The Government's Decent Homes Standard has been rated 'not fit for purpose': here's what that means for landlords

The Government's Decent Homes Standard has run into a significant obstacle, and it's one the Private Rented Sector (PRS) shouldn't ignore.

On 18 February 2026, the Regulatory Policy Committee (RPC), the independent body responsible for scrutinising the government's impact assessments, issued a formal 'red' rating for the evidence underpinning the proposed Decent Homes Standard. In the language of regulatory oversight, a red rating doesn't mean the policy is dead or delayed; it means the economic case for it, as currently set out, is 'not fit for purpose'.

To be clear: this isn't a judgment on the goal of improving housing standards. It's a judgment on the quality of the analysis used to justify how that goal should be achieved. Still it is significant and this lack of endorsement from the RPC reveals a policy in need of reassessment.

• Why did the RPC issue a red notice against the Decent Homes Standard?

• Why the RPC's rating matters
• What does the RPC's red rating mean for landlords?
• Goodlord's policy: Better homes, smarter policy
• Our four testsfor good regulation
• What happens next?

Why did the RPC issue a red notice against the Decent Homes Standard?

The RPC's objections can be summarised as follows:

• Evidential failings: The Government's impact assessment failed to adequately compare the preferred policy option against realistic alternatives, particularly when it came to extending the Decent Homes Standard (DHS) to the Private Rented Sector (PRS).
• The numbers don’t add up: The RPC has also concluded that approximately 82% of the costs associated with the Decent Homes Standard are already being incurred under existing regulations. Yet the government’s impact assessment appears to claim the benefits of those same upgrades again under this new policy framework. That's a basic requirement for sound regulatory design.
• Failure to justify the approach: The assessment didn't demonstrate that the preferred option outperforms alternatives on cost-effectiveness or risk. The proposal aims to establish a common, updated standard across both the social and private rented sectors, with full compliance expected by 2035. Under the new definition, an estimated 48% of private rented dwellings and 45% of social rented homes would currently fail to meet the standard, with most failing due to disrepair. That's a massive and costly transformation, one that landlords, agents, and tenants would all feel keenly when landlords are already investing heavily under the Renters’ Rights Act

Why the RPC’s rating matters

Red ratings from the RPC are not routine. They signal a meaningful gap between the policy ambition and the evidence behind it, and they carry weight. The Ministry of Housing, Communities and Local Government (MHCLG) may decide to go back, revisit its impact analysis, and address the issues raised by the RPC.

This matters beyond process. At a time when landlords are already navigating a raft of new requirements, from the Renters' Rights Act to energy efficiency targets, any new regulation needs to be justified with rigour and precision. The red rating is a signal that those standards haven't been met as yet.

What does the RPC’s red rating mean for landlords?

In practical terms, a red rating could slow down the policy's progress, although Ministers are not strictly required to adapt the policy due to the rating. The MHCLG can push ahead although it is more likely an opportunity to address the RPC's concerns and resubmit an impact assessment that properly holds up to scrutiny.

For landlords, that's neither a green light nor a reason to relax. It doesn't mean the standard is going away. The direction of travel, towards higher, unified standards across the social and private rented sectors remains government policy. What the red rating challenges is the justification for how those standards are being designed and costed, not the ambition itself.

Landlords have a window to understand what the standard would require, to assess where their properties currently stand, and to engage with the consultation process before the policy is finalised. If nearly half of private rented homes are expected to fall short of the new definition, the investment implications are significant, and the sooner landlords understand their exposure, the better placed they'll be to plan.

If the revised impact assessment comes back with robust evidence that the Decent Homes Standard delivers genuine value beyond existing regulation, landlords will need to take it seriously. If it doesn't, the red rating will remain.

Either way, this isn't the moment to switch off. It's the moment to pay close attention.

Goodlord's position: Better homes, smarter policy

Goodlord believes in better housing standards.

We, like many, want better housing in the PRS. Safe, warm, energy-efficient homes are good for tenants, good for landlords, and good for the broader rental market.

We oppose duplication, unnecessary cost layering, and additional legislative changes without the fullest scrutiny and highest standards of justification.

We want a regulatory system that works for everyone. But, if 82% of the costs identified in the impact assessment are already being delivered through existing regulations, then the incremental benefit of the new standard must be clearly demonstrated. Right now, the RPC is telling us that the DHS doesn't do that.

Our four tests for good regulation

When we look at any new regulatory proposal affecting the PRS, we apply four tests. We think these are reasonable, and the Decent Homes Standard currently fails at least two of them.

1. Is it evidence-based?

Good regulation starts with good evidence. That means honest, transparent analysis of the problem being solved, the options available, and the costs and benefits of each. The RPC's red rating is a direct challenge to whether that threshold has been met here.

2. Does it avoid unnecessary duplication?

Landlords are already investing to meet energy efficiency requirements, safety regulations, and licensing obligations. If the Decent Homes Standard is counting the same improvements twice, repackaging existing compliance as a new regulatory benefit, that creates real problems. It undermines investment confidence, adds pressure on rents, and slows supply growth without delivering genuine additional value.

3. Are the costs proportionate?

With nearly half of private rented homes potentially falling outside the new standard, the cost implications are enormous. Those costs land on landlords, and inevitably, filter through to tenants and the wider market. Proportionality isn't just a financial consideration; it's a question of whether the market can absorb change without damaging the very people the policy aims to protect.

4. Does it deliver genuine additional benefit?

This is the central question that the impact assessment failed to answer convincingly. If landlords are already investing heavily to meet existing requirements, what does the Decent Homes Standard genuinely add? That case needs to be made clearly, and it hasn't been yet.

What happens next?

The MHCLG can now choose if it addresses the RPC's concerns before the policy moves forward.

Our hope is that this becomes a moment for genuine recalibration. Not a watering down of ambition, but a sharpening of it. The rental sector needs regulation that is bold, proportionate, and built on a foundation that landlords, agents, and tenants can trust.

Improving homes is the goal. Evidence-based policy is how you get there. Right now, those two things need to come back into alignment, and we'll be watching closely as they do.

If you have questions about how the Decent Homes Standard could affect your portfolio or your business, get in touch. We're here to help you navigate what comes next.