Communities and Local Government CommitteeWritten evidence submitted by the District Councils’ Network

The District Councils’ Network welcomes the opportunity to respond to the Select Committee Inquiry into private rented housing. Whilst the private rented offer varies from district to district, the principles of providing good quality and well managed accommodation are the same across all areas. District councils consider private rented sector housing to be a key contributor to a balanced housing market, and can support economic growth.

The headlines from the 2011 Census, shows that the number of private renters in England and Wales has increased by 88% from 1.9 million in 2001 to 3.6 million in 2011.

A recent study by the districts in Cumbria identifies that the size of the private rented sector is 13% of all residential dwellings. Although below the national average, it has increased from just over 11% at the time of the 2001 Census. Even more striking is the increase in the size of this sector for Carlisle (15%) and Copeland (16%) compared to more than ten years ago (11% and 9% consecutively).

The reasons for this growth are lack of ability for first time buyers to secure a deposit, and limited number of affordable housing through new supply. Districts would like to see more initiatives to support the development of high quality private rented accommodation on longer tenancies or leases, but also to tackle the problematic properties, the novice landlords encouraged by the buy-to-let boom and the rogue landlords who provide poor quality properties for vulnerable people.

Many areas are considering the links between housing and health through the Health and Wellbeing strategies, as tenants of private rented accommodation are more likely to be at risk from mental health issues associated with overcrowding, harassment by landlords and disrepair issues. There are identified inequalities for many living in the private rented sector such as children living in poverty.

1. The quality of private rented housing, and steps that can be taken to ensure that all housing in the sector is of an acceptable standard

1.1 The issues of poor quality private rented sector housing are well documented and summarised in the Houses of Parliament document “Housing and Health”, January 2011. This report highlights that whilst the Decent Homes Standard was extended to the private rented sector in 2002 and made optional in 2007, slow progress was made by authorities in improving the private rented stock.

1.2 Examples in this section refer to recent evidence gathered by the six districts in Cumbria through a recent stock condition survey. Cumbria is an area which represents a wide range of housing issues, from extreme pressures of affordability in the Lake District National Park, to the low demand and poor quality areas of the west coast. It is considered that this provides a snapshot of the issues facing districts in dealing with both landlords and tenants.

1.3 In Cumbria, non decency in the private rented sector is 41.2% a rate that is just above the overall average of 40.8%. Data from the Eden District Council Stock Condition Survey shows that 47% of private rented stock does not meet the decent homes criteria and 30% has Category 1 Hazards.

1.4 The highest rates of non-decency were found in converted flats and low rise purpose built flats. Converted flats tend to be associated with the oldest stock and privately rented dwellings, both factors associated with non-decency.

1.5 Non decency rates are higher in the privately rented sector for all household types. The biggest disparity between the privately rented and owner occupied sector is for multi person households where 62% are non decent followed by one person households where 48% are non decent.

1.6 The main hazard is excess cold in Cumbria due to the high proportion of hard-to-treat older dwellings which are 64% of all Category 1 Hazard failures.

1.7 It was estimated that to remediate the cost of Category 1 Hazards in Cumbria would cost approximately £18 million.

1.8 The demographic data shows that people living with Category 1 Hazards are most likely to be those under 25 and with a household income of less than £10 000.

1.9 Whilst the majority of landlords are responsive to requests for repairs, local authorities may look to enforcement as a last resort. The reduction in capacity in private sector housing teams, and the costs of taking forward legal action often prohibits a council from dealing with disrepair in this way. If Eden District Council dealt with all Category 1 Hazards through enforcement then this would amount to 1240 legal cases.

1.10 The recently announced guarantees for private investors to deliver private rented properties are welcomed. A new high quality offer would support economic mobility and regeneration, however the scale of the development required to attract private investment is not always deliverable in a district areas. The involvement of LEP’s in co-ordinating investment could support schemes over a wider area and could work within the HCA Local Investment Areas.

1.11 Empty property initiatives could bring about a significant number of new affordable properties and deliver economic regeneration. The district councils are encouraged by the latest bidding round for empty property funding through the HCA, which allows the improvement of commercial and residential properties. These could be managed by Registered Providers and may help the recovery of many declining town centres.

2. Levels of rent within the private rented sector—including the possibility of rent control and the interaction between housing benefit and rents

2.1 Rents are set by local supply and demand and create the opportunity of landlords to be selective in choosing tenants in areas of high demand. This has caused a gap in the market for those claiming benefit but not eligible for social housing and has led to evidence of hidden homelessness.

