Good morning, everybody. Welcome to the Housing, Communities and Local Government Select Committee. I am Florence Eshalomi. I am the Chair of the Committee. I will ask my colleagues to introduce themselves.

I am Maya Ellis. I am the MP for Ribble Valley.

Good morning. I am Andrew Lewin, MP for Welwyn Hatfield.

I am Sarah Smith. I am a Member of Parliament up in Hyndburn.

I am Will Forster, MP for Woking.

I am Lee Dillon, MP for Newbury.

I am Lewis Cocking, MP for Broxbourne.

I am Gagan Mohindra, MP for South West Hertfordshire.

I am Andrew Cooper, MP for Mid Cheshire.

Can I ask our guests to introduce themselves, please?

I am Kate Markey, CEO of the Nationwide Foundation.

I am Nye Jones, head of campaigns at Generation Rent. We campaign for private renters.

I am Deborah Garvie. I am policy manager at Shelter.

I am Anny Callum. I am the head of policy and politics at ACORN, the renters and community union.

That is fantastic. Thank you for joining us this morning. Housing conditions, housing rights and renters’ rights seem to be in the news. There has been really good news over the last few weeks. We have had Royal Assent for the Renters’ Rights Bill, which was one of the key planks for the new Labour Government in their manifesto and in the King’s Speech last year. That received Royal Assent last Monday. The main objective of the Bill is to make sure that conditions for private renters are fairer and that they can report some of the appalling conditions that we as MPs see in our inbox from tenants right across the country. So my opening question to the panel is, how successful do you think the Renters’ Rights Act will be in driving up the standards of privately rented homes?

We are delighted that the Renters’ Rights Act has finally come through. It will empower some tenants to speak up and complain about conditions, which they were previously scared to do for fear of a retaliatory eviction. We have come across that as a union time and time again. We are also really pleased to see the Act say that it will extend the new minimum standards of the decent homes standard and Awaab’s law to private renters, although we are really disappointed that we do not have a clear timescale for that at the moment. For us, the key area that is missing from the Act and that we think will still be a deterrent for renters to stand up for their rights and against poor conditions is the fact that it does not go far enough on rental affordability. We would like to see much stricter controls on how much rents can go up. We are concerned that economic evictions, or landlords raising rents to levels that their tenants cannot afford, could be used as a backdoor mechanism to retaliate against a complaint. We worry that some renters will still fear enforcing those new rights.

Do you think that one key plank in the legislation is to prevent the bidding that a number of tenants complain to us about, where they have been asked to bid for properties against other tenants? Do you think that that will help in terms of affordability for private tenants?

It will be helpful in accessing housing, particularly for private tenants who are on a lower income. We know from our members that if you are on a lower income, have children or are claiming benefits, you will find it a lot harder to compete for a home with other tenants who do not have those sorts of things going on in their lives. The rental bidding ban is fantastic. However, it does not protect those tenants, once they are in that tenancy, from having a rent increase put to them that is too much. Yes, the tribunal is there, but we do not feel that that is particularly accessible to every tenant.

I completely agree that the Renters’ Rights Act is a vital first step in addressing the power imbalance between tenants and landlords. It will enable a lot of tenants to hold landlords to account on poor conditions, without that fear of a retaliatory eviction. Anny makes a really good point that revenge rent hikes as an eviction process will become a thing. We were really keen to see some sort of limit through the Bill on how much landlords can raise the rent, but the Government have continually referred back to the first-tier tribunal process as the way to stop that. Our polling has shown that nearly seven in 10 renters either have never heard of, or know very little about, the tribunal. The tribunal really does not see very many cases at the moment. Where it does, it uses market rents as a determinant. We know that, on average, renters nationally are spending over 36% of their income on rent, and much more in London, Bristol and places such as that. We would be concerned that retaliatory evictions will continue as economic evictions. Without tribunal capacity and knowledge, that will continue to happen and renters will not be able to hold landlords to account on conditions.

Are there situations where landlords’ costs may have increased, so in some cases they will increase the rent? Where you have the good landlords who actually engage with their tenants from the start to discuss rental increases with them, would you like to see more of that happening? What would you say about that?

Our model for capping rents is based on inflation or wage growth, so it gives landlords some scope to increase the rent in line with costs, but not to make unaffordable rent hikes, which we see often. Our concern is that we will see more of those once section 21 is abolished.

It has been an absolutely momentous week. Last week we had the Renters’ Rights Act and Awaab’s law. The Renters’ Rights Act was long campaigned for. I agree with colleagues: it is going to be an absolute game changer for tenants, particularly people who would otherwise be homeless and have very few choices and options. Nobody lives in poor conditions out of choice. It is usually out of desperation and lack of other options, so it is absolutely fantastic that people will not have that retaliatory eviction hanging over them. It is obviously very important that the Act is implemented quickly, because people are very worried right now, but it is fantastic and a real important change in rights. In terms of conditions, I would agree again. The big thing that people fear, as well as retaliatory eviction, is, “If I complain about the conditions and my landlord has to spend quite a bit of money rectifying them, that will be reclaimed through a big rent hike and I might not be able to afford it, so the home will be done up for someone maybe more affluent than I am”. For the person living in those poor conditions, there is a risk that they would not be able to afford the rent hike. It is not helping that local housing allowance is frozen at the moment. If your rent increases, the help to pay your rent certainly does not. There is still that big risk, but these are really important changes.

Kate, you have mentioned previously that the Act does not go far enough in addressing the multiple interconnected areas of poor housing conditions in the private rented sector. Do you think that this legislation is the best way of addressing those things?

At the Nationwide Foundation, our focus is on long-term strategy around decent and affordable homes, so we massively welcome the Act, particularly around the end of section 21s, the introduction of rolling tenancies, and the introduction of Awwab’s law and the decent homes standard. I would refer to some research that the Nationwide Foundation did in Scotland, looking at the rental reforms that happened there. This was RentBetter research that was talking to 1,000 landlords and tenants over five years. Some of the key things to note are around confidence of tenants. Our research found that, even when the reforms were introduced, few of the tenants—so 10 of the 1,000 people questioned—had had any contact with their local enforcement officer. Only 1% of the cases taken to first-tier tribunals were about rental increases. We also saw that, in one in five properties post the legislation being introduced, there were still evictions on sale of property, with that sale not then taking place. There is a real point here about enforcement, and that aligns with thinking about implementation as well.

