13 Dec 2021

CIH responds to National Audit Office regulation of private renting report

We welcome the National Audit Office's (NAO) report on the regulation of private renting which helps shine a light on the issues facing the sector and provides a stimulus for discussion on work needed to raise the bar for the 4.4 million households who use it.

In its report, released on 10 December 2021, the NAO highlights the considerable gaps in Department of Levelling Up, Housing and Communities' (DLUHC) understanding of the problems occurring within a highly complex sector. The NAO recommends that the department define an overall vision and strategy for regulation of the private rented sector (PRS), highlighting the need for a cross departmental approach. Last month, ministers said they would delay their promised Rent Reform White Paper to wait for the conclusions in this report.

Clarity of vision for the PRS is long overdue considering the number of people housed in it – and it’s often the most vulnerable who pay the price. A quarter of landlords are unwilling to let properties to non-UK passport holders and half are unwilling to let to those on housing benefit. This is concerning when we consider that the market is increasingly populated by low-income groups, benefit recipients and families, whose access to other housing options may be limited.

While most tenants will have a good experience of renting, some will suffer as a result of poor quality housing, overcharging, or poor conduct by landlords and letting agents. An estimated 13 per cent of private rented homes have at least one category one hazard – a serious threat to health and safety – with associated costs to the NHS estimated at £340 million per year. An estimated 23 per cent are classified as non-decent. This is even more shocking when you consider that taxpayer money is often used to subsidise this (over £30 billion a year – 15 per cent of the welfare budget).

The NAO found that the more active a local authority is in inspecting PRS properties, the more likely it is to have seen a better improvement in compliance with issues such as energy efficiency – something that we need to encourage given our commitments on zero carbon. However, the funding pressures – as well as lack of data - faced by local authorities constrains their ability to be proactive when inspecting properties and places greater reliance on tenants enforcing their own rights, which has its own obvious challenges. New enforcement tools are meaningless if local authorities don’t have the capacity to use them. 

DLUHC ‘piecemeal’ approach to improving standards in the PRS will hopefully be addressed, in some part, by the much anticipated Renters Reform Bill. But until government recognises that renting is a permanent reality for millions of people in this country the question remains whether reforms will go far enough and we’ll see any meaningful ‘levelling up’. (We could learn a lot from what our neighbours are doing in Scotland, Wales and Northern Ireland.)

Holistic reform of the PRS is long overdue but we need to stop looking at housing tenure in isolation and look at quality, affordability and redress in the round. Housing providers are at the limits of what can be achieved under existing funding mechanisms, but by giving councils the resource to build 90,000 good-quality social homes a year, we could make a significant dent in tackling a lot of these issues.

As the UK professional housing body, CIH can play a key role in helping to share learning and to equip housing professionals to deliver a quality service.