A new policy review document from the Labour Party has just been published. I managed to find a bit of time this morning to take a look at it.
There are some interesting proposals.
Housing problems and statistics
A large part of the document is talking about how awful it all is (with quotes) and how some of the worst standards are to be found in the private rented sector (PRS). For example:
- The PRS represents 16.5% of the total households in England
- Nearly 1/3 of all PRS households have children and nearly 15% of all couples with children live in the PRS
- The proportion of private rented stock which is ‘non decent’ is 35%, compared to 22% owner occupied homes and 17% of social housing
- Safety hazards are in 21% of PRS homes compared to 7% in the social sector
- In 2010/11 local authorities received over 86,000 complaints and have said in the past that they are aware of 1,477 serial bad landlords
The report goes on to point out the problems that local authorities have with enforcement issues, and the fact that many PRS landlords are well meaning but lack knowledge of their legal obligations.
The report also refers to the ‘retaliatory eviction’ problem and the general costs to society of poor housing.
To find out what the main suggestions are to resolve these problems you have to read to the end. They are:
1. A national register of landlords
Which will
- Assist local authorities identify landlords
- Allow distribution of information to and communication with landlords
- Help with deal with the problems of tax evasion (apparently costing the Treasury some half a billion pounds)
Item 4 below also indicates that the right to operate as a landlord will be linked to being on the register.
2. A new national private rented property standard
Which would include current minimum standards on
- Tenancy deposits
- Energy efficiency
- Property conditions
- Response times and repairs
The report goes on to say that this will be linked to incentives which will only be available to properly registered landlords (including with HMRC)
3. Improved local enforcement
This will
- Remove red tape and make it easier for local authorities to introduce licensing schemes
4. Tougher sanctions on bad landlords
Which will involve
- reviewing penalties and sentencing guidelines (presumably by making them less derisory)
- assessing how they can stamp out retaliatory eviction
- removing bad landlords from the national register so they can no longer operate as landlords
There is also an interesting paragraph which follows this which refers to potential benefits to compliant landlords:
- supplying renters from local housing registers (probably not much of an incentive in the current housing shortage)
- direct payment of benefit to PRS landlords and
- an improved legal process to help landlords evict non paying tenants and tenants who commit anti social behaviour including criminal damage
Conclusion
If implemented these proposals could go a long way towards resolving current problems.
In particular if the right to use section 21 is linked to landlords housing register, then landlords whose properties are not up to standard could be denied the right to use the section 21 procedure until they are compliant.
This is in my view by far the best way to deal with the retaliatory eviction problem.
I also believe that the only way to encourage longer term tenancies (apart from Rent Act 1977 like legislation which would destabilise the industry) is by changing the eviction process to make it easier for landlords to evict genuine bad tenants. I discussed this previously here.
So overall I am quite impressed with the proposals. However as always the devil will be in the detail and we will have to wait and see whether these are serious proposals or just window dressing.
New ideas?
The only thing I really take issue with is the suggestion that these are ‘new ideas’. For example a lot of them appeared last year in my bigger picture ebook.
You can download the policy document from >> here.
HB welcome says
May 30, 2013 at 1:10 PMThis is La-La land thinking.
The idea that supplying private landlords with social tenants will somehow incentivise them shows how out of touch with reality they are.
It is not cutting red tape, it is creating it.
Blanket licensing results in a huge administration scheme for the 75% of ‘good’ landlords that bother to register. It has no deterent on the so called rogues whatsoever. If anything, it helps the criminals by shifting the focus away from them onto the ‘good’ landlords and by pushing their target market further underground.
In the policy review, Newham is pointed out as Labour innovation in practise. It has been a complete disaster.
There are now around 10,000 unlicensed landlords in a constant state of flux, how are they going to prosecute that lot? How many of the 10,000 are the real criminals who they should be concentrating on targetting?
I am aware of only 1 successful licensing prosecution to date (and he could have been done on numerous other grounds instead).
Newham now have to direct vast resources administering 26,000 good landlords.
It’s a bureaucrat’s wet dream.
Richard Ashton, Residential Landlords' Association says
May 30, 2013 at 4:39 PMTessa,
The Residential Landlords’ Association certainly supports efforts to eradicate criminals from the private rented sector (PRS) and raise standards within the sector. However, we are concerned at some of the flaws in the argument outlined in this article, in particular the following:
1) THERE IS A HIGH SATISFACTION RATE AMONGST PRS TENANTS
As mentioned in the article, the private rented sector (PRS) has indeed experienced tremendous growth over the last decade, with 1.62 million more properties entering the market since 1999, increasing the number of PRS properties to 3.62 million by 2010/11.
