As we reach the end of a truly awful week for the government* the National Audit Office has decided to get in on the act. The Regulation of Private Renting report is the equivalent of a (fully deserved) kicking for the government and its approach to the private rented sector over the past decade. I can’t believe that much in here will come as a surprise to readers of this blog, but it’s truly depressing to have it all pulled together in one place.
First, the scale of the problem. Private renters spend an average of 32% of their income on their housing costs. That is *much* higher than owner-occupiers (18%) and a bit higher than social tenants (27% – that’s itself concerningly high and, I assume, can be attributed at least in part to the rise of the “affordable rent” sic scheme). This isn’t just a source of individual hardship for tenants but is a huge outlay of public funds – the private sector housing benefit bill is over £9bn a year (imagine how many low-cost houses you could build with that money!). And, for all this money, they get what? Certainly not security of tenure – 29,000 households a year are made homeless or threatened with homelessness for reasons which are not related to their default. Nor do they get good quality housing. Some 13% of the PRS has a Category 1 hazard (Housing Act 2004), as against 10% of owner-occupied properties and 5% of social housing.
Secondly, government interaction is piecemeal and lacks any strategic vision for the sector. Importantly, the government has no way of measuring the impact of its interventions. It lacks data on key issues (e.g. scale of harassment and unlawful eviction) and, just as importantly, does not know what the impact of its reforms has been on landlords (either financially or in terms of changes in behaviour). Where it does have data, it hasn’t shared that with local authorities (which, given that they are the primary enforcement vehicle, is breathtakingly stupid**). There is limited “joined up” thinking. The DLUHC does not, for example, have any formal process for discussing tax reform (as it affects LLs and Ts) with the Treasury.
Thirdly, the government has effectively outsourced enforcement to the 308 District/Unitary councils in England. That has, unsurprisingly, led to an enormous disparity in performance, standards, etc and the government does not even take steps to ensure that authorities can learn from each other by promoting good practice. It also doesn’t help to promote its own reforms – there have been just 10 banning orders since they were introduced by the Housing and Planning Act 2016. The ONS has been able to do some limited data analysis and, in a conclusion that will shock precisely no-one, concludes that authorities which have a more active enforcement policy tend to have higher quality housing in their area.
Fourthly, if we turn to tenant-led enforcement mechanisms, these are confusing and expensive. Tenants simply don’t have the knowledge to let them negotiate with their landlords. That’s not surprising – partly because of the inherent power imbalance in the L&T relationship but also, as the report explains, because many tenants are either not native English speakers or face other structural disadvantages.
I don’t know whether to rage or weep when I read things like this. I commend this report to anyone with an interest in the sector. We are all – landlords, tenants, home owners – failed by this level of incompetence.
* all self inflicted and, frankly, disgusting.
** Although entirely in keeping with the standards of this government.