2.2 There has been an increase in homelessness of 26% in the past three years and a large increase in those placed in bed and breakfast and other temporary accommodation.

2.3 Local housing allowance for private tenants could lead to an increase in overcrowding and moves to cheaper poorer quality rented accommodation.

2.4 Registered Providers have kept their tenants informed of changes to the welfare reforms and the implications for them, however, very little information has been provided to private rented tenants and a coordinated campaign could help support private tenants.

2.5 Population movements are expected when the changes are introduced to cheaper and more accessible areas, but many council areas do not have the flexibility of the stock to allow these movements to take place. Areas of high demand will not be able to accommodate those wishing to downsize and there is an added pressure of rising fuel costs which is forcing households to move from rural areas to more urban areas.

3. Regulation of landlords, and steps that can be taken to deal with rogue landlords

3.1 The DCN welcomes the Government guidance on “Dealing with Rogue landlords” August 2012. In district councils there is evidence to identify rogue landlords through complaints directly to the council or through multi-agency working with the police, fire authorities etc. These landlords often hold large portfolios of property and target the most vulnerable tenants. Again, capacity of the district council to take legal action is often limited and may result in the tenants moving to other unsuitable accommodation or presenting as homeless.

3.2 Tenants may be reluctant to complain to the council about conditions as they are afraid that they may be evicted. There is also evidence that if the landlord is required to carry out repairs, they recoup the costs by increasing the rent and there is currently no protection for the tenants.

4. Regulation of letting agents, including agents’ fees and charges

4.1 The district councils would welcome the regulation of letting agents. This could be achieved through accreditation schemes by local authorities and would ensure that they have sufficient information to advise on tenancy issues, illegal evictions, disrepair issues etc.

5. The regulation of houses in multiple occupation (HMOs), including the operation of discretionary licensing schemes imposed by a local authority for a category of HMO in its area

5.1 The number of districts are introducing selective licensing is increasing, however there is less emphasis on the value of voluntary accreditation schemes as they tend to attract landlords who are already maintaining a good standard of accommodation and management.

5.2 In many areas districts have worked together to ensure consistency in HMO licensing charges and conditions, however, many local authorities have not been proactive in identifying all HMO’s which require licensing due to capacity issues.

5.3 The shift towards a growth in the private rented sector needs to be tracked. This could be done in a similar way to the registration of food businesses that councils administer and manage. This would lead to better knowledge about the balance of housing tenures and identify potential hotspots. It would also allow for an improvement in communication with landlords and to encourage them to work alongside Choice Based Lettings, housing options teams etc.

6. Tenancy agreements and length and security of tenure

6.1 The DCN would encourage the opportunity for longer and therefore more secure tenancies. Families with children at local schools or people with local support networks are reluctant to move into private sector accommodation due to the possibility of the tenancy ending after 6 months. Private sector leasing arrangements on new build properties could offer a more sustainable solution particularly where the area wishes to encourage a more flexible workforce and attract younger people to an area.

6.2 Ending of private sector tenancies is one of the main reasons for households making a homelessness application.

6.3 In many circumstances the introduction of longer term tenancies would be beneficial to district councils which are facing increasing budgetary pressures from the cost of disabled facilities and adaptations. Those living in the private rented sector have the same access to this funding but do not have the repayment obligation through the land charge mechanism which is imposed for owner occupiers. There is no guarantee that the disabled tenant can remain in the property beyond their short tenancy agreement. There are examples where disabled tenants have moved 3 times and have required each property to be adapted. District councils would like to see an extended tenancy agreement before approving the adaptations.

7. How local authorities are discharging their homelessness duty by being able to place homeless households in private sector housing

7.1 The DCN supports the safeguards which have been put in place to ensure that private rented accommodation is suitable for homeless households, however it is felt that this should be extended to the properties of all housing benefit claimants. This would ensure that public money is not being spent on poor accommodation and unscrupulous landlords. This would raise the standard of accommodation but also the onus would be on the landlord to produce safety records, tenancy agreements and good management practice rather than the local authority having to proactively inspect properties and would take some of the pressure off the under resourced private sector teams.

7.2 Information sharing between housing benefit databases and housing is not permitted however, it would be extremely valuable if this was available.

January 2013

Prepared 16th July 2013