However, against this backdrop of growth, the PRS has still managed to achieve a high national satisfaction rating among tenants. According to the latest English Housing Survey, 84 per cent of tenants state they are ‘satisfied’ with their accommodation, compared to 80 per cent in the social sector.
2) A FAILURE TO ENFORCE EXISTING LEGISLATION
The article states that, “The report goes on to point out the problems that local authorities have with enforcement issues.” It doesn’t state that local authorities are armed with over 100 laws and 400 regulations to police the PRS. Any failure of enforcement is primarily a result of their inabilities to utilise these laws and regulations. Another layer of bureaucracy is no guarantee of improved enforcement
It also seems ironic that an intended aim of improved local enforcement will be to “Remove red tape and make it easier for local authorities to introduce licensing schemes” – in other words replace red tape with red tape!
3) A NATIONAL REGISTER WOULD COST £300m
The last Labour Government estimated the cost of a national register of landlords to be £300 million and its own impact assessment described full licensing as “onerous, difficult to enforce and costly”. Just a few years later, Labour politicians are in danger of ignoring their own advice.
4) EVICTIONS – THE LAW FAVOURS THE TENANT
Any landlord in their right mind would avoid retaliatory evictions at all costs. The law favours the tenant, and any landlord who wants to take this approach must have deep pockets and the patience of a saint. The RLA hears enough horror stories from landlords who have struggled to remove tenants for genuine reasons, to think that the problem of retaliatory evictions could well be being over-egged. In the main landlords want happy tenants to remain in their properties for as long as possible.
5) THE ALTERNATIVE?
The RLA is in the process of developing a two-path approach to regulation that would see the majority of landlords pointed towards a self-regulating, national accreditation scheme, which would allow local authorities to concentrate their efforts on pursuing criminals.
Our initial draft proposals can be found at: http://news.rla.org.uk/rla-outline-plan-for-two-path-prs-self-regulation/.
In addition to the above, we have also published proposals for longer term tenancies, which can be found at: http://news.rla.org.uk/landlords-look-for-workable-longer-term-tenancies/.
Richard Ashton
Policy & Communications Manager
Residential Landlords’ Association
Tessa Shepperson says
May 31, 2013 at 8:37 AM@Richard Thanks for your comment.
It is always the minority who cause problems but we have to put in place systems to deal with this if we want to live in a civilised and fair society. Unfortunatly there is a cost to this.
It would be cheaper for us all for example if there was no police force – after all only a minoirity of citizens are criminals. But we all agree that it is necessary. Likewise, people’s homes are important.
Yes local authorities have lots of regulations to enforce. The reason they often can’t do this is:
– it is expensive and time consuming
– they don’t have the staff
– it is difficult to get witnesses to co-opearte in a trial months after the event
– the penalties are derisory and not a deterrent for example to millionaire slum landlords
Retaliatory evictions do exist. Again it is the minority but again if we want to live in a civilised society we need to try to do something
I’ll take a look at the RLA proposals when I can. You can see my suggestions here: https://landlordlawblog.co.uk/2012/10/01/housing-law-the-bigger-picture-the-ebook/
Colin Lunt says
June 2, 2013 at 5:00 PMHi Richard
I have passed the RLA papers to the Association of Tenancy Relations Officers Committee who will be interested in the proposals.
There are some particular problems with private renting for families or older people although Council’s have increasingly used private lets for temporary accommodation – and will now be able to discharge a duty to a homelessness application by the offer of a private let. It is fairly unrealistic for a family to put down roots and to regard a private let as a home – rather than somewhere to live, given 6 or 12 month tenancies. It is rare and of course not appropriate for a tenant to put their own identity into a property (furnished or unfurnished) by decorating and buying their own soft furnishings or cultivating the garden, if they have to move a few months later. In addition there are problems with schools for children if a family has to move regularly.
Why would tenants take an unfurnished property and find a year later that they have to move and can only secure a furnished let, and therefore dispose of their goods.
Even if a private tenancy may be granted for longer than 6/12 months it may be sold or otherwise disposed of such that a new owner wants it themselves or to put their own choice of tenant in residence. It at all posible a person is able to get a social letting with security then they will want to move to ensure continuity for their family and a lower long term rent; or a swop if they have to relocate. One reason for the expansion of the private sector has been the sale of council properties and the lack of new build. It is not uncommon for two properties, one a council house and next door a former Right to Buy; the latter now a private let whose rent is double that of the Council property.
Private renting is however suitable for students, young singles and professionals whose need for accommodation is much more flexible than families or older couples. Young people expect to move and do not need to stay in one place for any length of time as their social needs can be more fluid.
In the light of the increased use of the private sector for general needs housing any proposals that will add to improved stable communities is to be welcomed, but is likely to be necessary to utilise more effective use of legislation, to ensure that tenants feel secure in the property and can call the place a home.