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What would Labour’s “Consumer Rights Revolution” mean for the private renter?

On Monday Labour announced that if returned to Government, they would challenge rogue landlords in one of many new pledges to put an end to the ‘rigged economy’. In the current housing system where many tenants are left at the mercy of unscrupulous nefarious landlords, a bolstering of tenant rights is welcomed.

The main proposals put forward by Labour are:

  • To introduce minimum standards regarding the state of the property.
  • Giving Councils the power to impose fines of £100,000 for failures to maintain these standards.
  • Giving Councils the power to make compulsory purchase orders as a last resort
  • A free advice hotline for tenants.

To examine how much of a difference these policies could make, we first need to examine what rights privately renting tenants have now. Their options are as follows:

  1. They can bring a claim against private landlords for failing to comply with section 11 and section 17 of the Landlord and Tenant Act 1985 and for any breach of s.4 Defective Premises Act 1972. It can be difficult to obtain funding for such claims as legal aid will only pay where there is evidence of a risk to health and safety. Conditional Fee Agreements are sometimes available but where there is doubt about private landlords being able to pay compensation and costs, some law firms will often deem these cases too risky.
  2. Tenants can report the issue to their local authority who may take action against their landlord. This is a procedure varies from Council to Council but their Environmental Health team should assist. Unfortunately however this is often a long process and the powers available to Councils are limited.
  3. Aside from this, a criminal case may be brought under Environmental Protection Act 1980. This again can be difficult to fund and also requires the disrepair in the property to be to a high degree.

These remedies do give individual tenants sufficient recourse to challenge private landlords’ failure to maintain their property but overall the epidemic or poorly maintained properties persists and it clear something further needs to be done. Labour reports that the large number of substandard tenancies attract £800million in rent payments a month (9.6billion a year), and reportedly £200million of this is paid by housing benefit (2.3billion a year).This demonstrates that the problem is not only one of people’s living standards but also a financial one. What we need is new policy that packs a punch.

Labour promises a minimum standard on property, where there currently is not been one. It is often young people, new to renting, or desperate families who are trapped in these poor quality properties but it could happen to anyone. Either a fixed term contract binds you or the housing crisis is so prominent that for these people the alternatives are limited or even non-existent, and they have no choice but to put up with substandard properties. Living in properties with disrepair often negatively effects tenants’ physical and mental health and most worryingly the health of children. To tackle this, Labour pledge to crack down on unsafe environments, for example, those with exposed wiring or damp. Powers will be granted to local authorities to issue fines of up to £100,000. Newham Council already have a similar system in place whereby fines of up to £20,000 may be levied against landlords. It is understood that this has been successful and Labour wish to roll this model out far wider.

Overall, Labour appear to be taking an approach to housing that recognizes that it is not a simple commodity but the crucial centre of people’s lives. These policies are, in the writers’ opinion, far better than taking a circumspect approach to housing. Leaving the market to manage housing quality, as we have seen, provides rogue landlords the opportunity to exploit desperate renters. With private renting becoming more and more common as social housing continues to be run down, regulation is needed to protect almost a 1/3 of the population. The clout of policies like this will likely spur landlords to engage with tenants earlier to resolve disrepair matters. This deterrent effect will probably relieve strain on Councils who already engage with rogue landlords to no avail as they are ill-equipped and insufficiently funded to do so, and also the NHS which deals with the fall out of people living in inhumane conditions. This could ultimately save money, especially in that hefty fines will be an additional source of revenue for cash-strapped Councils. Lastly and most importantly, standards of living will go up, which must be the ultimate goal.

It is difficult to imagine what the objection to such policies could be. Tenants, Councils and the NHS will benefit as set out above and the only potential losers, the landlords, themselves, can easily avoid any loss by simply maintaining their properties to a proper and decent standard. The Conservatives do not seem to agree and have responded to the policy announcement by stating that this will simply result in increased rents as landlords pass the costs onto tenants. This is an empty criticism as this potential concern can easily be dealt with by imposing rent controls and caps. This is a whole other area for discussion but ultimately with the growing housing crisis fuelled in large part by spiralling private rents, a policy of rent control is needed to address the wider problems of housing in any event.

We look forward to seeing what the Conservatives do propose to tackle the problem of rogue landlords and the large number of substandard properties, many of which are being paid for by the public purse. In the meantime and in the absence of any alternative proposals we welcome Labour’s proposals which we consider have good prospects of addressing a problem which has for too long been left to, in a very real sense, rot.