Fifth Report - Reforming the Private Rented Sector

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 … Read more 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 enforcement activity is, and should remain, informal, especially, at least initially, where landlords are non-compliant out of ignorance, but if the proposals are to deter the very worst landlords, enforcement rates will have to improve significantly across the vast majority of local authorities. For this reason, we welcome the proposals to improve enforcement, particularly the property portal, which could be revolutionary, provided it is designed and implemented properly and holds the right information. To this end, the Government should include the following in the information landlords are required to enter on the property portal: all gas and electrical safety certificates and reports; any other reports generated by tradespeople; energy performance data; and details of ombudsman membership and membership of a deposit protection scheme. Furthermore, the Government should take action now to digitise the certificates and other reports that are to be uploaded to the portal, so that rather than being a mere repository of information that has to be trawled through, a coding system can be implemented to enable the portal to verify that documentation is in date and that there are no issues that need addressing. To deter landlords from entering false or misleading information, the 60 Reforming the Private Rented Sector Government should also introduce financial penalties for such offences. This would be consistent with its proposal for deterring landlords from self-declaring inaccurate information regarding compliance with the decent homes standard. Finally, we urge the Government to incorporate the functions of the database of rogue landlords and property agents into the portal as soon as possible. Show less

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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 … Read more 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 need to get the regime up and running. In particular, local and central government should agree what staffing levels will be required and then fund their recruitment. The Government should also assess the availability of environmental health officers and other enforcement staff and work with the sector to ensure that enough places on training courses are available. Local authorities will need many more enforcement officers if the proposals are to make a meaningful difference. Show less

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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 … Read more 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 non-payment of a civil penalty be made a criminal offence and that local authorities be given the power to register an unpaid penalty as a legal charge on the property. We also again recommend that the Government remove the requirement on local authorities to obtain the permission of the Secretary of State to introduce a selective licensing regime covering more than 20% of private rented homes in their areas. It should be for local government, unencumbered by too much central control, to decide the best way to enforce housing standards. Finally, on prosecutions, we repeat the recommendation of our predecessor Committee in its 2018 report, Private rented sector, that courts require offenders to pay costs to local authorities that reflect the actual cost of the enforcement action. We also ask the Government to clarify whether Reforming the Private Rented Sector 61 landlords are able to avoid prosecution for housing offences by transferring ownership of the property before the court hearing. If this is the case, we recommend it consult on what changes are necessary to prevent this from happening. (Paragraph 93) Affordability Show less

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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 … Read more 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 this, it should at least be much clearer about what role it wants the private rented sector to play in the wider housing mix and, in particular, whether it values the involvement of landlords with very small portfolios. Show less

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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 … Read more 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 back and can no longer accommodate them. If the Government believes the PRS is the right place for those on the lowest incomes, it should at least make sure housing benefit does what it was designed to do and covers benefit recipients’ housing costs. For this reason, it should increase LHA rates to realign them with the 30th percentile in each broad rental market area, and commit to conducting a review as soon as possible into whether they should once more be aligned with the 50th percentile. Show less

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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