LGA Response to DLUHC’s Decent Homes Standard in the Private Rented Sector Consultation

1.    Summary

• We welcome the introduction of a legally-binding Decent Homes Standard (DHS) and we would support the removal of the term ‘old’ in the DHS, so only the condition is relevant.
• Failure to comply with the DHS should be a criminal offence and councils should have the option to issue civil penalties or prosecute, alongside rent repayment orders and banning orders.
• National guidance on exemption circumstances from the DHS would be welcome. However, most exemptions should be at the discretion of councils.
• We agree that there needs to be a clear definition of who would be liable for the failure to meet the Decent Homes Standard, particularly to take account of more complex circumstances where it is not simply a property owner letting to a tenant, for example where there is a freeholder alongside a long leaseholder and potentially further subleases. There must be uniformity across all systems on the individual that is liable for enforcement action to be taken against as a result of non-compliance with the DHS. Compliance should be captured in the Property Portal.
• Given councils existing role in tackling poor property conditions in the private rented sector, it makes sense that councils should investigate and address complaints of non-compliance. Any new duty must be supported by upfront and sufficient new burdens funding. In accordance with the LGA’s guidance on new burdens for local government enforcement duties, our recommendation is that the new burden should be assessed on the basis of funding additional staff to undertake it. Without additional staff being supported through new burdens funding, the same number of officers will be required to undertake an even greater number of responsibilities. However, the role of councils should go further, and be a proactive one.  This means primarily targeting inspections towards properties that are non-decent and that are experiencing the most severe challenges, without relying on residents to make a complaint when the property doesn’t comply. The new burdens assessment should incorporate this approach. 
• Councils should be able to issue improvement notices, undertake emergency remedial action and issue failure prohibition orders. This is because councils must have access to a range of powers to deal with non-compliance proportionately, at the earliest stage. 
• To mitigate the risk of landlords exiting the private rented sector (PRS) or passing the costs of meeting the DHS on to tenants, an extended implementation timeframe would be appropriate. An 18-month transition period will be sufficient to mitigate the risk. We do not support a cost cap, as this will deliver the wrong message to landlords and the benefits of this reform may be lost. A cost cap would suggest that there is a threshold where the cost of compliance outweighs the benefits to the tenant – including improved health and wellbeing - which is at odds with the principles that underpin the PRS White Paper reforms.
• The scope of the DHS should be as wide as possible because it would be unfair for residents in the PRS to expect lower quality standards in their home than other properties in the sector (and in other sectors).
•  All elements of the DHS should come in at the same time – we do not support phasing. 18 months is already a lengthily period of time to adapt to the new responsibilities and phasing may result in confusion and inconsistency. 

2.    Consultation Questions 

The Decent Homes Standard

Proposed standard for the private rented sector 

12. Do you support bringing in and enforcing the Decent Homes Standard, as set out above, in the private rented sector?

• Yes
• No
• Don’t know

We welcome the introduction of one, universal DHS, which is applied equally to all housing sectors. A legally binding and enforceable DHS should see the number of decent homes in the PRS increase and close the gap in housing quality between both the social and private rental sectors, resulting in a fairer PRS.

13. How clear is the Standard as set out?

• Very clear
• Quite clear
• Neither clear nor unclear
• Quite unclear
• Very unclear
• Don’t know

The DHS has sufficient detail and providing a definition for the terminology used is helpful.

14. How difficult do you believe the Standard will be to meet?

• Very easy
• Quite easy
• Neither easy nor difficult
• Quite difficult
• Very difficult
• Don’t know

This is because 79% of properties in the PRS already meet the DHS and therefore will not require any additional investment. In addition, ‘criterion A’ – being free from category 1 hazards under the Housing Health and Safety Rating System - already applies to the PRS. Also, investing in the property to meet the DHS is likely to deliver cost efficiencies in the future because the capital works will add value to the property and the property is less likely to fall into disrepair.

