attributed to the covid pandemic, began three years before the pandemic, in 2016–17. For this reason, we see little reason to believe the decline is short term, although the pandemic may have exacerbated the …
Government Response Summary
The government acknowledges the importance of the private rented sector and values the involvement of all responsible landlords, regardless of portfolio size, and states that it wants a thriving private rented sector that helps to accommodate people's housing needs.
19
Conclusion
Acknowledged
Para 107
We welcome the Government’s introduction of a tourist accommodation registration scheme and its commitment to consulting on changes to the Town and Country Planning (Use Classes) Order 1987, but it remains to be seen if this will suffice to control the holiday-let market, which is having a serious impact on …
Government Response Summary
The government acknowledges concerns and notes that consultations were held on a registration scheme for short-term lets and a new use class, and the responses are being considered.
23
Conclusion
Acknowledged
Para 126
When a tenant objects to an in-tenancy rent increase, they can refer their case to the First-tier Property Tribunal, which determines the market rent for the property. The Government says it will remove the tribunal’s power to increase rents and thereby give tenants greater confidence to challenge unjustified increases. If …
Government Response Summary
The government states rents should be agreed between landlords and tenants, and it is not for government to intervene. The First-Tier Tribunal is best placed to resolve disputes, and it will update guidance to support all parties in engaging with the Tribunal.
24
Conclusion
Rejected
Para 127
Tenants and landlords need access to reliable data on local market rents in comparable properties. The closest available data appears to be that held by the Valuation Office Agency (VOA), which is used to determined local housing allowance rates for broad market rental areas. If sufficiently accurate and granular, this …
Government Response Summary
The government rejects intervening in rent setting and states the First-Tier Tribunal is best placed to resolve disputes, and it will update guidance to support engagement with the Tribunal.