Tonight’s C4 Dispatches programme provided some very clear evidence regarding poor standards of accommodation and management in the private rented sector. It is linked to the Shelter campaign to Evict Rogue Landlords. While the individual underhand practices deployed by landlords are very unpleasant, the impact of the programme will be mitigated by the problem that all research in this sector faces – that it is hard to quantify the scale of the problem. If one problem is that no one prosecutes rogue landlords, for example, then the statistics appear to show that unlawful behaviour by landlords isn’t a big problem. The logic is faulty – absence of evidence isn’t evidence of absence – but convenient for those who have no wish to act. The majority of private tenants are happy with their current landlord. But that tells us nothing about how many tenancies they’ve moved on from because of poor treatment by a landlord.
Grant Shapps was interviewed briefly in the programme. His contribution had two key elements. First, he argued that the national registration scheme for private landlords proposed by the previous Labour government ran the risk of becoming a bureaucratic exercise and so was dropped. In fact, his argument here was a little less than clear. But the net result is that this type of regulatory scheme appears to be off the agenda. Second, he argued that there are lots of local authority powers and regulations already in existence to deal with problem private landlords.
This second point is correct but almost entirely irrelevant.
I’ve discussed aspects of regulating private renting on this blog before (eg. here and here). I’ll no doubt discuss it again. The problem with the Shapps position, if we might call it that, is that it completely fails to understand the socio-economic context in which the law operated.
The current system is largely driven either by tenants raising problems with their landlord or with the local authority, on the one hand, or local authorities uncovering problems through programmes of inspection, on the other.
Back in 2007-08 the Law Commission Public Law team, of which I was a member, produced an analysis of the private rented sector and recommendations for future regulation. It argued that because many tenants at the bottom end of the market do not know their rights – and, arguably, can never fully know their rights because many are implied rather than explicit – it is unreasonable to expect them to be able to enforce their rights without radical simplification of the law. While the power differential between landlord and tenant – brought about in part by limited security of tenure and also by excess demand for accommodation – and the length of the legal process mean that only the most tenacious tenants would be willing to enforce their rights, even if they knew them.
Research for the government that I undertook with colleagues back in the late 1990s examining harassment and unlawful eviction provided a raft of reasons why local authorities do not enforce against landlords. They don’t have enough staff. Even back then some authorities only had enough money to take on one or two prosecutions a year. There are difficulties assembling robust evidence. The chances of a tenant staying the course and taking a case all the way to prosecution are small. The penalties handed out to landlords by the courts tended to be nugatory. Local authorities might choose to focus on the serial offenders or the most egregious cases – hoping that these would act as some form of deterrent to other landlords.
Local authorities were also discouraged from taking enforcement action because they could create a problem for themselves. Shutting down a property or enforcing against a landlord could produce a homeless household that the local authority would be responsible for, and didn’t have the resources to deal with. Mediation and maintaining tenants in their current accommodation – even if less than ideal – was a strategy that saved someone somewhere else in the local authority a headache.
The recent dramatic increase in the demand for private renting and the cuts in local authority budgets are not going to make things any easier. The reductions in legal aid for housing cases which are on their way through Parliament will further make it unlikely that tenants will be able to take action against their landlords.
Existing structures and remedies are not effective. In fact, pace Mr Shapps, they are largely irrelevant to dealing with the problems of the private rented sector.
It is for all these reasons that we need to move away from a system that focuses upon the tenant as the trigger for action. And, unless budgets are going to increase significantly, we can’t expect local authorities to proactively deal with a problem that is escalating in size.
Instead we need to focus upon building quality in to private landlordism. We do this by changing the culture of landlordism and tapping in to the regulatory potential of non-state bodies such as landlords’ associations. One of the most interesting developments in recent years is the way in which Tenancy Deposit Schemes have acted, in modest ways, as a regulator of landlord behaviour. It is only through these types of novel regulatory mechanism that rogue landlords are likely to be tackled effectively.