Sean Hooker: Is the Private Rented Sector falling short?

Just before the Easter break, yet another report was released on the state of properties in the private rental market in England. This time it was from one of the most prestigious committees in Parliament, the House of Commons, Public Accounts Committee (PAC), and it certainly did not pull its punches.

Holding the private rental sector to account

The committee, one of the oldest standing committees still in existence - first established 165 years ago - holds the government to account, especially when it comes to spending public money.

PAC scrutinises matters referred by the Comptroller and Auditor General who heads the National Audit Office. While it's chaired by a member of the Opposition, it's made up of MPs of all parties and currently has sixteen members: nine Conservative, five Labour, a Lib Dem, and an SNP member.

The report, therefore, will be very influential and has certainly attracted a wide amount of attention from the sector, including statements from Shelter, the National Residential Landlords Association (NRLA), Propertymark and indeed myself.

The unanimity of the responses was once again astonishing, and there was widespread agreement that the report presented a fair and accurate assessment of the market.

The conclusions were hard hitting, highlighting that a significant number of properties are unsafe and unfit to live in and that, in certain parts of the country, enforcement by local authorities was piecemeal and ineffective, leading to a postcode lottery when it came to stamping out the rogues from the sector.

Overall, the government came in for a kicking in so far as the legislative changes they've introduced into the sector without a joined up, coherent strategy.

A walk of shame for landlords?

A lot of landlords will baulk at their portrayal in the report, and many will see this as yet more bashing. This feeds into the media frenzy that despite a resilient defence from those like Paul Shamplina of Landlord Action, fuels paranoia and resentment in what is, for the majority of the industry, a good service.

However, the facts can't be ignored and, to misquote John O’Gaunt in Shakespeare’s Richard II:

“It were a shame to let this land by lease;

But, for thy world enjoying but this land,

Is it not more than shame to shame it so?

Landlord of England art thou now, not king.

Thy state of law is bondslave to the law”

Many are ashamed to admit to being in the game and many are leaving. Change is needed and needed now.

The Three Rs – Redress, Register and Regulation.

Those of you who have followed my previous blogs on Goodlord's Newsagent, will know that I have been banging on about the government’s promised - but as yet undelivered - vision for rental reform. Sorry, not to sound like a broken record, but we are still waiting for the White Paper to be published so we can see what the direction of travel will be.

I put my neck on the line and speculated in last month’s blog that the paper may have arrived before Easter, however, it did not. I lost my bet, and the deliberations of the committee offered hot cross buns more than easter eggs for us to digest.

I was pleased therefore that the MPs were eager to stress the importance of the reforms and anticipate that it would present an opportunity to significantly improve the situation.

So, what did I think about the report?

In my view the report demonstrates that, whilst laws are in place to address the problem, if a landlord ignores their obligations, then they have a good chance of getting away with it.

The best people to deal with this matter are tenants themselves and this is why a mandatory redress process is needed. Tenants need a simple, effective, and free way of raising complaints, with a compulsion on the landlord to put things right and consequences if they do not do so.

This would also act as a de facto register of rental properties and landlords making it harder for the criminals to hide.

Yes, it also needs more resources for enforcement. However, this will make it easier for the authorities to target the worst offenders providing an intelligence-led and focused approach to stamping out unfit properties.

Redress can also act to educate and assist landlords to comply without the heavy stick of prosecutions and fines. A lot of the problems are down to mistakes and ignorance and a complaint resolution service can help landlords learn from the outcomes.

The Property Redress Scheme has been working with the NRLA to set up a redress pilot, that has already had a significant take up by landlords on a voluntary basis. We are determined to prove the concept works and has benefits for all parties in the sector.

A landlord's licence to let

Much attention in the report was given to the various licensing schemes up and down the country and there was a lot of evidence provided that the process was ad hoc, that the government was inconsistent in the schemes it granted, and that delays in renewing schemes have constrained local authorities’ powers to deal with persistent problems.

Few, if any, landlords and agents have been banned under the legislation and many landlords remain bewildered by the whole regime.

The government has therefore committed to looking at introducing a landlord register and strongly indicated that this would go beyond just introducing redress and could be akin to Rent Smart Wales or similar.

At the present they are still at the “exploring” stage, which is why I am pressing for redress as the priority.

May the enforcement be with you

The recommendations in the report were quite scathing when it comes to the data and information available on the enforcement by local authorities. The government also hasn't got realistic data to evaluate and assess the need for resourcing councils to carry out their work.

The committee has put the Department for Levelling Up, Housing and Communities on “report” and told them to write back in six months with an update on a study into the state of play on enforcement in England.

Now with three hundred and thirty-three local authorities in England, this is going to be a tall order to equate, especially as the information will need to take into account the size, types and quality of private rented properties and the demographics of renters.

They would be wise to talk to the NRLA who have done their own work on this and published reports.

I have been very vocal about the need for a robust regime policing the sector and whilst I agree that a full and comprehensive strategy is needed, we can't wait forever for the evidence to be gathered before we take the action needed.

There is good and reliable data out there that can be used to get the ball rolling now. It may not be perfect but, with the additional information a register could bring, it will mean the understanding of the sector will become increasingly more sophisticated, leading to more targeted and effective action.

Agents are key

I am also determined to continue to push for the regulation of property agents.

While redress for letting agents has been effective in identifying the shortcomings and gaps in the standards of properties, an educated and accountable agent sector that abides by a set of rules and regulations is needed.

Landlords who experience the poor quality of some agents go it alone and this is often when mistakes and non-compliance with the law occurs. If property standards are to improve, a professional agency sector will be an essential part of the equation.

This, with landlord redress and a register of rental properties, that must be inspected and are safe, fit for habitation and energy-efficient, would provide a robust regime for a first-class rental sector.

We await with anticipation the announcement of the new reforms and hope they bring a coherent and workable strategy to tackle this problem once and for all.

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