15. Currently, a property will fail the Decent Homes Standard if a ‘key building component’ (e.g. wall, window, roof) is both old and in poor condition. Should we change the Standard to remove ‘old’ so only the condition is relevant?

• Yes
• No
• Don’t know

Although there are some benefits to the inclusion of age, overall, it adds little value and is less important than whether the facility is functional and safe. It would be unreasonable to characterise a property as non-decent on its age alone. Anecdotally, we know that the age of the facility can sometimes be difficult to ascertain.

Enforcement of a Decent Homes Standard in the private rented sector

Landlord duty to meet the Decent Homes Standard

16. Do you think that a landlord’s failure to meet the Decent Homes Standards should be a criminal offence?

• Yes
• No
• Unsure/Don’t know

This sets the right tone, underlines the critical importance that the DHS is being given and will act as a deterrent.

17. Should local councils have the option to issue civil penalties or prosecute for Decent Homes Standard offences?

• Local councils should only issue civil penalties
• Local councils should only prosecute
• Local councils should have the option to issue civil penalties or prosecute
• Local councils should not be able to issue civil penalties or prosecute
• Unsure/Don’t know

Councils must have a range of powers that they are able to use to compel the landlord to comply with their legal responsibilities as early as possible. Use of civil penalties and prosecution will be a last resort, but its existence will serve as a deterrent for non-compliance, as quite often a fine of a lesser amount can be a ‘drop in the ocean’ for some landlords. We would welcome the power to issue a fine up to £30,000 when landlords are found to be non-compliant. This will act as a meaningful deterrent.

18. Do you think rent repayment orders should be extended to include Decent Homes Standard offences?

• Yes
• No
• Unsure/Don’t know

PRS tenants pay rent in exchange for a service – in this case, a property that is fully compliant with its legal requirements including the DHS. If the property is non-decent, then this service has not been provided and it is reasonable that a rent repayment order is used for recovery purposes. We would welcome measures that enhance the efficiency, timeliness and accessibility of redress processes. It’s vital that PRS tenants can access suitable redress at the earliest opportunity.

19. Do you think that a landlord’s failure to meet their duty to keep a property at Decent Homes Standard should be included as a banning order offence?

• Yes
• No
• Unsure/Don’t know

Given that the DHS will be legally-binding, it is proportionate and consistent that persistently breaking the law should eventually result in a banning order. Once again, we would support action that seeks to enhance the efficiency and timeliness of using this measure to ensure that punitive action can be taken promptly.

Exemptions from the duty

20. Do you think that local councils should have the discretion to make properties temporarily exempt from the duty to meet the Decent Homes Standard on a case-by-case basis (with regard to statutory guidance)?

• Yes
• No, exemptions should exist but not at the discretion of local councils
• No, there should be no exemptions
• Unsure/Don’t know
• Other, please specify [free text]

As a general principle, councils should have the discretion to flexibly respond to exceptional and unforeseen circumstances at local level and temporarily exempt when appropriate.

21. In some instances, carrying out Decent Homes Standard work or repairs without permission would put the landlord in breach of a statutory obligation, such as in the case of listed buildings. We are proposing to exempt landlords where they have attempted to obtain permission to carry out the works and been refused. Do you think it would be appropriate for this exemption to the Decent Homes Standard to be set out in legislation?

• Yes
• No, these should be discretionary exemptions issued by the local council
• No, this should not be an exemption
• Unsure/Don’t know

22. Do you think local councils should have the discretion to temporarily exempt a landlord from the duty to meet the Decent Homes Standard where the landlord has bought a property with sitting tenants that does not meet the Standard?

• Yes
• No, this exemption should be set out in legislation
• No, this should not be an exemption
• Unsure/Don’t know

23. Do you think local councils should have the discretion to temporarily exempt the personal representatives of a landlord from meeting the Decent Homes Standard where a letting property is under probate?

