Government ‘Regulation of Private Renting’ Report Released

With recent legislative changes appearing punitive to many landlords and with tenants and tenant charities claiming that not enough has been done, it should be welcomed that the report from The Department for Levelling Up, Housing and Communities seems to agree with both.

What the report says

The report, which is extensive, begins with an introduction that is firmly damning of a The Department for Levelling Up, Housing and Communities (referred to as ‘The Department’) and a sector that has been improperly regulated for far too long, leading to confusion, complexity and an inability for local authorities to properly police the legal obligations of landlords in their areas. This is followed by six ‘conclusions and recommendations’:

Conclusions

• It is too difficult for renters to realise their legal right to a safe and secure home.
• Local authorities do not have the capacity and capability to ensure an appropriate level of protection for private renters.
• The Department is not doing enough to support local authorities to regulate effectively.
• Local Authorities are constrained by the Department’s approach to licensing landlords.
• The Department lacks good enough data to understand the nature and extent of problems renters face.
• The Department’s forthcoming White Paper offers an opportunity for significant improvement to the private rented sector.

Recommendations

• Alongside its Treasury Minute response the Department should write to the Committee to set out how it will use its planned reform programme to:
  • Better support renters to understand what their rights are; and
  • Improve renters’ ability to exercise their rights by learning from complaints and redress mechanisms used in other consumer markets.
• The Department should conduct a realistic assessment of the resources needed for local authorities to regulate effectively, with consideration given to the size, types and quality of private rented properties and the demographics of renters. The Department should write to us within the next six months with an update on the outcome of this assessment.
• The Department should take a more proactive approach to supporting local regulators and sharing good practice. To do so, it should learn from other consumer protection systems that provide central intelligence and support to local regulators.
• As part of its planned reforms, the Department should assess whether current arrangements for licensing schemes are working, and whether alternative arrangements may be more efficient and effective.
• The Department should develop a coherent data strategy to identify and collect the data it needs to:
  • understand the problems renters are facing; and
  • evaluate the impact of legislative changes.
• Once complete, this strategy should be shared with this Committee and the Levelling up, Housing and Communities Committee.
• As part of its planned reforms, the Department should ensure it has a full understanding of the cumulative impact of proposed changes on tenants, landlords and the housing market as a whole. In doing this, it should work closely with other departments, including formally where appropriate, to understand how the reforms may affect or be affected by other policy areas such as benefits and tax.

Overall, the bipartisan report reasonably addresses some of the many and varied issues currently faced by both landlords and tenants in the UK. This is nowhere more evident than in the comment:

Due to the Department’s lack of robust data, it does not have a good understanding of the impact of these changes on both landlords and tenants.

The report consistently points out that introduction of legislation has been disjointed and has consistently led to poorly understood and complex regulatory landscapes that change from one area to another both in implementation and enforcement.

While long overdue, this should be a welcome call for the proper collection and analysis of data so that the broader impact of new legislation on tenants, landlords and the housing market will be better understood. Ben Beadle, Chief Executive of the National Residential Landlords Association, released the following statement in response to the report:

What the report means for Wirral tenants and landlords

Despite many positives in the report, the end result is – at this point – simply a call for further reports. However, though things often move slowly in the world of politics, overcoming the inertia to get the ball moving initially is a huge victory.

In the mid-term, though, there is a lot to be positive about as the report makes official observation of the many complaints that landlords and tenants throughout the UK have long made. The advice for regulation and enforcement to model itself on more successful areas such as consumer protection is a comparatively progressive move, while calls for there to be further (or any) consideration of how regulatory and legislative changes can impact both the sector more broadly, as well as other policy areas such as benefits and tax.

One thing (mostly confirmed by a recent job advert) which now appears a virtual certainty, is the landlord register which, as the above report found ‘[an] estimated 13% (589,000) of privately rented homes in England have at least one category 1 hazard—a serious threat to health and safety that landlords are legally obliged to address’, should prove a positive for tenants nationwide.

What happens next is a wait of six months to see what the required government response is to the assessment of local resources required for proper regulation (the one recommendation carrying a time limit) and to see whether the second requested report is allocated to a committee.

These things seldom provide concrete details, but the recommendations here are generally of the kind that both landlords and tenants have both requested for too long.

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