9.In this chapter, we explore whether conditions in private rented accommodation have improved over the last decade. We also consider whether tenants have the power, both in theory and practice, to challenge their landlords when there are problems with their homes. When launching the inquiry, we were particularly concerned by reports of the growth of so-called ‘lockdown properties’ in London, and reflect on what could be done to address this problem.
10.Government statistics suggest that standards have improved in the private rented sector over the last 10 years. This was the certainly the message from the Minister for Housing and Homelessness, Mrs Heather Wheeler MP, who told us that the proportion of private rented homes that failed to meet the Decent Homes Standard reduced from 47% in 2006 to 27% in 2016, with year-on-year improvements each year until 2014, since when, conditions have remained steady. Several witnesses also highlighted statistics that showed 82% of private tenants were satisfied with their quality of their homes. Dr Julie Rugg told us, “It is important to note that some parts of the market are working [ … ] If we understand which bits of it are working and why they are working, then we can think about how we can replicate those characteristics across other parts of the market”.
11.However, these headline statistics do not tell the full story. Shelter and Citizens Advice told us that tenant satisfaction surveys can be unhelpful. Private renters tended to have very low expectations, whilst other surveys showed they were the least happy with their homes compared with other forms of tenure. Furthermore, both tenants’ and landlords’ representatives told us there was a growing problem at the lower end of the market. David Smith, from the Residential Landlords Association (RLA), said, “there are a number of properties that are good, and that is an increasing number, but the properties that are bad are very bad, and increasingly worse”. Kate Webb, from Shelter, highlighted that, while it is certainly true that there has been a decline in the overall proportion of poor quality accommodation, the growth in the sector over the past 10 years meant that the absolute number of non-decent homes—that is, those that do not meet the Government’s statutory minimum standards—had actually increased. The English Housing Survey tells us there were 1.30 million non-decent private rented homes in 2016, up from 1.22 million in 2006. We heard that much of this was associated with the age of the housing stock in the private rented sector, where 34% of properties were built before 1919.
12.The Mayor of Newham, Sir Robin Wales, described the “shocking, shocking conditions in the 21st Century” that his borough frequently encountered in the private rented sector. But it is not the case that poor standards are confined to London. Government statistics showed that, in 2016, there were approximately 800,000 private rented homes in England with at least one Category One hazard, as identified by the HHSRS. Such data are reinforced by surveys carried out by Shelter, who told us that 53% of tenants had experienced at least one problem with conditions or repair in the last year, including extremely serious incidents, including electrical hazards (15%) and gas leaks (6%). They told us that many homes in the private rented sector severely compromised families’ health and wellbeing and, in the most extreme cases, put lives at risk. This was supported by the Chartered Institute for Environment Health, who highlighted a report by the Building Research Establishment which claimed that poor quality housing led to health problems that cost the NHS £1.4 billion, and wider society £18 billion, each year.
13.Through our Online Forum, we heard directly from private renters about the poor conditions they had suffered. One submission stated that:
We live in a house full of mould and damp with four young children. Even though we both work full time, we can just not afford agents fees to move out. We have damp and mould in four rooms, faulty electrics and water comes through the living room window when it rains [ … ] The damp in one bedroom is [ … ] spreading and the whole family keeps getting ill from it.
14.We heard numerous other examples of poor conditions in the sector through our Forum. One tenant told us about the “severe black mould and damp, leaking plumbing, tiles falling off the wall, heaters broken, no insulation, faulty wiring” in her property. Another reported problems including, “[a] hole in [the] external wall straight into the kitchen, no heat insulation / real heating, and [ … ] when we flushed the toilet, the waste would flood the shower floor”. The Government’s own statistics suggest that there are likely to be hundreds of thousands of very similar stories across the country.
15.Dr Julie Rugg told us that these conditions were disproportionately affecting some groups more than others. She said that those most likely to be affected were single-person households, people over the age of 55 and people in receipt of housing benefit. We heard that it was especially difficult for people on housing benefit to move home when they were dissatisfied with their conditions, as the Local Housing Allowance restricted people to the bottom end of the market and fewer than one in five landlords were willing to let to tenants on housing benefit. Worryingly, Citizens Advice told us that families with children were increasingly reporting problems with their homes.