• Yes
• No, this exemption should be set out in legislation
• No, this should not be an exemption
• Unsure/Don’t know

24. Do you think local councils should have the discretion to temporarily exempt an incoming manager from the duty to meet the Decent Homes Standard where a landlord has either lost their HMO licence or is not fit and proper, so a new company or person is managing the property?

• Yes
• No, this exemption should be set out in legislation
• No, this should not be an exemption
• Unsure/Don’t know

25. Do you think local councils should have the discretion to temporarily exempt someone from the duty to meet Decent Homes Standard where they are taking over the property on a temporary basis due to the landlord being incapacitated?

• Yes
• No, this exemption should be set out in legislation
• No, this should not be an exemption
• Unsure/Don’t know

26. Do you think local councils should have the discretion to temporarily exempt a landlord from the duty to meet the Decent Homes Standard where accidental damages have occurred (e.g. fires, floods, storms, etc.)?

• Yes
• No, this exemption should be set out in legislation
• No, this should not be an exemption
• Unsure/Don’t know

27. Do you have any further comments on exemptions from the landlord duty to meet the Standard? [free text]

National guidance on this issue would be welcome. In most circumstances, exemptions should be at the discretion of councils and in accordance with a published policy developed at local level. However, we would welcome legislation on exemptions when the landlord has attempted to obtain permission to carry out the works but has been refused due to a breach in statutory obligations and when the property is under probate.

Responsible person for the landlord duty

28. Who do you think should be responsible for a Decent Homes Standard failure? Please select one or more responses.

• The immediate landlord - the person who receives the rent from those living in the property. Although this person has a direct relationship with the tenants they may not have sufficient control over the property to ensure it meets the Decent Homes Standard.
• The person with “control” over the property - this may not be the immediate landlord if in order to comply with the Decent Homes Standard they need consent from a superior landlord. A person would have “control” if they can make decisions about the property to ensure the Decent Homes Standard is met without having to seek consent from a superior leaseholder or freeholder.
• The freeholder of the property or the leaseholder with a lease of more than 21 years - which party is responsible for the relevant criterion of the Decent Homes Standard will depend on the rights and responsibilities as set out in the terms of individual leases.
• Other [free text]

It should be the immediate landlord if they have sufficient control to authorise the works unilaterally. Otherwise, it is the freeholder or leaseholder that can legally authorise the necessary DHS works.

Registering Decent Homes Standard compliance on the Property Portal

29. Do you think that landlords should use the Property Portal to register Decent Homes Standard compliance of their properties or record where there is an agreed exemption?

• Yes
• No
• Unsure/Don’t know 

The purpose of the Property Portal is to promote transparency, share intelligence and enable councils to better regulate the sector. Therefore, it is right that such information is recorded.

30. Tenants only: Would you find it helpful to be able to view whether your current or prospective property had been declared Decent Homes Standard compliant by the landlord or whether an exemption was in place?

• Yes
• No
• Unsure/Don’t know
• Not applicable

31. Do you think it should be an offence to provide false or misleading information regarding Decent Homes Standard compliance and exemptions?

• Yes
• No
• Unsure/Don’t know

32. Duplicative burdens on landlords at local and national level are undesirable where they can be avoided. We want to work with local councils and other stakeholders to ensure that the transition to a Privately Rented Property Portal is as seamless as possible, including looking at how it can integrate with licensing schemes where practicable. We will also work to streamline requirements for landlords, such as by working with BEIS on synchronising guidance on minimum energy efficiency. It is imperative that the system meets the needs of landlords, tenants, agents and local councils. Please share thoughts on how we can streamline requirements and support compliance. [free text]

It is right that duplicative burdens are not placed on landlords. We would welcome a commitment to streamline the legal and regulatory framework in a way that does not compromise the ambition to deliver a fairer PRS and raise quality standards.

The individual that is liable for non-compliance with the DHS should be recorded in the Property Portal and registered with the Ombudsman. To support accountability and the ability for councils to undertake enforcement, there should be uniformity across all systems in relation to liability for non-compliance of the Decent Homes Standard.

