The structure of the British housing sector is changing: soaring house prices, lengthy housing waiting lists and a prolonged slowdown in housebuilding are just some of the factors behind the recent surge in private renting.
Research published in June by Cambridge University indicated that the number of families with children renting their homes had grown by a whopping 86 percent in the last five years and many pundits are predicting that private tenancies will soon overtake social housing as the second largest housing tenure in the UK if such expansion rates continue.
Is the housing sector – and the agencies working alongside it – amply equipped to support this increase? Rachman and his ilk may be long gone but recent exposés illustrating the scandal of vulnerable tenants paying to live in primitive conditions in converted sheds and garages have highlighted the criminal element that constitutes a minority of today’s landlords.
‘Beds in sheds’
The Government has responded to the media attention by creating a dedicated taskforce pledging to tackle the ‘beds in sheds’ problem head on and awarding a small pot of funding to the worst-affected councils to help them flush out those landlords who are happy to exploit tenants.
Shelter’s head of campaigns, Antonia Bance, says the housing charity was “absolutely delighted” to see the Government acknowledging the scandal of beds in sheds. She believes that the growing pressure on the private rented market is creating an environment in which rogue landlords can flourish.
“The high demand for rented homes is an absolutely golden opportunity for the minority of landlords who turn a profit by renting out properties in really miserable conditions,” she says.
Bance would like to see local authorities take tougher action to crack down on those landlords who are providing a substandard service. Research published by Shelter last year indicated that the enforcement action taken by local authorities was highly variable with tough formal action only constituting a “tiny proportion” of overall enforcement activity.
Councils, Bance argues, are reluctant to pursue all the enforcement options open to them. “Councils don’t think [action] will always produce the required effect and sometimes they are very committed to pre-enforcement action,” she explains. “But we think that when there are egregious breaches of the law, councils should not be afraid to take landlords to court and press for stronger penalties.”
Any action should be publicised so that a strong message is sent to other local landlords that shoddy practices will not be tolerated, she adds.
The London Borough of Newham is one local authority that seems willing to adopt a harsh stance against troublesome landlords. The council was rebuked by many in the sector earlier this year for its decision to attempt to alleviate pressure on its rental sector by moving tenants to other parts of the UK. Now it is courting controversy again.
Licensing landlords
Last month, the Mayor backed a decision to roll out a borough-wide property licensing scheme in a bid to encourage landlords to clean up their act.
Although all councils have the power to roll out a selective licensing scheme under the 2004 Housing Act, these have previously been used to target specific wards or geographic areas particularly blighted by poor quality accommodation and anti-social behaviour.
No council has used these powers to roll out a borough-wide scheme, making Newham something of a trailblazer. From next January, all private landlords will have to obtain a five-year license at a cost of £500 (although early applicants will be charged £150).
‘Mere pocket money’
Russell Moffat, private housing team manager at Newham, argues that the penalties facing poor landlords in the borough at the moment are insufficient – “mere pocket money” to those who have crammed their houses with tenants and are collecting as much as £3,000 rent per month for each property, Moffat says.
Many of the multi-tenanted homes in the borough fall under the threshold for HMOs because they are two-storey dwellings and therefore miss out on the licensing regime imposed on HMOs elsewhere. The new scheme will enable Newham to seek fines of up to £20,000 and it also opens up the possibility of taking over the management of properties where licensing requirements have been breached.
Local landlords aren’t happy about the additional red-tape and charges they will now face, but Newham claims the consultation received widespread public backing and Moffat argues that this will be the most effective way to drive up standards among the borough’s stock of 35,000 rented properties. “I don’t think it’s too much to ask of landlords – it’s not a huge amount of money or paperwork. We know a lot of landlords are decent but by allowing us to tackle this rogue element it allows everyone to benefit.”
‘Blanket enforcement inappropriate’
But landlord body, the National Landlords Association (NLA), believes that a blanket approach to enforcement is inappropriate, unfairly penalising the law-abiding majority.
Richard Lambert, NLA chief executive, acknowledges that rogue operators need to be marginalised but argues that a borough-wide approach merely squanders scarce resources and, he adds, is likely to be ignored by the criminal element in any case. “If you adopt a blanket approach then a lot of what you’re doing is checking that somebody who is already doing it right is doing it right. In the current economic climate surely it makes more sense for local authorities to be concentrating on the people that are causing problems?”
