The LGA’s view is that the best way to increase housing security is to address the unaffordability of housing, which is a key reason why many people lose their tenancy and become homeless.
Key messages
- A fairer private rented sector’ White Paper sets out the Government’s long-term vision for a private rented sector (PRS). It includes plans to abolish Section 21 ‘no-fault’ evictions and introduce a simpler tenancy structure, apply the Decent Homes Standard to the PRS, introduce a new Property Portal to help landlords understand their obligations and introduce a housing ombudsman covering all PRS landlords and provide redress for tenants.
- We broadly welcome the reforms in the White Paper, including a legally binding and enforceable Decent Homes Standard (DHS), and we welcome the reformed grounds for possession for landlords who wish to sell their property and to allow landlords and their close family members to move into a rental property. This will give landlords the flexibility to recover their property when needed.
- Everyone deserves a safe, decent, warm, and affordable place to live - this is critical to the health and well-being of communities.
- It is vital that Government acts fast to bring forward the Renters’ Reform Bill, set out in the Queen’s Speech in May 2022, to ensure private renters have a home that is safe, stable, and affordable.
- Statistics show that PRS tenants generally face lower quality standards in their accommodation than those who access social housing. We, therefore, welcome the proposals in the White Paper, which aim to raise standards in the PRS. This will create a more level playing field for those seeking rented accommodation.
- We recognise the need for measures to improve living conditions in the PRS, and a stronger regulatory framework will be central to achieving this. A legally binding and enforceable Decent Homes Standard (DHS) would see the number of decent homes in the PRS increase and close the gap in housing quality between both rental sectors, resulting in a fairer PRS.
- The ending of a privately rented tenancy is the most common reason for homelessness, accounting for 37.1 per cent of households owed a prevention duty between January and March 2022. We, therefore, welcome proposals that will support councils to prevent homelessness and will mitigate against tenants being forced to leave the PRS due to being evicted for no valid reason.
- The abolition of Section 21 “no-fault” evictions will allow tenants to challenge poor and unfair practices without fear of retaliatory eviction. We welcome this reform, and in addition to providing a fairer PRS through enhanced security of tenure, we are hopeful this will prevent homelessness.
- The introduction of an Ombudsman for the private rented sector, as an additional mechanism for tenants to seek redress from their landlord in circumstances that warrant it, is a welcome step. Good enforcement depends on adequate resourcing in councils. This is because effective enforcement of regulations relies on an adequate number of qualified and trained staff, and we know they are difficult to recruit. This has led to some councils experiencing a skills shortage and a capacity challenge.
- We broadly welcome the reforms to improve access to data on the PRS and mandate landlord registration through the Property Portal. The Property Portal will dramatically increase councils’ ability to enforce against the small minority of landlords guilty of criminal behaviour.
- Licensing schemes are a good tool for tackling area-specific issues concerning poor-quality accommodation. However, councils at present lack the flexibility to use licensing to full effect, as licensing schemes are subject to Secretary of State approval if they cover over 20 per cent of a council’s geographical area or if it would affect more than 20 per cent of privately rented homes in the local authority area.
- We have published a good practice guide for councils to improve the quality of the PRS across England.
- Some parts of the private rented sector work effectively and provide high-quality accommodation for those who choose to rent or who are unable to buy. However, poor housing conditions are generally concentrated at the lower end of the market, which provides accommodation to vulnerable groups.
- The LGA’s view is that the best way to increase housing security is to address the unaffordability of housing, which is a key reason why many people lose their tenancy and become homeless.
- There is a national shortage of affordable homes, and almost 8 million people in England are estimated to have some housing needs. For 1.6 million households, social-rented housing is the more appropriate and affordable solution to their housing needs. However, there are currently 1,188,762 people on council housing waiting lists. Research for the LGA and partners has found that investment in a new generation of social housing at a rate of 100,000 each year would provide a £15 billion boost to the economy. With a large proportion of the money spent on constructing new homes staying local, it can be targeted at communities that need both homes and jobs. We also found that every £1 invested in a new social home generates £2.84 in the wider economy, with every new social home generating a saving of £780 a year in housing benefits.
- To fix the unaffordability of housing, the Government needs to reform the Right to Buy scheme so that councils can build more genuinely affordable homes by allowing councils to keep 100 per cent of receipts from homes sold to reinvest in housing delivery. The LGA's Submission to the Government's Medium-Term Fiscal Plan and ahead of the Autumn Statement, amongst other things, offered several solutions that could help the Government achieve its goal of increasing the number of new homes built to 300,000 a year by the mid-2020s.
- It is also important that parts of the welfare system, particularly inappropriate Local Housing Allowance (LHA) rates, are addressed. Though this was partially addressed in the Coronavirus Act 2020 through a realignment of LHA rates so that they accurately reflected the 30th percentile of rents, this was temporary. The confirmed freeze of LHA rates at 2020/21 levels is significant for those living in the privately rented sector relying on housing benefits. While the cost of living is increasing, the freeze will leave even less money in the pockets of those on low incomes.
- It is important that there is an update to the Housing, Health and Safety Rating system (HHSRS) governing property conditions which are not understood by many landlords. Local authorities need better data with a national registration system of all landlords and adequate funding to develop appropriate responses to the challenging nature and context of the private rented sector.