If the Government is serious about raising standards in the PRS, then further reform of the selective licensing policy will enhance the regulatory power of councils to deliver this ambition. It is imperative that the Government removes the requirement for Secretary of State approval for larger schemes so that councils can regulate the PRS more effectively.

Duty on local councils to investigate Decent Homes Standard complaints and report on enforcement action

33. Do you think local councils should have a duty to investigate complaints of properties that fail to meet the Standard in their area?

• Yes
• No
• Unsure/Don’t know

It is right that councils regulate the DHS by taking action to investigate and address complaints of non-compliance. However, to increase the likelihood of changing landlord behaviour to be more proactive in complying with the DHS, a proactive approach should be reflected by councils in their approach to inspection. This means primarily targeting inspections towards properties that are non-decent and that are experiencing the most severe challenges, without relying on residents to make a complaint when the property doesn’t comply. Councils need to be adequately resourced to undertake this duty and will require sufficient upfront new burdens funding.

34. Should local councils be required to report activity related to addressing properties that fail to meet the Standard in their area?

• Yes
• No
• Unsure/Don’t know

This should be recorded in the Property Portal to share intelligence and data on PRS properties and landlords, which is the main purpose of the Portal. This new responsibility should be included in the new burdens assessment.

35. If local councils were required to report their Decent Homes Standard activity, to whom should they provide the information?

• To their local community
• To central government
• Both their local community and central government
• Unsure/Don’t know

This is because it is the community that uses the PRS and reporting will enable informed decision-making.

36. [For local councils only] How important would standalone enforcement guidance be to assist local councils in enforcing the Decent Homes Standard?

• Very important
• Moderately important
• Not important
• Unsure/Don’t know
• Not applicable

It would particularly be valuable to set out the range of powers at the disposal of councils. This should include the circumstances that each power may be used in a way that is proportionate and also an approach to escalation when the power fails to achieve compliance.

37. Do you have any further comments on the proposal to put a duty on local councils? [free text]

The new duties emanating from these reforms will only be implementable if they are supported by upfront and sufficient new burdens funding. It would be unrealistic and impractical to expect councils, some of whom are already experiencing financial challenges, to be able to enforce the standard without additional, upfront funding to offset the new responsibilities. To illustrate those financial challenges, when inflation was expected to be 8% in 2022/23 our analysis suggested cost pressures would be £2.4 billion higher in 2022/23 than they were when councils were planning their 2022/23 budgets in autumn last year. Our analysis also suggests a funding gap of £3.4 billion in 2023/24 and £4.5 billion in 2024/25 including the forecast increase in the National Living Wage. Since then, inflation rose to 10.1 per cent in July and the Bank of England predicts inflation will be 13 per cent in the autumn 2022.

But to deliver the best results for the PRS, councils must have the resources to regulate proactively, going above and beyond relying on residents to make a complaint when the property doesn’t comply. This means targeting inspections towards properties that are non-decent and that are experiencing the most severe challenges. A proactive approach to raising quality standards is being adopted in the social housing sector by the Regulator of Social Housing (RSH), and therefore the new burdens assessment must enable councils to take a similar approach if standards in the PRS are to truly be brought into line with other sectors. In accordance with the LGA’s guidance on new burdens, our recommendation is that the new burden should be assessed on the basis of funding additional staff to undertake it. Without additional staff being supported through new burdens funding, the same number of officers will be required to undertake an even greater number of responsibilities.

Provide local councils with powers to remedy properties that do not meet the standard

38. Do you think Decent Homes Standard failure awareness notices are a useful part of Decent Homes Standard enforcement?

• Yes, they are useful
• No, they are not useful
• Unsure/Don’t know

Anecdotally, we have heard that failure awareness notices have limitations when regulating the PRS. They are not effective at compelling landlords to change their behaviour and take action to ensure their property is compliant.