Everyone, right across the sector, recognises that these are big steps. When do you think will be a good time to assess whether this legislation is actually having an impact and working?

That depends on the implementation. We certainly have some concerns about some of the consultation deadlines that have been given. I would urge the Committee to consider what metrics you might want in order to monitor the implementation of the Bill, because of the scale of change and how long it is going to take, particularly around the decent homes standard and on evictions. We have some ideas, and I am happy to forward those on afterwards.

That would be good. Thank you.

The latest English Housing Survey estimates that one in five homes in the private rented sector are non-decent. That means that, if you are a private renter, you are more likely to live in a non-decent home than in any other tenure. That being said, 20 years ago the figures were even worse. It was almost half of homes in the private rented sector that were non-decent. I am interested in how you would characterise the condition of the private rented sector at the moment?

Renters are forced to live in drafty, mouldy, damp homes that are dangerous to their health and really impact their mental health as well, and we pay through the nose for it at the same time. You mention the one in five stat, but under the revised decent homes standard that has been proposed, it will jump to over 40% of private rented homes, which is shocking. It is almost one in two renters living in a non-decent home. I spoke to a renter recently who moved into a home, paying £1,250 a month, which was more than half her salary, in south London. The damp and mould was so bad that she got eczema around her eyes, could not breathe and had to sleep in the living room. She kept complaining to the landlord. Eventually, after just four months, the landlord issued her with a section 21. We are living in these substandard homes, with no power to hold landlords to account to improve them, which the Act will improve. At the moment, you cannot really dress it up: it is a real scandal.

We see the most terrible conditions—really very serious, life-threatening hazards that need to be rectified very quickly, but that also just wear you down and, as you say, impact mental health as well as physical health. When there is damp and the smell of damp is in all your children’s clothes and soft toys and in all your belongings, and when every time you come home the smell, disrepair and endless grottiness hits you, it just entirely wears you down. On top of that, when you try to get anything done about it, even if you are able to access legal advice and advocacy, there is the time that it takes and how determined you have to be to deal with it. Obviously, you are taking the risk at the moment of no-fault eviction or potentially a big rent increase you cannot afford, and that by trying to improve standards, you will lose your home. There is all that worry and fear, particularly for people who are at very grave risk of homelessness and have to take what they can get.

It is absolutely scandalous what our members and renters are having to put up with in some of the homes they are living in. I would like to add in some experiences of our members. I have had one say that they have lived in 13 to 14 different places over the last 12 years and every single one of them had issues with damp or general neglect. They say that they feel unrooted and it is damaging their mental health. They want to feel connected to their neighbours and the local history of their area, but every time they have started to feel that, the rug has been pulled out from under their feet, either by a landlord giving a rent increase they cannot afford or by a section 21 no-fault eviction. They are moving from pillar to post, to houses that have rotting doors, are cold and are not allowing them to thrive, and it is not fair. That is an indicative case study of what a lot of renters’ experience is.

One of the interesting areas is around the role of financial institutions that are mortgage lenders in this space. I do not work for the Nationwide building society, and I cannot speak on its behalf, but I know that it does physical inspections of its properties prior to mortgage. I would urge the Committee to consider—when you mention different levers in terms of decency—the role of mortgage providers in this space as well.

There were some really powerful testimonies there, so thank you. As a brief follow-up, I am interested in areas of the country where you think this problem is at its most acute. I would assume cities, because we hear that often, but that may not be the case. This is a panel of parliamentarians who represent constituencies all across the country. We are just as interested in rural or suburban, so we are interested in a perspective on that. If there are cases or parts of the country where you think the situation is better and improving, we are interested in that as well.

The decency stats show that the worst-quality homes tend to be in the north of England. It is 34% in Yorkshire, for example, compared to 18% in London. A common theme throughout really poor-quality private rented homes is that they are on the lower-cost end of the market throughout the country, especially with people claiming LHA and people in really precarious situations, who do not have the financial flexibility to hold landlords to account or find another home. We do see, especially in places such as Blackpool and in lots of houses in multiple occupancy, particularly concentrated conditions and issues, but it is an issue across the country.

I would add, again mentioning Blackpool, that in 2023 one in four of the 18,000 private rented homes in Blackpool had a category 1 damp and mould hazard. That is life-threatening, very serious damp and mould. Blackpool also has the lowest life expectancy in England and the highest proportion of residents who are disabled. Definitely there are particular localities, but even in more affluent cities, people who need a family home and have very little money to afford to rent one, as I have already said, have to take what they can get. You still see diabolical conditions, even in the most affluent places.

One of the important things here is the opportunity that the database, or the landlord register, will provide in this scenario. This is an opportunity for us to get the information that that database holds— proportionate but also detailed—which would allow us to understand much more about different areas of the country. Currently, it is a real postcode lottery for tenants in terms of where enforcement is happening. To give you some examples, in Huntingdonshire there is one enforcement officer to just under 25,000 properties in the private rental sector, compared to Nottingham, which has an enforcement officer per just under 270. There is a real opportunity, with the database and how that works, to even out how enforcement operates across local authorities.

There is a last quick question from me. I am interested in whether you think this is fundamentally driven by a lack of choice. If the Government succeeded in, for example, increasing the number of people who own their own home, and built substantially more homes for social rent, would one result be to drive up standards in the private rented sector, because landlords then would be compelled to improve their homes in order to continue to attract people to be tenants?

This is a real example of the interconnectedness between the different housing tenures. We really hope that, when the Government’s long-term housing strategy is announced, there is a clear articulation of what the private rental sector is for. We need a private rental sector, but we need a private rental sector that works for everybody and as an enabler rather than anything else. There is research by the Institute for Fiscal Studies looking at the growing number of people who are on low incomes and who should be in social housing but are actually in private rental and are therefore paying high amounts for low quality. There have to be the means by which they are in the housing that they should be in, and the private rental sector is there for what it should be for.

