Planned reforms to the private rented sector will be dead on arrival unless the government acts to address a chronic failure to tackle rogue and criminal landlords.
The reforms, to be published in a white paper this autumn, will seek to change the rights and processes that allow landlords to repossess their properties, including ending Section 21 ‘no explanation’ repossessions. They will also introduce a redress scheme, reform the way courts handle possession cases and develop lifetime deposits for tenants. Together, they amount to the most radical changes to the sector for over 30 years.
In its own proposals published today, the National Residential Landlords Association is highlighting the need for proper enforcement to underpin these reforms and to protect all in the sector from criminal landlords.
In 2018 the government launched its database of rogue landlords for England. Despite telling MPs previously that there may be around 10,500 rogue landlords in operation, earlier this year ministers said there were just 43 listed on the database.
Since 2017, councils have been able to issue civil penalties of up to £30,000 against rogue landlords, which, importantly, can be reinvested in further enforcement activity. Our research has found that fewer than half of the councils in England (47 per cent) have issued any such penalties. Just 7 per cent of local authorities are responsible for 71 per cent of the civil penalties issued.
The consequences of this enforcement deficit is that it not just fails to protect tenants from the misery of criminal landlords, it undermines the reputation of the majority of landlords who are responsible and do the right thing.
This is not about councils not having the tools to address this problem. The number of statutory provisions applying to the sector has risen by 40 per cent over the past decade. As a result, landlords must now comply with 168 pieces of legislation in total.
What councils need are the upfront funds from the central government to kick-start the level of enforcement required. This would help to rectify what Unchecked UK has calculated has been a fall of a third in the amount spent by local authorities in England on environmental protection and regulatory services between 2009 and 2019.
We concur also with the views of the Housing, Communities and Local Government Select Committee, which in 2018 warned that councils must make enforcement an urgent priority
Aside from enforcement, the test for the government’s plans will be, do they work for both tenants and responsible landlords?
With the demand for rental housing outstripping supply, we need a package that ensures landlords have the confidence to provide the homes we need. Likewise, it is crucial that tenants are given the confidence and rights to hold those who provide sub-standard accommodation to account.
That means that as the government ends Section 21 repossessions, it needs to be replaced by a system that provides clear and comprehensive grounds upon which landlords can legitimately repossess properties. This needs to be balanced with robust protections for tenants, not least ensuring they can better use the powers they already have to challenge unfair rent increases.
Where possession cases are disputed, we need a system that better supports landlords and tenants to reach agreement without the need to go to court. That is why we are calling for a new landlord/tenant dispute body, similar to the employment organisation Acas. Crucially this would have teeth, which current mediation schemes do not.
Under our proposals, if a tenant failed to properly engage with such a body or did not abide by whatever was agreed, the case should then be fast-tracked through the courts. Likewise, if the landlord failed to do so the courts could ensure the case was not prioritised.
Where cases do end up in court, they need to be dealt with much more efficiently. The fact that it can take around a year for legitimate repossession claims to reach a conclusion leaves landlords in limbo.
Much greater use should be made of video technology for cases to be heard by the courts, ensuring we do not have to rely on slow, face-to-face proceedings.
Importantly, ensuring tenants can access legal advice and support much earlier in the process should become more of a priority in this area.
Ministers have also committed to developing lifetime deposits for renters. This proposal seeks to ensure that, when moving to a new rental property, tenants do not need to raise fresh sums of money for a deposit before getting back what they paid on their previous accommodation.
Making it easier for tenants to move in this way is clearly a good thing. But it is vital that landlords remain protected from damage that might have been caused to a property. To achieve this balance, we propose a couple of potential models, either a new deposit Isa for renters or a financial facility to help tenants bridge the transition from one tenancy to another could be workable solutions.
For far too long, debate around the private rented sector has been polarised, with false impressions being given that tenants are largely being exploited by rogue and criminal landlords.
It is true that there are landlords who should not be operating in the sector and that is why we want enforcement against them to be improved. But the reality is that in the majority of cases landlords and tenants enjoy a good relationship, and according to the English Housing Survey, 83 per cent of private tenants are satisfied with their accommodation.
It is upon this that the planned reforms need to build.
Ben Beadle is chief executive of the National Residential Landlords Association. @NRLAssociation
The NRLA has published a White Paper today called A New Deal for the Private Rented Sector which can be downloaded here.
