Put to one side the negligence of Kwasinomics, rising mortgage rates, the cost-of-living crisis, Section 21 debates, the violently-changing maths of BTL investment and the apparent slowing of house price growth.

Focus instead on something useful: the Decent Homes Standard consultation which closes on Friday 14^th October. The question is – do you support it? Or is the fear of losing rental stock enough to make you fight on behalf of those landlords who are too lazy, feckless or broke to provide Decent homes?

What is the problem?

Persistent low standards of rental stock. Things have improved greatly in the past 20 years, but the Government says that 21% of PRS homes are still non-Decent against 13% of social-rented homes. 21% of 4.4 million is 924,000 homes. 32% of properties built pre-1919 are non-decent, as are 35% of converted flats. The areas with the lowest rents (North West, South West and West Midlands) have the highest proportion of non-Decent homes; the South East has the lowest. Non-Decent homes correlate with low EPC ratings and damp – 10% of PRS homes have damp according to the English Housing Survey (EHS) which is double the rate of social-rented homes.

What is the Decent Homes Standard?

It is an attempt to introduce minimum standards into the PRS. It has four parts: homes need to be free of Cat 1 Hazards; “provide a reasonable degree of thermal comfort; be in a reasonable state of repair; and have reasonably modern facilities and services.” Note the word ‘reasonable’ – the Consultation tries to turn this subjective adjective into unambiguous standards. It is not perfect, e.g., a roof needing 40% repairs can pass as ‘Decent’ but if you have one chimney needing rebuilding then you fail.

Notably, the obligation is on the owner to meet the new Standard. Failing to do so leads to criminal charges and a ban from letting any property. The Consultation asks for views on how to avoid passing of the buck among rent-to-rent operators and sub-landlords.

The paradox for agents

For those of you adamant that you are not letting or managing any of these 924,000 homes, the situation is simple: support the Standard. The rest of you have a dilemma: would you support legislation which might lose you landlords? I say ‘might’ as it comes down to money, of course. The EHS puts an average non-Decent to Decent upgrade at £8475 and more for properties pre-1919. Will your landlords who have been happy to let a low-quality property now invest over £8000 and stomach the voids necessary to do the work? The latest Letting Industry Council report is full of statistics articulating the shrinking volume of rental stock – how will this affect your views on raising standards across the industry?

The enforcement question

Legislation needs enforcement. That is the challenge with all PRS red tape. I don’t have the answer to creating pervasive, rigorous enforcement, beyond more resources for Local Authorities, and I doubt the Government does either. Hamptons points me to the English Private Landlord survey which says that 49% of landlords who register their own deposits do not use an agent. This compounds the challenge to locate non-Decent homes if they do not even reach the portals. How do you catch landlords hidden in plain sight?

A call to action

I urge you to fill out the Consultation and support the Standard. Yes, it is easy for me to say this given that my (infinitesimally small) portfolio is Decent, and I acknowledge the definitions within the ‘reasonable state of repair’ section are not quite right. I agree with Propertymark that the tax regime needs changing, so that “improvements to property should not just be VAT-deductible but should also qualify as deductible expenses against rental income. This would especially support lower-income landlords with low-value or few properties who would struggle to afford to meet the Standards.”

I see three reasons for supporting the Decent Homes Standard with the maximum penalties possible.

First, every home in the PRS should be safe, warm, clean and free of damp. This might push marginal stock out of the sector (and increase rents, absent of any initiatives to encourage landlords back in) but it is the moral thing to do. Second, the PRS needs to keep professionalising. The more the sector looks professional, and less like a couple of million of amateur landlords, the better. Third, given that non-Decent homes correlate with low EPC ratings, legislation is coming in one form or other. Well, it should be if we ever hear the Govt’s EPC Minimum C Rating plans, but that is another story.

Consultation link: https://www.gov.uk/government/consultations/a-decent-homes-standard-in-the-private-rented-sector-consultation

Dan Channer is a consultant, ex-agent and Visiting Fellow at Cranfield School of Management.