Safe as houses? It’s time to improve the private rented sector
Tenants at the sharpest ends of inequality live in the most precarious conditions. Here's how lenders could address that.
Housing is a fundamental human need, but too many renters in the UK live in insecure and poor quality accommodation. Private renters are most likely to live in poor quality housing: the 2020 English Housing Survey showed that 12% of private rented properties had the most severe hazards, such as electrical faults, threats of structural collapse and fire, compared to 10% of owner occupied and 5% of social rented homes.
Tenants at the sharpest ends of inequality live in the most precarious conditions. In some cases, they face unacceptable treatment from landlords and have no way of knowing if their home meets basic standards or if their landlord has any past conviction history. They risk eviction if they complain.
There have been some attempts to change this. Scotland, Wales and Northern Ireland all have landlord registers (England is the notable exception). In Scotland, all landlords have to go through a ‘fit and proper person’ test in order to get onto the register, while in Wales landlords must also go through mandated training. Local authorities in England have the power to impose financial penalties to landlords of up to £30,000, and there are banning orders for 41 different offences including harassment, violence and unlawful eviction. Despite this, in the three years to 2021, over 70% of all penalties were issued by just 7% of local authorities, and there were only 39 entries to the National Rogue Landlord database, designed to track banning orders.
Lenders have helped to facilitate the expansion of the private rented sector by offering affordable mortgages and commercial loans for landlords; there is now an opportunity for them to step up and improve conditions for tenants.
Charities such as Shelter have been campaigning for years for stronger measures. Recent government announcements suggest that change may be on the horizon. In February the Levelling Up white paper (PDF) included proposals for introducing a National Landlord Register in England, and a legally binding decent homes standard. More recently, in May the Queen’s Speech confirmed that the new Renters’ Reform Bill will abolish no fault evictions, introduce a new ombudsman to enable landlords to resolve disputes without the need for court proceedings, and put in place a national property portal.
While the government holds primary responsibility, we believe that other actors could play a powerful role in improving the sector. For example lenders, who provide the much-needed financing for landlords to operate, are in a strong position to make an impact. Lenders have helped to expand the private rented sector by offering affordable personal mortgages and commercial loans for landlords; there is now an opportunity for lenders to step up and improve conditions for tenants.
In our report, How can lenders improve the private rented sector?, we outline the various ways in which lenders can work together to support a national register and other initiatives. These include:
- Changing lending criteria to restrict access to finance to landlords who break the law
- Improve landlord guidance using the channels of communication lenders have at their disposal
- Support the design and implementation of a national landlord register in England, building on the announcement in the Queen’s Speech
All of these recommendations will help the most vulnerable tenants, giving them greater visibility, access to support, and higher quality accommodation. There are also benefits for government, landlords and lenders:
- Landlords will have access to improved education and may have to contend with fewer complex regulations.
- The government will have access to better data, and a useful communications channel.
- Lenders, reducing the number of criminal or negligent landlords on their books, will benefit from reduced credit and reputational risk.
Change is essential. It’s time for all those involved in the private rented sector, whether private, public or social actors, to come together to help improve conditions for the more than four million UK households who rely on it.
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