I would add that building more social homes, in particular, and putting less demand on the private rented sector might have a small impact, but that will be a long time coming, and renters are living in dreadful conditions now. Simply put, landlords have not taken action to improve their homes, because they have not had to. They have easily been able to find tenants due to tenants’ desperation to find housing, and there has not been the stick from Government to force them to take action. That is why we need to see the decent homes standard and Awwab’s law coming a lot sooner than the mooted 2035 to force landlords to drive up standards, because they simply have not done it off their own back.

We are going to move on to standards now.

What you have said is really helpful because I want to ask about standards and particularly the timetable around them. We have already mentioned Awaab’s law and the decent homes standard, but then there is improving the energy efficiency ratings of private sector properties. When do you think that could come in? I know that you probably want to say immediately, but how long do you think the Government need to give the sector to implement those changes, without having negative unforeseen consequences? There needs to be a timetable and an investment programme, rather than rents suddenly shooting up for last-minute costs. How long do you think the Government need to give the sector to make those changes? When can some of our most vulnerable constituents see the impact of that?

Awaab’s law, for example, relates to very significant health and safety hazards, so things that can kill you or make you very unwell very quickly. You have to ask the question: what are you paying your rent for if, in exchange for your rent—which is often not insignificant amounts of money and, as we have already heard, a substantial proportion of your income—you get a product that clearly is substandard according to legal requirements? Awaab’s law is not a new requirement. It is an amendment to the Landlord and Tenant Act 1985, which requires landlords to let their homes without disrepair. That has been an expectation for decades. All that Awaab’s law does is to set the timescales for landlords to respond, so that you are not left constantly asking, “When are you going to come and look at this fire safety hazard? Is it going to take a fire before something happens? When are you going to come and look at the mould? Is it going to take my child being hospitalised?” It is simply to set those timescales. It is not new, in the sense that, if you are a landlord and letting homes that have significant health and safety hazards, you are breaking the law as it already is. That is what I would say on Awaab’s law. With the decent homes standard—I think colleagues will have other things to add—it is what all of us consider to be a decent home. Again, you would have to ask the question: what are you paying your rent for if it is not for what most people would consider a decent home?

I would have to agree that I do not see any reason why Awaab’s law could not come in immediately, as it has just come in in the social rented sector. Maybe give a bit of time for you guys to issue guidance to landlords but, as we say, it is just about timescales, and no one should be living in those conditions past those anyway. So that could come in straightaway. In terms of the decent homes standard, there will be changes that need to be made, but 2035 seems like a crazy amount of time for people to not live in what we consider to be decent homes. If significant changes are going to have to be made to people’s homes to meet those standards, alongside meeting the new energy efficiency schemes, it would make sense to line those things up. Currently, the schemes for energy efficiency deadlines are 2028 to 2030, so it would make sense, from our point of view, for those things to be brought in as soon as possible and concurrently.

I would second that. It seems odd that you have one timeline for 2035 for the decent homes standard, and 2028 to 2030 for the minimum energy efficiency standards. If you talk to landlords, often they want clarity. Those two different timelines compete. Also, who knows politically what will be happening by 2035? I would add that the concept of limiting rent hikes becomes even more pertinent when we are pushing landlords to invest in homes over a shorter period. Renters are by far the most likely to experience fuel poverty; it is more than one in five. If renters are going to enjoy cheaper, warmer homes, we need to see protection against unaffordable rent hikes after retrofit or improvements.

I would echo the comments from colleagues there. Also, in line with the implementation plan, some of the metrics that the Committee might want to consider monitoring, because of the urgency of what we are talking about, are things such as enforcement capacity and eviction rates, so that constituents know what is being monitored in terms of the long-term implementation. We would really urge the Committee to think about that as well.

That is really helpful from all of you, in terms of an instant, very short-term Awaab’s law change and, in the medium term, decent homes and energy efficiency that run together. Would you be concerned, when there has to be refurbishment and investment work in terms of decent homes and energy efficiency, that some housing then has to be taken off the market to do that refurbishment? What impact could that have on roofs over heads and affordability of property?

From our point of view, the point that you make is why it is really important that we see some limits on rent increases. Renters are worried about this. We surveyed our members, and although it is positive that the Government are introducing new standards around energy efficiency, 80% said they were worried that when this happens to their home, either their rent will go up or the landlord will choose to sell afterwards. Renters need to be seen as people within this. When we talk about timetables with the sector, we need to see that as well. Another thing that renters want to see is proper timelines given to them for the works that are going to be happening, so it is not just sprung on them. There is a good process and guidance, set out by Government, to landlords on how to speak with tenants to make that work happen. It needs to be clear that if tenants need to be put up somewhere for a couple of days to ensure that the necessary works can be done, they are not having to pay through the nose for that. That needs to be seen as part of work that the landlord needs to pay for to do the improvements to make their homes reach minimum standards.

If you look at landlord finances, just 42% of landlords declare residential mortgage costs on their tax return. That means that significantly over 50% do not have any borrowing on their properties. If a landlord is having to make significant improvements to their home as a result of this legislation, that is because they have not acted in the past and have been letting out a home that is not safe and is non-decent. If there was a restaurant that was poisoning its customers, people would not go and it would shut down, yet people are living in homes that are poisoning them. Where tenants would need to move out for work, landlords should be pushed to provide alternative accommodation while that work happens.

Do you think there is a quicker win with landlords who do not have a mortgage, in terms of getting them to invest in their property immediately, compared with landlords who have a mortgage, where we then risk them selling up if we hike standards too high too quickly.

If a landlord decides that new regulations are too onerous for them and decides to sell their home, that home is not bulldozed. That home and the bricks and mortar still exist. It could be bought by someone who actually wants to live in it. It could be bought by another landlord who maybe has a bigger portfolio and is more able to abide by new regulations. If a landlord decides that renting out a decent home is not for them, to be honest, we will say bye‑bye to them from the market. We do not need them.

