Rogue landlords and agents ‘incentivised by lack of enforcement in rental sector’

A lack of enforcement of private rental sector regulations is creating an incentive for rogue landlords and agents, a property commentator claims.

A report by housing market commentator Kate Faulkner for the TDS Charitable Foundation, found that despite efforts to improve regulation and standards in the sector, such as the Housing Health and Safety Rating System, a lack of enforcement and compliance by some landlords and agents means that many of the efforts were ineffective.

Faulkner warns that 147 pieces of legislation have been introduced covering PRS, with half unveiled since 1996, but still more homes are classed as ‘non-decent’ in real terms.

The report uses English Housing Survey data to show that while the proportion of non-decent homes – those with reports of issues such as overcrowding, damp, fire risks or dangerous electrics – in the PRS fell from nearly 47% in 2006 to 28% in 2015, the growth of the sector means the absolute number of these properties has increased from 1.2m to 1.3m.

The report said that while much of the legislation introduced had made properties safer – such as rules on gas safety – many tenants are unaware of what acceptable standards are for a property.

It also warns that the cost of improvements can mean rents go up and it is harder for tenants to afford decent homes.

It said: “With a lack of regulation of agents and poor enforcement, this can create a perfect environment for rogue landlords and agents to operate and take advantage of vulnerable tenants.”

Faulkner says income regulation of lettings agents would be helpful, but also suggests introducing mandatory landlord accreditation as well as a clear document setting out their responsibilities.

Letting agents and landlords should also have to follow up regularly with tenants to ensure they understand how to recognise hazards and what they can do to prevent them.

She also suggests mortgage lenders and insurance companies should withdraw funding from landlords until they are compliant with minimum energy performance rating rules.

Faulkner said: “Due to the rising costs to good landlords and a scant enforcement of PRS regulations, there is an incentive for some landlords and agents to act outside the law to increase their profit margins.

“The increased costs to landlords of buying a property, then letting it legally and safely, means that in some cases rents have increased beyond the means of some tenants. Reputable landlords and agents are being penalised financially for abiding by the law.

“It can create a vicious cycle and a two-tiered rental market, which the legislation was never intended to create.

“The problem, as I see it, is that bills are introduced on the sector all the time, but aren’t backed with a communications plan or funding for enforcement.

“Myriad legislation can be confusing for tenants, and rogue landlords and agents often get away with offering sub-standard homes as tenants don’t know their rights.

“In reality, tenants hold the power in terms of accepting or rejecting poor or dangerous properties, although where supply is scant, this power disappears.”

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