16.Statistics show that most housing in the private rented sector is of an adequate standard and tenants are broadly satisfied with their homes. However, there continues to be a significant minority of private rented accommodation that is shockingly inadequate. While the proportion of inadequate properties has fallen by almost half over the last 10 years, the absolute number has risen, with 80,000 more non-decent private rented homes than in 2006. Further, we heard that 27% of private rented homes failed to meet the Decent Homes Standard in 2016, the highest proportion of any tenure and more than double the rate found in the social rented sector. With poor conditions likely to disproportionately affect the most vulnerable, including families with children, the Government should not be complacent about improving standards in the sector.
17.The aim of our inquiry has been to seek evidence on the ability of local authorities to deal with ‘rogue’ landlords, in support of tenants, with a particular focus on the lower end of the market. While we are aware that there are, of course, examples of landlords who have needed to deal with difficult tenants, this chapter focuses specifically on the concerns we have heard from tenants who have had bad experiences in the sector, and makes recommendations accordingly.
18.The Government has defined ‘rogue’ landlords as those who “knowingly flout the rules and shirk their responsibilities, renting out unsafe accommodation, predominantly to vulnerable people at the lower end of the market”. However, many witnesses believed that it was not right to define the private rented sector as being divided between a very small number of ‘rogue’ landlords and an otherwise well-functioning market. Kate Webb highlighted that there were “a lot of shades of grey in between”. Dr Rugg told us that, while there were criminals actively engaging in letting properties, a large number of bad landlords were simply “woefully inadequate and ignorant” amateurs. The District Council Network referred to the majority of bad landlords “who lack effective management competencies and a good awareness of their responsibilities as landlords”, highlighting that true criminals represented only a very small number of cases dealt with by councils.
19.We heard numerous examples of landlords failing to fulfil their obligations to tenants. In a report published in July 2017, Citizens Advice found that 41% of tenants had waited an unreasonably long time—based on national accreditation timescales—for repairs that their landlord was legally required to undertake. We heard similar evidence through our Forum, where private renters told us about their experiences with landlords who were slow to respond to reasonable requests for repairs. For example, one submission said:
Last November, the radiator in our daughter’s bedroom broke down and it took three weeks of chasing before the landlord arranged for someone to come and fix it [ … ] It was nearly a month, in the end, before it was finally fixed. I had informed him that the lack of a working radiator was exacerbating the black mould in her room, but even this information didn’t seem to make our landlord get on with sorting it out.
Many witnesses suggested that this was representative of a fundamental imbalance of power between tenants and landlords, particularly at the lower end of the market.
20.However, there were also witnesses who disagreed that there was a power imbalance in the sector, including David Cox, from ARLA Propertymark, who told us that “the balance is about right between landlord rights and tenant rights”.
21.We heard that, for many tenants, the existence of a power imbalance and fear of landlord retaliation made them reluctant to pursue complaints about repairs and maintenance in their homes. Mette Isaksen told us that, according to research undertaken by Citizens Advice, the main reason why tenants were reluctant to complain was due to a fear of eviction, closely followed by a fear that the landlord would increase the rent in retaliation. They reported that 44% of tenants said a fear of eviction would stop them from negotiating with their landlord over disrepair. While it was difficult to provide conclusive evidence on the numbers of people who had been evicted in retaliation for raising a complaint, research into consumer perceptions found that 14% of tenants felt they had been penalised for complaining.
22.This was supported by Dan Wilson Craw, from Generation Rent, who told us that some landlords “intimidate their tenants into not reporting problems, knowing that they can get other as-desperate tenants in, if the tenant leaves”. The evidence we received suggested that fears of harassment were not unfounded. The Association of Tenancy Relations Officers (ATRO) highlighted a survey by YouGov and Shelter that found: over 64,000 renters reported that a landlord had cut off their utilities without their consent; almost 50,000 said their belongings had been thrown out of their home and the locks changed; over 600,000 renters had their home entered by a landlord without permission or notice being given; and over 200,000 reported having been abused, threatened or harassed by a landlord.