The large majority of very poor quality homes, as you say, are ones without a mortgage on them. Where is the mechanism for oversight and inspection in the short term?

Before I go to my set question, and building on what Andrew was asking about affordable housing, in the last couple of weeks we have had the London affordable housing target reduced from 35% to 20%. What are the panel’s views on that?

Our union feels very angry about this. We feel that developers have consistently underperformed, in terms of doing their bit to bring down homelessness and provide the affordable and social homes that our country needs, and have seen huge profits. It feels like they are being rewarded for poor behaviour. We would like to see greater investment—it is great that we have already seen investment in the affordable homes programme, because we will not be so reliant on developers to provide social homes; that model does not seem to work, and we should move away from it—but, that said, it needs to be the cost of doing business in this country. That needs to be upheld rigorously, rather than letting people off the hook after years of what we see as gaming the system.

When we have spoken with Government and MHCLG about the need to limit rent hikes, they have consistently pointed to two things: the tribunal and the ambitious house building programme that will eventually reduce the demand in private rents. If they are slashing targets and building homes that we know are not affordable for most people in London, for example, what is left for renters? These new expensive homes are not going to push down rents, and there is nothing left for renters in the middle.

We would agree. There is record homelessness. The number of children homeless in England—many of them are London children—can fill a city the size of Oxford. That is how bad things are. I cannot over-emphasise how bad things are. The answer has to be the urgent delivery of genuinely affordable social rent homes, particularly for families. If you need to rent a family home, private rents in London are beyond the reach of public sector workers. These are people who cannot necessarily get higher earnings, and we desperately need public sector workers in London. It is absolutely vital that we get those social rent homes delivered as a matter of urgency. To go back to the question before, if you have a choice, if you have a decent social rent home, such as 1950s and 1960s council housing, a healthy home where your family can thrive, you leave those rogue landlords behind and their business dries up, absolutely. It is to do with choices.

I echo the comments of my colleagues on the human cost of the decision. I am pleased that it is for one year.

It is for two years.

Forgive me. It is two years.

It is three years, until 2028.

Apologies, let me start again. The monitoring and scrutiny is going to be there. Also, there is a clause around potential profit share that is being consulted on. We are talking here about a speculative model of housing and housing development, which is an underlying challenge of how housing is delivered in this country. The measurement and the outcomes of what happens over this decision are going to be crucial in terms of the rest of the country as well.

Going back to the Renters’ Rights Act, to what extent are tenants now in a better position to raise concerns about poor conditions, following the abolition of no-fault evictions and other measures in that Act?

No one is going to be worried about a no-fault eviction. Sorry, I should call it a no-reason eviction. Tenants can still be evicted if a landlord’s circumstances change outside of a fault by them. That is a really clear distinction to make. That will empower them, but those who are on a lower income will still be concerned about rent rises. Another good thing that the Act does is getting rid of fixed-term tenancies, and having open-ended tenancies. Not only does that give someone security for a longer amount of time, but it also gives them the ability to move with their feet. We have had tenants before living in really poor conditions but unable to leave a contract. Landlords say, “No, you need to pay until the end because you have signed this contract.” Now, if you move in and something is horrendous, you can leave with two months’ notice. That is great but, again, that is only if you have the money to do it in the first place. For some tenants it will make it easier, but for those on low incomes who are worried about rent increases, it does not go far enough.

I would echo Anny’s comments regarding the positives. The ending of section 21 and no-reason evictions will be key. With any legislation, changing the law is always the first step. The next step is how it is enforced. We know that councils, financially, are really struggling. The temporary accommodation crisis, which was mentioned, is breaking councils’ budgets and they simply do not have the money to practically enforce these things. For example, there are issues such as the no-relet period. If a landlord evicts to sell or move in, they will be banned from reletting the home for 12 months, but how that will be enforced and whether landlords will be able to abuse that will be key.

We are going to come on to enforcement.

Tenants’ awareness of rights is really critical. Especially those in more precarious situations tend to be really unaware of their rights, be that how to use a tribunal or how to claim a rent repayment order. Using the implementation period—we obviously do not have a date yet—to run a rights awareness campaign for tenants will be really important to make sure they know what their new rights are and how to use them.

As we have said before, it is a huge game changer. It will give people more surety and confidence in their home. It is that gnawing worry where you cannot sleep at night and are fretting about what to do. Every time something drops through the letterbox, you are worrying it is a two-month notice. It will hugely change things for people, particularly people who have very few other options. As we have already said, the big omission from the Renters’ Rights Act, from our point of view, is rent stabilisation. If you truly want to give people security of tenure, it is not just about whether they are at risk of no-fault eviction; indeed, there will still be no-fault eviction if the landlord chooses to sell and so on. It is also about the fact that they cannot be at risk of huge rent hikes. That is true security of tenure. We have achieved one bit of it, but it was a real shame that the rent stabilisation element was not addressed.

Before I ask a question specifically on enforcement, Kate, you mentioned in your research the 50% of non-mortgaged private rented sector homes, which are often in the worst condition. I wondered whether you could say a little more about your understanding and maybe the characterisation of landlords in this country. People think of the individual who has bought one home as part of their pension plan and is renting that out, and then there are the big funds that are doing this at scale. Could you provide context around what we are talking about when we say “problematic landlords” particularly?

To clarify, I do not think I said 50%. In terms of thinking about mortgages, I do not work for the Nationwide building society. That said, for the large majority of landlords in this country, on average they own 1.4 properties, so we are a nation of small landlords. I do not have a huge amount of knowledge about the quality of portfolios of landlords.

We can probably put that to our second panel.

Coming back to the question of enforcement, it was mentioned earlier that there is a real differentiation across local authorities. It is one officer to 25,000 in Huntingdonshire, through to one to every 267 in Nottingham, which apparently is the best. What is the panel’s view on how we should best pay towards the cost of funding local enforcement sustainably in order to have a stronger route for that protection?

