Public Accounts Committee give their verdict on the private rented sector

Wednesday, April 27th, 2022 - Public Accounts Committee

Public Accounts Committee in Parliament

In a report published 13 April 2022, Parliament’s Public Accounts Committee says it is “too difficult for renters to realise their legal right to a safe and secure home” and that local authorities – constrained by a lack of support from the Department for Levelling Up, Housing and Communities (DLUHC) and its approach to licensing landlords – do not have the capacity and capability to provide “appropriate and consistent protection for private renters“.

The Committee’s report follows a National Audit Office report published in December 2021 which found the government lacked clear vision and strategy for regulating the private rented sector (read here).

The Committee found the private rented sector in England has doubled in size in the last 20 years and now houses 11 million people.

13% (589,000) of privately rented properties currently pose a serious threat to the health and safety of renters, costing the NHS an estimated £340 million each year. Yet the report concludes enforcement in the sector “is a postcode lottery ‚Ķwith 21% of all privately rented homes in one region estimated to be severely unsafe“.

The Committee says DLUHC has “only made piecemeal legislative changes in recent years, and in doing so has made the regulatory system even more overly complex and difficult to navigate for tenants, landlords and local authorities“.

The Committee is concerned that plans to address problems in the sector in a White Paper later in the year will be hampered by DLUHC’s poor understanding of the issues including overcrowding, harassment and evictions, and the actual effect of regulation.

In relation to property licensing, the Committee raised concerns about the need for Secretary of State approval to implement selective licensing schemes covering over 20% of private rented homes, or 20% of the borough. They also raised concerns about the maximum five-year duration for additional and selective licensing schemes.

Six recommendations for action

The committee made six recommendations to DLUHC.

Recommendation 1

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.

Recommendation 2

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 the Committee within the next six months with an update on the outcome of this assessment.

Recommendation 3

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.

Recommendation 4

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.

Recommendation 5

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 the Committee and the Levelling up, Housing and Communities Committee.

Recommendation 6

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.

Dame Meg Hillier MP, Chair of the Public Accounts Committee, commented:

Unsafe conditions, overcrowding, harassment, discrimination, and dodgy evictions are still a huge issue in the private rented sector.

And yet the sector is a growing provider of homes and rents keep rising meaning that safe, suitable housing is too often out of reach for renters. Renters with a problem are faced with a complex and costly redress system which is not fit for purpose and many tenants give up at the first hurdle.

We need to see a change in balance. We expect DLUHC to produce the promised White Paper in a timely and effective fashion and start to turn around its record on addressing the desperate housing crisis in this country.

A full copy of the report can be viewed here.

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