23.Such is the level of concern around retaliatory eviction, rent increases and harassment, both Shelter and Citizens Advice told us that they often reminded tenants about the risks of raising a complaint. Kate Webb said:
[ … ] we have to be very clear with people that [ … ] making a complaint doesn’t necessarily mean that their situation will get resolved. It might just mean they are making a homeless application in three months’ time [ … ] We don’t tell people that it is best not to complain [ … ] but it would be deeply irresponsible not to tell people that their landlord has the option to evict them.
24.The Government has acknowledged that some tenants may be uncertain about reporting issues to their landlord or agent out of fear of eviction or intimidation, and has described this practice as “unacceptable”. In oral evidence, the Minister told us that the power imbalance in the sector was “one of our concerns”, and that “we are committed to rebalancing the relationship between tenants and landlords”.
25.There is a clear power imbalance in the private rented sector, with tenants often unwilling to complain to landlords about the conditions in their homes for fear of retaliation. In our view, consumer rights are meaningless without the guarantee that tenants will be able to use them in practice without fear of retaliation. Tenants need further protection from retaliatory eviction and rent increases, and other forms of harassment, so that they are fully empowered to pursue complaints about repairs and maintenance in their homes when they need to.
26.The Government highlighted to us that it had recently legislated via the Deregulation Act 2015 to protect tenants from retaliatory eviction when they report a Category One or Two hazard to their local authority. If the local authority serves an improvement notice or a notice of emergency remedial action, a landlord cannot evict the tenant for six months using the ‘no-fault’, Section 21 eviction process. The Minister described the powers within the Act as “incredibly important for giving protection to tenants on retaliatory eviction”. During public evidence, the Government committed to undertaking a review of the effectiveness of the retaliatory eviction provisions in the Act, including the extent to which these powers have actually been used in practice.
27.ATRO told us that the Act was “certainly a step in the right direction”, while London Councils described the “positive changes” brought about by the legislation. However, both highlighted ongoing concerns with the Act. ATRO told us that, “section 33 of the Act leaves the legislation significantly flawed, and potentially gives tenants a false sense of security.” They said there were several scenarios in which the tenant could be left without protection, including where they approach the local authority without putting a complaint in writing to the landlord, or where no relevant notice is served by the local authority at all—often because the landlord does the work after contact from the local authority, but before the service of the relevant notice. London Councils noted that, where tenants are protected from retaliatory eviction through the Act, “six months is still a relatively short length of time for a household seeking security and stability.”
28.We recommend that the Government seek to rebalance the tenant-landlord relationship by providing additional protections from retaliatory eviction and rent increases. The Government should conduct a review of how the protections within the Deregulation Act 2015 are being used in practice and whether they need to be enhanced. We believe the Act should be strengthened to protect tenants from a no-fault Section 21 eviction for longer than the current six-month period. Protections should also be extended to prohibit retaliatory rent increases for a period after making a complaint. We heard concerns that there were several scenarios where tenants might be left without protection under the Act; the Government should ensure tenants are fully protected as soon as they make a complaint to their landlord, letting agent or local authority, not from the point an improvement notice is issued.
29.The Government told us about the additional measures it would bring forward to “rebalance the relationship between tenants and landlords and ensure tenants have access to effective redress”. This ambition was reiterated by the Minister during the public evidence session, when she said:
We do recognise that more needs to be done to protect tenants, and we are committed to improving the redress for people who experience problems with their housing and to empower them to challenge poor practice.
30.The Government announced that it would make it mandatory for every landlord to be part of an Ombudsman scheme, with the intention that it would be easier for tenants to access dispute resolution over complaints relating to repairs and maintenance. It has yet to be determined whether landlords will need to join the redress scheme if they let their property through an agent. Alongside this, the Government also launched a consultation into proposals to introduce a single Housing Ombudsman, to replace the three redress schemes currently in operation and to close the gaps in protection that currently exist for many private renters.
31.Mette Isaksen from Citizens Advice told us she was pleased the Government was planning to introduce a mandatory ombudsman for landlords, and said that a non-court-based route to resolve disputes “can be a really positive thing for tenants”. However, she reiterated the concerns around retaliatory eviction, and urged the Government to ensure additional protections would be introduced for tenants. London Councils told us they were also in favour of the new ways tenants would be able to make complaints without going to court.