The Nationwide Foundation, in partnership with the New Economics Foundation, did some research about the potential of the landlord database. The calculations were that just over £45, as an annual cost per property to register on the database, could actually increase capacity by about 233%, meaning that no one enforcement officer was looking after more than 1,000 properties. That feels like a really equalised mechanism and would give confidence to tenants as well.

I would agree that landlords paying in will help, with database fees, selective licensing fees and that kind of thing. That also needs to be complemented by an up-front funding settlement for councils. Councils strongly enforcing the Bill early will be really critical in showing that landlords cannot get away with contravening the new law, and in setting a deterrent down the road for landlords abusing the new eviction grounds, for example, or other key areas of the law. Councils at the moment are not set up to fund that kind of proactive enforcement and need an up-front funding settlement.

We would also agree that, as it is, local authority enforcement teams do not have the resources they need for existing legislation and requirements. They are often a really unsung service in the council, when actually they are saving lives. When they are doing their job well and are properly resourced to do their job well, they stop people needing the NHS. They have the potential to take huge pressure off the NHS if housing conditions are driving ill health, whether physical or mental. We absolutely need to see more resourcing going into local authority enforcement teams, not just for the new burdens but for the existing work. If you have well-resourced, experienced officers in teams who know how to go about it well, you get really good results. Also, we need to see the landlord database being used to its full potential. For example, things such as the landlord sale no-fault ground will still be a worry to people: “What if my landlord suddenly decides to sell up?” One way that that can be enforced is through that database. If the landlord is required to upload the sale documents, that is the way that you can check whether that is being misused, rather than relying on tenants to do it. There is huge potential for the landlord database and we would really like to see that explored and used.

Can I also point the Committee’s attention to the initiative in Greater Manchester, the Good Landlord Charter? The Nationwide Foundation, with Shelter, did a six-year piece of work called Fair Housing Futures, which brought landlords, tenants and enforcement officers together. What could have been combative dynamics resulted in a really positive initiative that became the foundations for the Good Landlord Charter and introduced a number of local policy changes. The Good Landlord Charter is now, as you probably know, providing that support for landlords who want to go above and beyond, and really want to demonstrate their strong compliance. A piece of work that we are doing now, going back into Greater Manchester, is working with those landlords, I guess in the middle, with TDS. We are looking at whether the non-compliance is out of lack of information or support, or a perception that it is going to be too expensive for them to do. That is something, again, that we would be very willing to share with the Committee in time.

With the enforcement, I would echo calls for landlords to pay in via the database or licensing schemes, but an up-front Government cash injection for local authorities is also really important. Over 10 years, we have seen councils not enforcing the powers they already have and not using them to the extent that they already have. We have seen people become homeless as a result of that. For example, in Oxford recently we have had several cases of people reporting things to the council, and their landlords getting an incredibly light touch and being given six-month informal deadlines to deal with things such as holes in the floor that are letting slugs into people’s kitchens. That is something we are working on at the moment. The formal improvement notices are not given. We are seeing this light-touch action, rather than stamping out bad practice, across the country. Some of that might be political will, but I think a lot of it is under-resourcing. There is an issue of not just how we resource these new burdens but also how we use this as an opportunity to beef up the powers that councils already have.

There are clearly some terrible landlords out there and there is an issue with enforcement. Kate, you have an example of Nottingham city council and Huntingdon council. Obviously they are very different. Nottingham probably has a budget of £300 million. Huntingdon is probably £15 million. They are rural and urban, with different populations. Do you have any more comparable examples so we can understand like for like, because those two councils are very different?

I do not have any with me, but I can definitely follow on.

Thank you very much for some really good suggestions and food for thought. There are some questions that we may pose to the new Secretary of State in a few weeks as well. That was really insightful. I will bring this panel to an end.   Witnesses: Dr Jennifer Harris, Ben Beadle and Timothy Douglas.

Welcome to the second part of our session on the conditions of homes. Could I ask our guests for this second panel to introduce themselves, please?

I am Ben Beadle, chief executive of the National Residential Landlords Association, which is a membership organisation representing over 110,000 members—landlords and agents—providing about a million homes in the private rented sector.

Good morning, and thank you very much for the invitation to attend today. I am Timothy Douglas. I am the head of policy and campaigns at Propertymark. Propertymark is the UK’s largest professional membership body for property agents. We have 19,000 members across the UK, representing 12,500 branches. In the absence of mandatory regulation, we have a scheme of voluntary regulation with our members.

Hello. I am Jennifer Harris. I am head of policy, research and social impact at the TDS Charitable Foundation. This is an independent organisation that works to raise standards in the private rented sector, including by funding a range of research projects, much of which I am going to speak to today.

I am going to kick off with some general questions around the Renters’ Rights Act. Ben, you represent the National Residential Landlords Association, which has recently described the Renters’ Rights Act as the “most significant shake-up of the rental market in 40 years.” How do you expect the private rented market to respond as these reforms are brought in over the next five to 10 years?

It is. It is the biggest change we have seen for some time. There is a lot of trepidation out there, to be honest with you. The best thing that Government can do is set out a very clear implementation timeframe. As I have said previously, the time for carping over the changes is past. This is about making the reforms work, and we want them to work. To that end, the sector needs a minimum of a six-month lead-in period. There are 4.7 million tenancy agreements that need to be updated overnight. There are local authorities that need to be upskilled. There are lawyers who need to know what is going on, not least to be able to find loopholes to fund their fees for the next couple of years. We want to get these changes right. We want the sector to respond positively, but we need certainty. That is what I hope Ministers are going to be able to set out in the coming days.

In terms of actual impact on people being landlords, it does not seem like there has been a massive shift in the last year since some of these announcements have been made. Do you think it will impact how many people choose to be landlords? What are your expectations in that sense?