39. Do you think local councils should have the power to serve Decent Homes Standard improvement notices?

• Yes
• No
• Unsure/Don’t know

This would be a useful initial tool to give the landlord an opportunity to act, before any further enforcement action is taken. It is right that councils have access to a range of powers to regulate the PRS and be given a choice regarding the most proportionate measure, to ensure that the property can be brought up to the DHS at the earliest possible stage.

40. Do you think local councils should have the power to undertake emergency remedial works?

• Yes
• No
• Unsure/Don’t know

This would be a useful and proportionate escalatory measure to use when the landlord does not act on the improvement notice. But there must also be a mechanism to require landlords to pay for remedial action within a specific timeframe e.g 28 days. In addition, this power is being proposed for the RSH in the social housing sector, and there is a case to be made for aligning the regulatory powers as far as possible to close the gap in housing quality between both sectors.

41. Do you think local councils should have the power to issue Decent Homes Standard failure prohibition orders?

• Yes
• No
• Unsure/Don’t know

There needs to be a ‘next step’ if the landlord repeatedly fails to comply, and this next step must be some form of punitive action. Once again, councils should have a range of powers to choose from to tackle non-compliance proportionately.

Clarify in legislation that landlords do not have a right to attend local council inspections

42. Should we amend legislation to make it explicit that a landlord does not have a right to attend inspections [by virtue of receiving notice to that effect]?

• Yes
• No
• Unsure/Don’t know

There should not be an automatic right or assumption that the landlord is to attend the council-led inspection for the reasons set out in the consultation i.e gamesmanship and allowing the tenant to speak more freely about their experience.

Providing advice on decency

43. Do you think that there is a role for other providers (not just the local council) in providing advice to landlords on whether their properties meet the Decent Homes Standard?

• Yes
• No
• Unsure/Don’t know

44. Do you think local councils have a role in providing advice to landlords on pre-emptive work to prevent properties failing to meet the Standard in the near future?

• Yes
• No
• Unsure/Don’t know

45. Where local councils provide this advice, should they be able to charge for this service?

• Yes
• No
• Unsure/Don’t know

It is right that councils - or any organisation – should have the flexibility to charge for a service that it provides. Research by both the Public Accounts Committee and DLUHC have recognised that council enforcement teams are experiencing capacity challenges. Therefore, the ability to charge for this service becomes even more important.

Scope of application of the Decent Homes Standard

46. Should the Decent Homes Standard apply to all privately rented accommodation let on a tenancy?

• Yes
• No
• Unsure/Don’t know

The scope should be far-reaching because it would be unfair for residents in the PRS to expect lower quality standards in their home than other properties in the sector (and in other sectors).

47. Should the Decent Homes Standard apply to residential temporary accommodation provided by local councils to homeless households?

• Yes
• No
• Unsure/Don’t know

48. Should the Decent Homes Standard apply to purpose-built student accommodation (e.g. halls of residence owned by universities or other providers)?

• Yes
• No
• Unsure/Don’t know

49. Should the Decent Homes Standard apply to property guardians, where empty buildings are temporarily used for accommodation to provide security?

• Yes
• No
• Unsure/Don’t know

50. Should the Decent Homes Standard apply to lodgers, where a tenant lives in the property with the landlord?

• Yes
• No
• Unsure/Don’t know

51. Should the Decent Homes Standard apply to non-traditional accommodation such as house boats or caravans?

• Yes
• No
• Unsure/Don’t know

52. Should the Decent Homes Standard apply to ‘tied’ accommodation, which is where an individual is required to or has the option to live in certain accommodation for the purpose of their employment?

• Yes
• No
• Unsure/Don’t know

53. Should the Decent Homes Standard apply to farm business tenancies and agricultural holdings?

• Yes
• No
• Unsure/Don’t know

54. Do you have any other comments on the scope of the Decent Homes Standard, including other types of accommodation that you think should or should not be included in scope? [free text]

No.