32.Landlords’ representatives had a mixed response to the Government’s proposals for an ombudsman scheme. David Smith-Milne told us that his business, Placefirst, supported the Government’s plans, and “as a responsible landlord” would welcome an ombudsman scheme. Adrian Jeakings told us that the National Landlords Association (NLA) also supported the Government’s ombudsman proposals, but were wary of the potential costs to landlords. However, David Smith from the RLA told us he did not think an ombudsman scheme would be effective, and argued that tenants and landlords had a very different relationship to consumers in other industries. He said that an ombudsman would only be able to award compensation, and that a specialist housing court would be a more effective mechanism for tenants seeking to resolve disputes concerning repairs and maintenance.
33.Indeed, the Government has announced that it is considering introducing a new specialist housing court, telling us its intention was to improve existing court processes and expertise “to achieve quicker and cheaper resolution of disputes”. The Minister noted that the Government is currently consulting with the judiciary on these proposals. While further details have yet to be published, it is apparent that this proposal could have particular relevance in the context of the Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill—which we consider in more detail in the next Chapter—and the Draft Tenant Fees Bill. Both Bills give new powers to tenants to take landlords to court directly and, once implemented, a specialist housing court could provide a cheaper and simpler route for tenants to seek redress.
34.Furthermore, in October and November 2017, the Government issued a public consultation on proposals to require all letting agents to be regulated in order to practice. The Government told us that, currently, anyone could operate as a letting agent without any qualifications or professional oversight. Regulation of the industry would require letting agents to satisfy minimum training requirements and comply with an industry code of conduct. Isobel Thomson, from the National Approved Letting Scheme (NALS), stated that she wanted to see an independent regulator, with approved bodies sitting under it and responsible for accreditation criteria. David Cox agreed, urging a similar model to that used to regulate the legal profession; however, he warned against the creation of a massive bureaucracy, citing Rent Smart Wales—founded in 2015—as an example of poor regulation in the sector, reflecting on the limited enforcement activity it undertakes.
35.We agree with the Government that a specialist housing court would provide a more accessible route to redress for tenants, and we see relevance for it in the context of the Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill and the Draft Tenant Fees Bill. We urge the Government to issue more detailed proposals as soon as possible.
36.We also support the Government’s proposals to make it mandatory for landlords to join a redress scheme, as well as its proposals for a single Housing Ombudsman. We recommend that the Ombudsman be given sufficient powers and resources to provide tenants with the support they need when challenging inadequate standards in their homes, and to require the payment of compensation to tenants when appropriate. However, new routes of redress will need to guard against the potential for retaliatory action from unscrupulous landlords, which we have highlighted above.
37.A further barrier to tenants pursuing complaints against their landlords is that many are simply unaware of their rights, a point made by the Government in its written evidence. Mette Isaksen told us that many tenants who speak to Citizens Advice are simply trying to understand what their options are, and highlighted research that showed 35% of tenants said a lack of knowledge about their rights made negotiating with their landlord more difficult. Dan Wilson-Craw noted that Generation Rent had spoken to many tenants who had already been served an eviction notice, but did not know they were able to contact their council, or how the council might be able to help them. Kate Webb suggested it was unsurprising that local authorities were not proactive about publicising their role, given the limited resources they had to support tenants.
38.The Tenancy Notices and Prescribed Requirements Regulations 2015 made it a requirement for landlords to issue tenants with a copy of the Government’s How to Rent guide at the start of a tenancy. The Minister told us that these guides were regularly updated, and would be again soon, to include details of the legislation that had recently been introduced. Nevertheless, despite the requirement for these guides to be provided to tenants at the start of their tenancy, it is apparent that many continue to be unaware of their rights. Bristol City Council recommended that there should also be “comprehensive advertising of tenants’ rights, particularly through social media”.
39.We note that it is a legal requirement for tenants to be provided with clear information at the start of their tenancies about what their rights are and how they can be exercised in practice. This information will need to be updated by the Government, and tenants informed, as legislation is passed and new rights and routes for redress are made available. The Government should consider new ways of informing tenants and landlords of their rights and responsibilities, in particular through social media.