I am not a scaremonger, so I am not going to say that every landlord is going to run for the hills. I would characterise regulation of the private rented sector as a bit like that game, Buckaroo!—you are loading up so many things and, all of a sudden, bang! You have minimum energy efficiency standards, Making Tax Digital, selective and mandatory licensing, renters’ reform, decent homes standards, Awaab’s law and the threat of rent control. I do not think you can pinpoint exactly one of those things as to why a landlord might leave, but taking them as a collective, if you have been in the business for a long time, you may well be rethinking your options—although you might be rethinking your options because it is coming to the end of that investment cycle, and we must not overlook that as well. I want landlords to have confidence. Some of the stories we have heard previously do not fit with our agenda. I would share the view of the chappy from Generation Rent, saying, “If you are not in the business to do a good job, clear off.”

Jennifer, how successful do you expect the Renters’ Rights Act to be at driving up the standards of privately rented homes?

The Bill has the potential to be successful, but there are a few conditions that currently are not in place to allow that to happen. One is around tenant awareness and education. There is this assumption that removing section 21 is automatically going to empower tenants to report poor property conditions and that, as a result, standards will increase. Our research shows that 41% of tenants do not know where to go next when they have a housing problem that is not being addressed. Even those who say they do, when asked where they would go, say things like, “My mum and dad.” So knowledge and awareness is really very low. The TDS Charitable Foundation has developed an interactive signposting and diagnostic tool called the My Housing Issue gateway. That is endorsed by several of the organisations that have spoken here today across both panels. That is a tool to help tenants access redress and make those complaints efficiently. Educating tenants and informing them of their rights will be key. At the moment, that is not in place.

From a letting agent perspective, our members acknowledge the drive to improve standards. There is some trepidation around the commitment regarding the court system, and whether the grounds are robust enough. I can think of grounds 12 and 13, which are a breach of tenancy or the tenant deterioration of the property. They are still discretionary grounds at two weeks’ notice. Ultimately, letting agents want to see enforcement. We need to see an enforced regime. We heard in the last session that councils are already struggling to enforce the existing raft of legislation and more has been put on them. I would agree with Ben and the NRLA that there is uncertainty. The new tenancy structure allows for open-ended tenancies for tenants, but that also means a potential lack of structure for some landlords and agents to plan their investment going forward. There are costs as well. We will talk about the damp and mould. It is really important that we are not pitting landlords against tenants. Unfortunately, throughout the Bill process—language is really important—that is where we have got to. Will we see a move towards more self-managing landlords moving to agents? Potentially, yes. We know from members in Wales that when the reforms in the Renting Homes (Wales) Act came in—which was a significant piece of legislation, bringing in occupation contracts, new standards and a whole regime—that a large agency in Cardiff said that its fully managed portfolio increased by 10%. We need certainty, information, dates and guidance. We need clarity on what will be included in the written statement and on responsibilities for all parties from the outset of the tenancy. England is still the only place where it is not a written requirement to have a tenancy agreement. Focusing on management and ownership is important. The PRS database will create a register of landlords, but the Bill is still lacking any agent regulation. Anyone can set up a letting agency without any mandatory qualifications or registration requirements. There is a lack of spotlight on the role of an inventory check-in and check-out report. If you have an inventory at the start of the tenancy, it is a condition report that all parties sign up to. It can be quite a substantive, 50-page document, with pictures. It can help resolve disputes and track conditions as you go through. Those bits have been missing. They are fundamental pillars that we do not have in the legislation.

You mentioned that the process of the legislation coming through and the choice of language has been the root cause of creating that adversarial interaction between landlords and tenants. I would push back that, surely, what has caused us to get to this place is that there are hundreds of thousands of landlords who have been allowing people to live in an—you used the word—investment and have not taken responsibility for the fact that that investment is a home for one or more people. They have a clear responsibility to provide a safe home for people to live in. If they do not want to meet that expectation, they ought to spend their money on a different type of investment.

I agree, but there are also hundreds of thousands of tenancies where letting agents and landlords are doing a good job. Are we focusing our attention on what best practice is and what good looks like, or are we pulling out case studies and what is bad in the sector? That is the point. We need to focus more on the role of professional bodies, and what we are doing, and on the role of good agents and good landlords across the country. The Renters’ Rights Act has been around in various guises since 2019, but this Government did not consult on it. There was no White Paper. There is no housing strategy that I can see. From that perspective, that is where we are at.

No, it is absolutely not. On the contrary, Matthew Pennycook has ruled out rent control countless times. I guess I was referring to what I heard in the previous session about other parties calling for rent control. We have to be very careful about that. What we need is to increase supply. The problem is that rents are too high, and they are too high because successive Governments have loaded up additional cost and regulation. That is not a party political point; that is just a fact. That has translated into higher costs for renters. It was touched on in the previous session that Scotland suddenly appeared to be an example of a panacea and something that we ought to follow. I would disagree with that. Scotland is the only place that has a housing emergency. The view on rent control is well established but, as a wider point, there is some perception that the private rented sector has sat on its hands and done nothing. Eighty per cent of PRS homes would pass the decent homes standard. That is up from 53%. The proportion of private rented dwellings with at least one category hazard now stands at 10%, down from 31% in 2008. Ninety-one per cent of private dwellings do not have a damp problem. The proportion of A to C EPC has increased from 23% to 48%. Satisfaction in the sector is higher than in the social rented sector. We stand ready to work with you guys, and Government, to make these reforms a success. Language is important, and Government need responsible landlords to stay in the sector. Section 21 is not the leading cause of homelessness; landlord selling is. We need to make sure that landlords have a going concern. The reason the London affordable home target has been reduced is that those investors cannot make it stack up. I am afraid that there is no such thing as a free lunch, and we need to find a happy medium.

I want to come back to Timothy’s answer to Sarah’s very good question. We are on the record here, so I want to make sure that I understood correctly. We have been talking for about an hour this morning about some shocking conditions in private rented homes. In part of your answer you said that there is too much focus on bad case studies. That may well be your view, but we are talking about tens of thousands of people living in appalling conditions and we have spent the best part of 45 minutes talking about it. Do you really think that there is too much focus on those people suffering in sub-quality accommodation?