Discretionary licensing schemes can work well if delivered on a localised area, but on a broader basis, the NLA believes that accreditation schemes are better placed to help drive up standards in the private rented sector.
There is a genuine need to upskill landlords, Lambert argues, and here local authorities – in conjunction with landlord bodies – could play a role in educating property owners about their responsibilities to tenants.
The Coalition, for its part, has also shied away from taking a blanket approach. The previous administration proposed, among other measures, a national register of landlords following the 2008 Rugg review of the PRS but in 2010 Grant Shapps scrapped these plans, preferring instead to urge councils to use existing powers to tackle rogue landlords and promising landlords that the Coalition wouldn’t burden private sector landlords with more bureaucracy.
A different approach
In Scotland, it’s a different story; all landlords must be registered and meet a fit and proper person test. Introduced in 2006, views are mixed as to whether it’s made a difference on the ground. Sue Shone, policy and practice officer at CIH Scotland, welcomes registration in principle but warns its effect has been limited.
“Landlord registration is a good thing but if you asked a lot of tenants about it they would ask, what’s that? It’s a pretty low baseline [on which landlords are assessed],” she says.
Shone believes that there is a lot of inconsistency between one council and the next in terms of how the scheme operates in practice and the standards required of landlords to register. Officers dealing with registration may sit within a dedicated private rented sector team, others within a legal or environmental health team.
“Where it sits can have an impact. As a consequence you’ll find some councils will be quite robust – they will ask questions from other departments but that’s quite resource-intensive and some councils just don’t have those resources,” she says.
In an attempt to grow and improve the sector in Scotland, a new strategy for the PRS will be published later this year – the consultation has just closed – and Shone hopes this will focus attention on the sector. “I think it is something we need to do. We need to look at what works and what doesn’t and try and tackle it from a strategic point of view rather than being reactive,” she says.
She would like to see a focus on engaging with tenants as well as landlords. Local authorities and other agencies all have a role to play in helping to educate tenants and ensure they can play a part in driving up standards.
“Tenants have a huge role in improving standards but I don’t think they recognise that. A more savvy consumer leads to a better quality service. That’s a big challenge – how do you get the tenant to ask the right questions?”
The structure of the British housing sector is changing: soaring house prices, lengthy housing waiting lists and a prolonged slowdown in housebuilding are just some of the factors behind the recent surge in private renting.
Research published in June by Cambridge University indicated that the number of families with children renting their homes had grown by a whopping 86 percent in the last five years and many pundits are predicting that private tenancies will soon overtake social housing as the second largest housing tenure in the UK if such expansion rates continue.
Is the housing sector – and the agencies working alongside it – amply equipped to support this increase? Rachman and his ilk may be long gone but recent exposés illustrating the scandal of vulnerable tenants paying to live in primitive conditions in converted sheds and garages have highlighted the criminal element that constitutes a minority of today’s landlords.
‘Beds in sheds’
The Government has responded to the media attention by creating a dedicated taskforce pledging to tackle the ‘beds in sheds’ problem head on and awarding a small pot of funding to the worst-affected councils to help them flush out those landlords who are happy to exploit tenants.
Shelter’s head of campaigns, Antonia Bance, says the housing charity was “absolutely delighted” to see the Government acknowledging the scandal of beds in sheds. She believes that the growing pressure on the private rented market is creating an environment in which rogue landlords can flourish.
“The high demand for rented homes is an absolutely golden opportunity for the minority of landlords who turn a profit by renting out properties in really miserable conditions,” she says.
Bance would like to see local authorities take tougher action to crack down on those landlords who are providing a substandard service. Research published by Shelter last year indicated that the enforcement action taken by local authorities was highly variable with tough formal action only constituting a “tiny proportion” of overall enforcement activity.
Councils, Bance argues, are reluctant to pursue all the enforcement options open to them. “Councils don’t think [action] will always produce the required effect and sometimes they are very committed to pre-enforcement action,” she explains. “But we think that when there are egregious breaches of the law, councils should not be afraid to take landlords to court and press for stronger penalties.”
Any action should be publicised so that a strong message is sent to other local landlords that shoddy practices will not be tolerated, she adds.
The London Borough of Newham is one local authority that seems willing to adopt a harsh stance against troublesome landlords. The council was rebuked by many in the sector earlier this year for its decision to attempt to alleviate pressure on its rental sector by moving tenants to other parts of the UK. Now it is courting controversy again.