40.We received evidence on the emergence of so-called ‘lockdown properties’, particularly in London and the South East, which aim to exploit the large difference between the shared accommodation Local Housing Allowance (LHA) rate and the one-bedroom room rate available to those aged over 35. An internal Government report—released in January 2018, following a Freedom of Information request—explained how it works:
The basic premise [ … ] was to convert houses into a large number of very small ‘self-contained’ units, each containing basic cooking facilities, but to also have a shared kitchen so as to be able to claim, for Planning Permission purposes, that the house was a House in Multiple Occupation (HMO) and fell within permitted development rules [ … ] Typically, a three-bedroom house could be converted into six units which [ … ] would generate an annual rental of over £56,000.
41.Lambeth Borough Council told us that, through this model, tenants were living in potentially dangerous accommodation, planning regulations were being breached, local authority housing benefit regulations were being exploited, and there was a potential to launder money and to evade tax. Campaigners estimated that there are over 6,000 such properties in London alone, costing more than £1 billion a year to the housing benefit system.
42.We were told that the powers local authorities need to tackle this problem already exist. Shelter highlighted that there were provisions in housing benefit rules and case law to prevent private landlords charging the one-bedroom LHA rate for extremely small rooms with inadequate cooking facilities. They pointed to DWP guidance published in 2011, which set out the cooking facilities required to qualify for the one-bedroom LHA rate, and an Upper Tribunal decision from 2013, which determined that facilities for cooking “should amount to more than a bathroom sink and an electric socket”. They told us:
Given that there is already provision in housing benefit rules and case law to stop this practice, there would be little to be gained through additional measures to further tighten housing benefit rules [ … ] Local authorities should be enforcing DWP guidance and recent case law to prevent landlords in their areas charging over-inflated rents for extremely small properties.
43.The RLA called on local authorities to ensure greater compliance with existing planning laws. They highlighted that, where a landlord seeks to convert a HMO in which tenants have a bedroom each, but shared kitchen and bathroom facilities, into separate, self-contained units, it constitutes a change in use from a ‘C4’ HMO property to a collection of ‘C3’ properties. This change of use ordinarily requires planning consent and enforcement action could be taken in cases of failure to obtain this.
44.The Minister agreed that local authorities already had the powers they needed to address this issue, and called on them to “robustly tackle abuse of the system and enforce property standards”. She told us that the Housing and Planning Act 2016 and the Greater London Authority Act 1999 gave local authorities sufficient powers to deal with ‘lockdown’ properties, while upcoming changes to HMO licensing would provide them with an additional means to intervene.
45.We heard that some local authorities in London were already working together to tackle ‘lockdown’ properties in their areas. Lambeth Borough Council told us they had, “taken a proactive approach to assisting tenants in the worst quality privately rented housing as a member of the London Lockdown Project, along with eight other councils”. The Government report into the London Lockdown Project highlighted that, in 2015–16, the councils involved undertook 3,204 property inspections, 68 raids on properties, issued 785 enforcement notices, and commenced 58 prosecutions.
46.However, we were also keen to find out what more could be done to support local authorities in tackling ‘lockdown’ properties. Kate Webb told us that one route might be to implement a studio LHA rate, to sit between the shared and one-bedroom rates. Similarly, the Lockdown Project group said that LHA rates needed to be reviewed to ensure they reflected the difference in rental value between lockdown properties and conventional self-contained flats, or that a minimum threshold standard for the self-contained rate should be established. The Minister told the Committee that introducing a link between housing benefit and the quality of accommodation could have unintended consequences, but she committed to review whether the LHA bandings created an incentive to break up family homes into ‘lockdown’ properties.
47.We believe that lockdown properties are an abuse of both the planning and benefits system and show the private rented sector at its very worst. It is a model of housing that must be eradicated before it spreads any further. However, we heard that the tools to do this appear to be available already. We believe that the Local Government Association has an important role to play in encouraging local authorities to use their existing powers and work collaboratively to tackle this problem.
48.In addition, we recommend that the Government consider introducing a new Local Housing Allowance (LHA) rate for studio accommodation, to reduce the perverse incentive for landlords to break up larger properties into much smaller ones to enable them to benefit from the higher LHA rates payable for one-bedroom properties compared to the shared accommodation rate.