From a Propertymark perspective, our members do not want to see rogue operators and poor conditions in the market. Our members are working damn hard every day to provide a decent service. All I was trying to do was make the point that, alongside bad practice, do we have examples of best practice? That is what we are looking for in any debate. It is about saying, “Yes, of course there are still too many homes with category 1 hazards and it is not acceptable, but there is a lot of hard work going on and a lot of good in the sector.” If we have bad practice examples, can we have some best practice examples as well?

I am pleased that you have clarified that there are lots of instances where this is unacceptable. As a member of the Committee, I think that all the Committee would welcome seeing good practice and seeing what we could learn from it, but let us not dismiss the suffering of tens of thousands of people.

We are an organisation, Propertymark, that actually is asking for more regulation. We are member led. We have members on our board and we are asking for levels of qualification, registration and regulation for letting agents in the sector. We actively promote the highest standards. Our members get frustrated when those high standards are not promoted and all we hear about are the worst agents and landlords in the sector. That is a frustration.

On that, Timothy, are you implying, then, that your members need regulation to do the right thing? Would they not want to do the right thing?

It is about a level playing field, though. They voluntarily signed up to be qualified and submit their accounts. We do compliance and audit visits. Not everyone is necessarily doing that, so they are looking for a level playing field, essentially.

I want to come on to raising the standards, which is a similar train of thought to what Will was addressing the previous panel on. We have the decent homes standard, energy efficiency levels and Awaab’s law. Can you talk us through the scale of the work that would be required in your sector to meet those, and the likely cost?

We are very supportive of Awaab’s law, absolutely 100%.

I was not asking whether you support the laws. The Government have said that they are coming in the next decade. The question was what the impact on, and cost to, the sector would be.

As far as Awaab’s law is concerned, you need the support of landlords. It is important. Actually, that is probably one of the least challenging things for landlords to adjust to, because all that that is setting out is a timeframe within which things should be fixed. I cannot see any great problem with that as a responsible landlord, and I suspect that the majority of responsible landlords feel exactly the same. It would be good to have some timelines around that. There will be a cost for those who do not comply. If we put that one to one side, that is probably the easiest thing.

But you do not have a cost. I am after what cost the sector has priced in for this.

This is just a responsibility that responsible landlords have to execute.

It could cost more, because you would have to get somebody out sooner than you would be able to schedule regular work. There might be an increased cost because you have more emergency callouts, for example.

You are going to do that anyway. If a tenant rings me and says that they have a problem, I am going to get it fixed straightaway.

You are, but we know that there is a minority who do not.

Yes, and it is those who will fall foul of it and, effectively, incur an additional cost. I do not see that responsible landlords are suddenly going to have to do anything more quickly, to be honest.

What about the decent homes standard?

The decent homes standard is a great opportunity to bring together some of the existing regulations. What we must not forget is that this is not an under-regulated sector.

You did your Buckaroo! analogy earlier. That is fine.

I have plenty more where those came from. I am here all week. We have 170 pieces of legislation.

Sorry, Ben, but if the private rented sector and the social sector were not failing, the legislation would not have been tabled. We have to agree that there is a problem in this country with some social tenancies and some private rented tenancies, and the behaviour of landlords. That is why the Government have acted and have had fairly wide cross-party support on most of the direction of travel of this legislation. I am after cost answers.

Have you carried out a survey with your members on potential costs, Ben?

If I talk about energy, yes, absolutely. I will come back to the decent homes standard, because my point is that it is an opportunity to bring together 170 pieces of regulation that already exist. As I say, 80% already comply, so we are almost there, versus 90% in the social sector. Yes, there is the opportunity to do better, but we are not going to be asking landlords to do anything other than to fulfil their legal obligations.

The Government are estimating that the average cost to meet the proposed standards equates to just under £7,500 per dwelling. Is there a ballpark figure that you have been discussing with members? We keep hearing that all this additional legislation is going to drive landlords out of the property market. We do not want that. We need landlords to address the housing crisis. Essentially, what my colleague is trying to get to is whether you have quantified what this new legislation will mean to your registered members, many of whom we accept are doing good things. Equally, some are still doing bad things, hence why we now have the legislation.

Yes, I accept that, and I accept that the key part of the decent homes standard will be how energy efficiency fits into it. What we want to see there is a tapered cap that factors in the different cost of housing across the country. You could be asking people to pay £15,000 for an asset value of £125,000 in Burnley, versus £1.3 million in Kensington. That is the biggest concern that we have when it comes to the decent homes standard. The average was about £7,000. We want a graduated cap linked to house values, so that it is fair and proportionate and goes some way to addressing the inequality of capital values. I hope that that answers your question.

No, not really, but that is fine. It was a question on the cost to the sector. It was either, “Yes, we know the cost to the sector,” or, “We don’t know the cost to the sector.”

We have not done any work on that. We do not have a cost. As Ben was saying, when we talk to our agent members, the decent homes standard is not too much of a concern, because they are already striving to adhere to those standards. They are already onboarding landlords and doing ownership checks before they take on that property. They are doing an inventory check-in and check-out. They are doing inspections in month 3 and month 9. That is what a decent property agent should be doing and what we are pushing to do. If that could be supported through mandating inventories and letting agent qualifications, that is the sort of proactive stuff that we are talking about. Where the concern for agents comes in is that the decent homes standard, the MEES element and the Awaab’s law element are bringing in more specific parameters and solidifying a legal framework for property conditions. Again, it is not necessarily a problem; it is about levelling the playing field and driving things up. The issue that members are concerned about is the capacity, certainly on the Awaab’s law element, to get a damp and mould specialist and the acceptance by both landlords and tenants of an independent report. An agent is a facilitator; they may be a quantity surveyor or a damp and mould specialist, but essentially they are a facilitator. The timeframes are there, which is fine, but it is about the workforce plan. Can they get a specialist in their area? What happens if the timeframes for getting a specialist do not work with the statutory timetables? How many quotes do they need to get? Could the Government support them with a statutory form to fill in, which goes on the CRM system, so we have that codified process? That is the worry for agents. It is not necessarily responding, but the speed and the capacity of that. If you have damp and mould specialists working in both the private and the social rented sectors, I would imagine that, in certain areas, there might be a squeeze on that. On average, properties in the social rented sector are modern. They might have supply chains. Smaller agents are going to have to build that capacity in. Finally, on the MEES element, the Government have said that it would cost, on average, around £6,000 to meet those requirements, but industry estimates that to be higher. Certainly, to get a property from D to C, you are looking at £8,000 to £10,000. Even if it is a new property not already in the sector, maybe at G or E, you are looking at double that to get it towards C. That is a concern.

