So an independent review of the private rented sector ends with the rejection of almost all its recommendations and the adoption of the one thing it specifically recommended against.
It’s not the first time an independent review has been shelved- after all, this one was commissioned by a Labour government - and it’s not exactly a surprise that a Conservative government would reject any further regulation of private landlords.
But the long delay in implementation by Labour and the predictable response by housing minister Grant Shapps will come to be seen as a major missed opportunity for the sector.
The issue as always is how to balance greater protection for tenants and action against bad landlords against freedom for good landlords to operate and encouragement for them to invest. That’s a major consideration since investment in housing seems unlikely to come from anywhere else for the rest of this decade.
The original report by Julie Rugg and David Rhodes struck that balance with a call for light-touch regulation, arguing that ‘any scheme that is put in place must not stifle commercial activity or place an undue burden on statutory authorities with regard to implementation’.
Their package included a national licensing system for landlords, mandatory regulation of letting agents and the creation of new social lettings agencies. However, they rejected extra protection for tenants against retaliatory eviction and any change to the current system of assured shorthold tenancies.
A green paper by the Labour government accepted most of the recommendation and added a new one. To tackle the problems caused by large concentrations of students in areas of university towns a new use class order would be created so that any new house in multiple occupation would need planning permission.
Rugg and Rhodes had specifically rejected this proposal, arguing that it was ‘an extreme response given the limited nature of the problem. Change to the use classes order introduces the need for additional activity that local authorities are ill-equipped to handle’.
However, the government delayed legislating for so long that most of the recommendations had not been implemented by the time it left office.
At Communities and Local Government questions on Thursday Grant Shapps confirmed that ‘we…have no plans to take forward the previous Government’s ideas about further regulatory measures on this subject’.
However, pressed about the use class order for HMOs by Southampton Test MP Alan Whitehead, Shapps said ‘we will ensure that councils in areas such as Southampton maintain those powers. My only concern is to ensure that we do not have a system in place for homes in multiple occupation that is so overarching that it applies to areas where HMO students are not a problem’.
Reaction so far ranges from the predictable (welcomed by the National Landlords Association, disappointment from Citizens Advice) to the more nuanced. The British Property Federation was ‘glad to see the back of’ the landlord register but attacked the HMO restrictions and said it would be a pity to lose regulation of letting agents.
And so yet another attempt to find consensus about private rented sector reform ends in failure.
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Readers' comments (3)
Joe Halewood | 14/06/2010 7:08 pm
http://research.dwp.gov.uk/asd/hbctb.asp
The above link is to the official HB and CTB stats.
As Grant Shapps is happy that the current system of regulation for private sector landlords (PSL) is sufficient then he must be happy with the amounts the public purse is paying to PSLs.
Hence Grant Shapps is happy that:-
(a) PSL receives 77% more in HB/LHA than a council landlord receives
(b) That the in payment amount of HB/LHA to PSLs went up 7.25% last year
(c) That in the last year 25% more PSL tenants claimed HB/LHA than the year before (<4% increase in social housing)
And in general that the current regulatory system that allows PSLs to:
(d) Give less security of tenure to tenants
(e) Often supply inferior accommodation to tenants
(f) Has no mechanisms for recording complaints and collating such complaints
...is sufficiently ‘added value’ for this 77% premium.
Is Mr Shapps happy that this premium to the public purse of invariably lesser quality goods and services is worth the additional £52m each week it costs to the public purse? Or the additional £2.7bn – yes billion each year this costs the taxpayer directly?
Of course the additional cost to the taxpayer is more than that as it needs to include the costs of homeless applications made when ASTs come to an end in the private sector and usually because PSL has found another tenant to pay more, or as Harry suggests have complained.
I could of course cite the many other public purse costs associated with poorer quality (virtually unregulated) PSL stock to the health service etc. But let’s just stick with the obvious fact that Grant Shapps is happy to see the public purse pay a premium of £2.7bn each year to the PSLs.
Does the above come under or ever have come under scrutiny? It appears not and as a result PSLs are more than happy to continue to keep their services comparison free from the social rented sector.
Mr Shapps is clearly looking after his own party supporters here and negating the national interest - Yet take that political comment aside and look at what Mr Shapps said.
He believes that local authorities have the necessary powers to rid the housing sector of bad landlords. They may have but at what cost to (again) the public purse?
The only way to find out whether PSL delivers good bad or indifferent housing is to regulate it and check that stock. That can weed out the bad or rogue PSLs.
However, im amazed at the Tories taking this line. If the 'red-tape' and bureaucrasy that social landlords face produces good quality housing at 77% less cost, just how much profiteering is going on with PSLs?
Arent we told that (a) the private market delivers better and always can? It doesnt here does it? And (b) arent we informed regularly that social housing has been paid for many times over by social tenants and therefore RTB is correct? Well if PUBLIC housing can do that with its much more burdensome regulation and at 77% less cost why cant the PRIVATE sector?
Surely that is the question in political terms? yet in cost terms Mr Shapps, why is your (national interest anyone?) government prepared to pay £2.7bn per annum extra for this?
Will you look at this if a further 25% of PSL tenants claim HB/LHA this year as they did last?
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Anonymous | 15/06/2010 12:27 pm
Isn't Mr Shapps looking for the private sector to run social housing?
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Anonymous | 15/06/2010 10:04 pm
Why can't the local authority planners not have an involvement in student lets, they clearly are not going to be pushed with planning applications from RSL's over the next couple of years are they? Probably be made up with the work!
As for the private sector well, we RSL's over the years have come under increasing pressure to build properties and maintain to a standard of ecological soundness, reducing fuel poverty and social exclusion. Private landlords don't need to do any of this and get double the rent levels. We are attempting to plat fog with chop sticks blindfolded...
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