18 Q268 and Ministry of Housing, Communities and Local Government, , January 2018, para 2.13
19 Residential Landlords Association (), para 2.1
20 Q3 (Dr Julie Rugg)
21 Q3 (Kate Webb, Shelter) and Q74 (Mette Isaksen, Citizens Advice)
22 Q114 (David Smith, Residential Landlords Association)
23 Q3 (Kate Webb, Shelter)
24 Ministry of Housing, Communities and Local Government, , January 2018, AT2.2
25 Q114 (Adrian Jeakings, National Landlords Association)
26 Q148 (Sir Robin Wales, London Borough of Newham)
27 17% of private rented dwellings had at least one Category One hazard: Department for Communities and Local Government, , March 2017, para 4.15
28 Shelter (), para 4
29 Shelter (), para 3
30 Chartered Institute of Environmental Health ()
31 , HCLG Committee, January to February 2018
32 Department for Communities and Local Government, , March 2017, para 4.15
33 Q3 (Dr Julie Rugg)
34 Q31 (Kate Webb, Shelter) and Crisis (), para 15
35 Q76 (Mette Isaksen, Citizens Advice)
36 For example, Anonymous ()
37 DCLG (), para 11
38 Q5 (Kate Webb, Shelter)
39 Q6 (Dr Julie Rugg)
40 District Council Network ()
41 Citizens Advice, , July 2017
42 , HCLG Committee, January to February 2018
43 For example, Shelter ()
44 Q179 (David Cox, ARLA Propertymark); see alsoIsobel Thomson, NALS [Q179]
45 Q79 (Mette Isaksen, Citizens Advice)
46 Citizens Advice, , July 2017
47 Q87 (Mette Isaksen, Citizens Advice)
48 Q78 (Dan Wilson Craw, Generation Rent)
49 Association of Tenancy Relations Officers , para 7
50 Q15 (Kate Webb, Shelter) and Q80 (Mette Isaksen, Citizens Advice)
51 Q15 and Q17 (Kate Webb, Shelter)
52 DCLG (), paras 43–44
53 Q276 (Mrs Heather Wheeler MP, Minister for Housing and Homelessness)
54 Q277 (Mrs Heather Wheeler MP, Minister for Housing and Homelessness)
55 Q284–287 (Becky Parks, Ministry for Housing, Communities and Local Government)
56 Association of Tenancy Relations Officers , para 19, and London Councils ()
57 Association of Tenancy Relations Officers , para 19
58 London Councils ()
59 DCLG (), para 49
60 Q277 (Mrs Heather Wheeler MP, Minister for Housing and Homelessness)
61 Q281 (Becky Perks, Ministry for Housing, Communities and Local Government)
62 Ministry for Housing, Communities and Local Government, , 18 February 2018
63 Q81 (Mette Isaksen, Citizens Advice)
64 London Councils ()
65 Q135 (David Smith-Milne, Placefirst)
66 Q135 (Adrian Jeakings, National Landlords Association)
67 Q135 (David Smith, Residential Landlords Association)
68 DCLG (), para 49
69 Q279 (Mrs Heather Wheeler MP, Minister for Housing and Homelessness)
70 A point made by David Smith in the context of the Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill - Q116
71 Ministry for Housing, Communities and Local Government, , 18 February 2018
72 DCLG (), para 49
73 Q182 (Isobel Thomson, National Approved Letting Scheme)
74 Q182 (David Cox, ARLA Propertymark)
75 DCLG (), para 17
76 Q80 (Mette Isaksen, Citizens Advice) and Citizens Advice, , July 2017
77 Q80 (Dan Wilson Craw, Generation Rent)
78 Q14 (Kate Webb, Shelter)
79 Q297 (Mrs Heather Wheeler, Minister for Housing and Homelessness)
80 Bristol City Council ()
81 , accessed via:
82 Lambeth Borough Council ()
83 , Ourcity.london, 21 July 2017
84 Shelter (), para 4
85 Shelter (), para 14
86 Residential Landlords Association (}, para 1.7
87 Q288–9 (Mrs Heather Wheeler, Minister for Housing and Homelessness)
88 Lambeth Borough Council ()
89 , accessed via: , para 2.3
90 Q40 (Kate Webb, Shelter)
91 As highlighted in: , accessed via: , para 3.10
92 Q295 (Mrs Heather Wheeler, Minister for Housing and Homelessness)
Published: 19 April 2018