Licensing landlords
Last month, the Mayor backed a decision to roll out a borough-wide property licensing scheme in a bid to encourage landlords to clean up their act.
Although all councils have the power to roll out a selective licensing scheme under the 2004 Housing Act, these have previously been used to target specific wards or geographic areas particularly blighted by poor quality accommodation and anti-social behaviour.
No council has used these powers to roll out a borough-wide scheme, making Newham something of a trailblazer. From next January, all private landlords will have to obtain a five-year license at a cost of £500 (although early applicants will be charged £150).
‘Mere pocket money’
Russell Moffat, private housing team manager at Newham, argues that the penalties facing poor landlords in the borough at the moment are insufficient – “mere pocket money” to those who have crammed their houses with tenants and are collecting as much as £3,000 rent per month for each property, Moffat says.
Many of the multi-tenanted homes in the borough fall under the threshold for HMOs because they are two-storey dwellings and therefore miss out on the licensing regime imposed on HMOs elsewhere. The new scheme will enable Newham to seek fines of up to £20,000 and it also opens up the possibility of taking over the management of properties where licensing requirements have been breached.
Local landlords aren’t happy about the additional red-tape and charges they will now face, but Newham claims the consultation received widespread public backing and Moffat argues that this will be the most effective way to drive up standards among the borough’s stock of 35,000 rented properties. “I don’t think it’s too much to ask of landlords – it’s not a huge amount of money or paperwork. We know a lot of landlords are decent but by allowing us to tackle this rogue element it allows everyone to benefit.”
‘Blanket enforcement inappropriate’
But landlord body, the National Landlords Association (NLA), believes that a blanket approach to enforcement is inappropriate, unfairly penalising the law-abiding majority.
Richard Lambert, NLA chief executive, acknowledges that rogue operators need to be marginalised but argues that a borough-wide approach merely squanders scarce resources and, he adds, is likely to be ignored by the criminal element in any case. “If you adopt a blanket approach then a lot of what you’re doing is checking that somebody who is already doing it right is doing it right. In the current economic climate surely it makes more sense for local authorities to be concentrating on the people that are causing problems?”
Discretionary licensing schemes can work well if delivered on a localised area, but on a broader basis, the NLA believes that accreditation schemes are better placed to help drive up standards in the private rented sector.
There is a genuine need to upskill landlords, Lambert argues, and here local authorities – in conjunction with landlord bodies – could play a role in educating property owners about their responsibilities to tenants.
The Coalition, for its part, has also shied away from taking a blanket approach. The previous administration proposed, among other measures, a national register of landlords following the 2008 Rugg review of the PRS but in 2010 Grant Shapps scrapped these plans, preferring instead to urge councils to use existing powers to tackle rogue landlords and promising landlords that the Coalition wouldn’t burden private sector landlords with more bureaucracy.
A different approach
In Scotland, it’s a different story; all landlords must be registered and meet a fit and proper person test. Introduced in 2006, views are mixed as to whether it’s made a difference on the ground. Sue Shone, policy and practice officer at CIH Scotland, welcomes registration in principle but warns its effect has been limited.
“Landlord registration is a good thing but if you asked a lot of tenants about it they would ask, what’s that? It’s a pretty low baseline [on which landlords are assessed],” she says.
Shone believes that there is a lot of inconsistency between one council and the next in terms of how the scheme operates in practice and the standards required of landlords to register. Officers dealing with registration may sit within a dedicated private rented sector team, others within a legal or environmental health team.
“Where it sits can have an impact. As a consequence you’ll find some councils will be quite robust – they will ask questions from other departments but that’s quite resource-intensive and some councils just don’t have those resources,” she says.
In an attempt to grow and improve the sector in Scotland, a new strategy for the PRS will be published later this year – the consultation has just closed – and Shone hopes this will focus attention on the sector. “I think it is something we need to do. We need to look at what works and what doesn’t and try and tackle it from a strategic point of view rather than being reactive,” she says.
She would like to see a focus on engaging with tenants as well as landlords. Local authorities and other agencies all have a role to play in helping to educate tenants and ensure they can play a part in driving up standards.
“Tenants have a huge role in improving standards but I don’t think they recognise that. A more savvy consumer leads to a better quality service. That’s a big challenge – how do you get the tenant to ask the right questions?”