The Postcode Lottery of Local Authority Enforcement in the Private Rented Sector

by | Nov 29, 2018 | Regulation & Enforcement, Reports

Everyone deserves a safe and secure home. Poor quality housing should not exist in a modern society. The latest English Housing Survey has shown that while property conditions have improved over the past decade, there is still work needed to be done to ensure all tenants (both social and private) have access to safe and secure homes (MHCLG, 2018). The Government has taken steps to provide more powers to Local Authorities through the Housing and Planning Act 2016, and the introduction of Civil Penalty Notices up to £30,000. There is limited knowledge on how local authorities are implementing their new powers, nor, of how useful some powers are in addressing problems in the sector. Addressing this gap is key to developing new policies that can help drive criminal landlords out of the sector, ensure a level playing field for landlords that offer safe and secure homes, and ensure no tenant is subjected to poor quality housing.

The research presented in this report provides the opportunity to address these gaps and to further our understanding of local authority enforcement in the private rented sector. The research was conducted between June and September 2018 and involved submitting two Freedom of Information requests to Local Authorities in England and Wales. The first FOI was on Local Authority enforcement and received 291 responses, while the second FOI focussed on the new Civil Penalty Notices and received 293 responses.

Key findings

  • Our research found Enforcement activities by Local Authorities differ right across England and Wales. While in 2017/18 the number of improvement notices served increased by 7% in comparison to 2012/13, 18% of Local Authorities reported they had not served a single Improvement Notice.
  • This finding is even more striking for landlord prosecutions which are sporadic across England and Wales, with 67% of Local Authorities not commencing a single prosecution against a private landlord in 2017/18. This is despite the number of prosecutions commenced increasing by 460% in 2017/18 in comparison to 2012/13.
  • The postcode lottery of local authority enforcement in the private rented sector is further evidenced through the low take up of new Civil Penalty powers. 89% of Local Authorities reported they had not used the new powers, and 53% reported that they did not have a policy in place to use the powers. Of those that had issued a Civil Penalty Notice, of which only 332 were served in 2017/18, 82% of these were from Local Authorities in London.
  • Finally, our analysis of the introduction of Selective Licensing schemes across 32 Local Authorities against complaint and enforcement data shows that there was no significant difference in the before or after the introduction of the scheme. The findings indicate that Selective Licensing schemes do not support local authorities to improve standards or increase enforcement activities against criminal landlords. Instead, we argue that these schemes are to the detriment of good landlords and tenants, and local authorities need to engage in targeted enforcement against the criminals that provide unsafe housing.

Key Recommendations

The findings of this research have provided a greater understanding of the different levels of local authority enforcement in the private rented sector. From these findings, we have developed key recommendations that we believe will improve the current private rented sector. These are as follows:

  1. There needs to be more funding for local authorities to ensure they have the resources necessary to tackle poor quality housing. Furthermore, MHCLG need to follow up on the lax take-up of new powers by Local Authorities to ensure that these are implemented effectively, especially as income from Civil Penalty Notices contributes to the local authority housing enforcement budget directly.
  2. There needs to be a review of the current legislation and regulations of the private rented sector. This review needs to explore the current standards and the different systems including the Housing Health and Safety Rating System (HHSRS) and the Decent Homes Standards. This review should then develop a single standard that is easy to understand and implement for tenants, landlords, letting agents and local authorities.
  3. We welcome the Government’s recent consultation on the case for a Housing Court. We recommend that the Government should introduce a specialist housing court that could work in tandem with the Homes (Fitness for Human Habitation) Bill 2017-19 to ensure good tenants and good landlords have access to fair and cost-effective justice.
  4. The current taxation system does not encourage landlords to proactively improve their properties. Therefore, tax relief should be moved from relief on sale with Capital Gains Tax, to tax relief on the improvements against rental income. Clarke and Oxley (2018, p.19) argue that this would “incentivise landlords to improve the quality of accommodation they offer”. Our previous research identified that 61% of landlords would improve the energy efficiency of their properties if there were tax relief for improvements (Simcock, 2018). This change would support a majority of landlords to proactively improve their properties, delivering a potential £240 million annual investment into the sector, and help to reduce fuel poverty for some of the most vulnerable tenants who live in the sector.
  5. The findings of this report demonstrate that there is no significant impact of selective licensing schemes on enforcement by local authorities or the number of complaints recorded. Rather than introduce costly licensing schemes that put the burden of cost on good landlords and tenants, the Government should work with the sector to develop co-regulation schemes. These schemes would be built upon the foundations of alternative dispute dissolution and continuous professional development. This would enable a cost-effective method of ensuring landlords are kept up-to-date with their responsibilities, ensuring high-quality properties, and also would provide enhanced and speedy justice for both landlords and tenants.