Impacts and costs

55. What do you think will be the main impacts from bringing in a Decent Homes Standard in the private rented sector for both tenants and landlords? Please provide any evidence and further comments on impacts in the free text box.

• Improved tenant/landlord relationship
• Fairer competition in the rental market
• Improved health for tenants
• Improved wellbeing for tenants
• Increase in tenants’ pride in their home
• Improved communities
• Financial cost for landlords to make changes
• Landlords reducing their portfolio size
• Increased rents
• Increased property values
• Disruption for tenants whilst works are being undertaken
• Disruption for landlord whilst works are being undertaken
• Other (if you have evidence or further thoughts, please include here) [free text]

56. There are risks that bringing in the Decent Homes Standard means landlords exit the market or that they pass costs on to tenants. Which of the below would you support to mitigate the risks of any negative impacts of introducing a Decent Homes Standard in the private rented sector? Choose as many as you would like.

• Cost caps
• Extended implementation timeline
• None
• Other [free text]

Although the PRS is fluid, we recognise that a net reduction in housing supply is a risk as a result of this reform. Landlords may decide that investing in the property to comply with the DHS and subsequent maintenance may not be in their financial interest, and they may sell the property. An extended implementation timeline would be an appropriate mitigation.

57. To what extent would you support bringing in a cost cap on criteria B, C and D of the Standard (e.g. on the non-safety elements of the Standard)?

• Strongly supportive
• Quite supportive
• Neither supportive nor unsupportive
• Quite unsupportive
• Strongly unsupportive
• Unsure/Don’t know

This policy proposal is inappropriate and sends out the wrong message to landlords. The reason for this is because it would suggest that government views criteria B, C and D as subordinate to criteria A, and there is a risk that landlords will view the criteria in the same way which may impact full compliance. One of the major benefits of this reform is improved health and wellbeing for tenants. In addition, the Centre for Ageing Better commissioned analysis which identified the positive benefits for the NHS, alongside supporting sustainable employment, reducing demand for both social care and welfare as a result of accessing a decent home. This policy would suggest that there is a threshold where the cost of compliance outweighs the benefits to the tenant, which is at odds with the principles that underpin the PRS White Paper reforms. The landlord should be focused on meeting the DHS criteria in full, not the cost. Otherwise, there is a risk that the DHS will not be met in full and the benefits of this reform including delivering a fairer DHS, will be lost.

Transitioning to the standard

58. Do you think there should be a transitionary ‘grace’ period before the Decent Homes Standard becomes a requirement, and when enforcement action can be taken?

• Yes, there should be a grace period
• No, there should be no grace period
• Unsure/Don’t know

Landlords should be allowed a period of time to undertake the necessary works to adapt to their new legal responsibilities.

59. If there were to be a grace period, what length of grace period should there be before the Decent Homes Standard becomes a requirement?

• Less than 12 months
• 12 months
• 18 months
• Longer than 18 months
• There should not be a grace period
• Unsure/Don’t know

The reason for this length of time is to mitigate the risk that landlords exit the PRS.

60. Do you think that we should phase in parts of the Standard. For example, to bring in criteria A and B in the first instance, before including criteria C and D at a future point

• Yes, the elements of the Standard should be phased
• No, all elements of the Standard should come in at the same time
• Unsure/don’t know

18 months is already a lengthily period of time to adapt to the new responsibilities and phasing may result in confusion and inconsistency.

61. If elements of the Standard were to be phased in, please rank the order you would want them to be brought in from first to last.

• Criterion A: It meets the current statutory minimum standard for housing
• Criterion B: It is in a reasonable state of repair
• Criterion C: It has reasonable facilities and services
• Criterion D: It has a reasonable degree of thermal comfort

Not applicable. See answer to Question 60.

62. If elements of the Standard were to be phased in, how long would you like to see between phases?

• Less than 6 months
• 6-12 months
• 12-18 months
• More than 18 months
• There should not be any phasing
• Unsure/don’t know

Not applicable. See answer to Question 60.