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National Audit Office report: Regulation of private renting

Regulation of private renting

This report examines the extent to which the regulation of private renting supports DLUHC’s aim to ensure fairness for renters.

Background to the report

There are an estimated 4.4 million privately rented households in England. While most tenants have a good experience of renting, those who do not may find it contributes to serious illness, financial issues or homelessness. The Department for Levelling Up, Housing & Communities (the Department) aims to ensure the rented sector is fair for tenants, and to protect them from such harms. It legislates and creates policies used to regulate the sector. While the Department sets the overall policy and regulatory framework, local authorities are responsible for regulating the sector and ensuring landlords comply with legal obligations.

The proportion of households in England living in privately rented accommodation has approximately doubled in the past 20 years, and the sector faces several challenges:

  • On average, private tenants spend more of their income on housing (32%), compared with those living in their own properties (18%) or social housing (27%).
  • The market is increasingly populated by low-income groups, benefit recipients and families, whose access to other housing options may be limited.
  • In around 29,000 instances in 2019-20, households were, or were at risk of being, made homeless following an eviction that was not their fault.
  • Many local authorities face funding pressures, which can constrain their ability to check properties proactively for non-compliance and therefore places greater reliance on tenants being aware of their rights and reporting problems.
  • The sector is highly complex and shaped by intersecting policy areas across government that affect the supply and demand of rented properties. This includes areas outside the Department’s remit, such as energy efficiency standards, benefits and welfare, and judicial processes for tenant complaints.

The Department recognises that challenges within the sector affect how it should be regulated, and it is planning large-scale reforms to help address these issues. It has committed to publishing a white paper in 2022, which will provide further details on the proposed reforms.

 

Scope of the report

This report examines the extent to which the regulation of private renting in England supports the Department’s aim to ensure the sector is fair for renters. The report covers:

  • the coherence of the Department’s regulatory strategy, and whether this is based on a good understanding of the challenges within the sector;
  • the extent to which the Department’s oversight of and support for local authority regulation of providers (landlords and lettings agents) contribute to its aims for the sector; and
  • whether tenants are adequately supported to resolve problems and ensure they get a fair deal.

 

Report conclusions

There is evidence that a concerning proportion of private renters live in unsafe or insecure conditions with limited ability to exercise their rights. In recent years, the Department has made various regulatory changes aimed at improving experiences for renters, including banning letting fees and introducing temporary protections during the COVID-19 pandemic.

However, the way that private renting is regulated means that these changes are not effective in ensuring the sector is consistently fair for renters. There are differences in the extent to which landlords comply with the law in different regions, and tenants from certain demographic groups experience worse property conditions or treatment. The Department is not proactive in supporting local authorities to regulate effectively. Furthermore, it does not yet have a plan to improve the significant gaps in data that prevent it from identifying where problems are occurring, which regulatory approaches work well at a local level, or the impact of regulation on the vulnerable. The Department is developing potential reforms to the sector and plans to publish a white paper. As part of this work, it will need a clear vision for what it is trying to achieve and an overarching strategy for how to address the challenges raised in this report, working across central and local government where necessary, if it is to meet its overall aim to provide a better deal for renters

 

Publication details:

ISBN: 9781786044037 [Buy a hard copy of this report]

HC: 863, 2021-22

Published date: December 10, 2021