In terms of impact on the sector, I just want to draw attention to the diversity within the landlord population. Our research speaks to the different impacts that these things might have. There are variations in terms of awareness. If we talk about the new proposed energy efficiency standards, which will form part of the decent homes standard, 81% say that they are aware, 60% that they have done work already, and 70% that they are confident in meeting those new standards. That is a significant proportion of the landlord population. When you look at the groups of landlords who are less confident, less aware and less likely to have done work, income is a really key factor. About 7% to 8% of landlords are living on a lower income, so that is a variable that will impact their ability to adhere to the new standards. In terms of size of portfolios, 43% of landlords have just one property. They vary across all those dimensions as well, so we need to talk about that group. In terms of time spent in the sector, landlords who have entered the market within the last three years are significantly more likely to be aware, to have tapped into different information sources and to be confident to keep up with changes to the law, and are twice as likely than people who have been sector for 11 years or more to have done work already and to have made energy efficiency-related changes to their property. When we are talking about quick wins, that was one group that really stood out.

I am my landlord’s MP. He phoned me up said, “Lee, can I have a meeting with you to help?” I said, “Tony, what is it?” He said, “Do I need this licensing arrangement?” I said, “No, our council doesn’t have it. You’re good,” but there is concern about these individual landlords who hold just one and do not have that specialism. That is exactly where—Timothy, you are correct—they should be using professional letting agents.

Or the information that Ben and his organisation has.

To give an example of costings on the damp and mould element, I was speaking to an agent in south London who was trying to resolve damp and mould in a property where there was poor ventilation. There were bags. Windows were boarded up. The tenant avoided scheduled property inspections. To resolve all that, and to fully treat and redecorate the property, cost £3,500. Ultimately, there is an ongoing cost in investment, but then there are sudden shock costs that need to be factored in.

I would like to build on what we were talking about and to look at the potential impact of the new regulatory standards on the private rented market. We have talked a bit about the decent homes standard and about Awaab’s law. We have heard evidence this morning that one in five private rented homes do not currently meet the decent homes standard. When the new decent homes standard comes in, it will be more like two in five. In the north of England alone, there are something like 1.2 million homes that do not meet the decent homes standard, which is about 34% of the England total. I just want to come to you first, Dr Harris. Landlords will have a choice with this. They could absorb the costs themselves, they could pass the costs on to their tenants, or they could dispose of their properties. What factors are likely to influence which direction they go in?

One thing that is going to impact what direction they go in is what part of the market they are operating in. What our data shows, which supports English Housing Survey and census data, is that the sector has remained largely stable, with a similar number of landlords entering as exiting, but those in the more affordable part of the market have been shown to be more likely to sell. I am not sure whether that exactly answers your question.

Could the reforms adversely affect supply in particular parts of the country? You talked a bit about how, at the lower end of the market, it might have a bigger impact. Do you want to build on that?

Yes, sure. Our data shows that landlords who rent specifically to tenants in receipt of housing benefit are two and a half times more likely to have sold properties in the last year, and the year prior showed a similar trend. While the survey does not show direct causation, there are a couple of indicators as to why that might be happening. Our survey shows a reluctance to continue to rent to housing benefit claimants because of perceived financial precarity. We know that, with the LHA rate being frozen, the amount of rent that tenants need to cover, in excess of what they are given in housing benefit, is becoming higher and higher. We also know that the main driver for landlords who leave the market is recent and upcoming regulatory changes. In the Renters’ Rights Bill, there is a removal of some risk mitigation strategies that landlords across the board use, but particularly landlords who operate in that part of the market—for example, asking for rent in advance. About a third of landlords ask for that, but 50% of landlords who operate in that part of the market ask for rent in advance. That risk mitigation strategy is going to be removed, so that might be one of the reasons why landlords are becoming more risk averse and less likely to rent in that part of the market, but I would say that the LHA freeze is probably the main driver as far as our research is indicating.

Have you seen that effect exacerbated in one part of the country over another particularly?

No, not in the research that we have collected.

It comes back to supply, to be honest with you. Because rents are set by the market, even if a landlord wants to fully offset all the costs that are out there, they will be precluded by other properties that are on the market. It is as simple as that. They may well look to pass on some of those costs, but they may not be able to, and this is one of the things that the Act does not really address. It is very much refining, changing and reforming all elements of the sector, but there will be some supply challenges that play out, such as landlords being unable to afford to upgrade their EPCs when that comes in. I do not think that it is a given that everybody is going to put up their rents. It is a possibility, but until about two years ago, most landlords—about 70%, according to the English Housing Survey—never increased their rent in tenancy. We have seen things play out quite differently because of supply challenges and costs and so forth, but it is not a given that everyone is going to put up their rent. I do think, as Jen says, that landlords are going to be more selective about the tenants they rent to, because they are no longer able to mitigate some of the risk, and that is a problem.

I would agree with that. The Renters’ Rights Act already has mechanisms baked in to slow down rent increases, from the measures on bidding, to the 12 months for a statutory process to raise rent and capping rent in advance. Those mechanisms are baked in. In certain parts of the market, if a landlord is currently not operating at market rents in their area, they are probably now thinking, “We have not raised the rent for a few years. We might need to do that,” before perceived restrictions kick in, in terms of being able to do that only once every 12 months, when the Act and the other measures come into play. Ultimately, we are at a bit of a crossroads in certain parts of the market. There is a cost to regulation, and landlords and agents will be working that out, but rents are, of course, constrained by high-price areas to some extent. In London, they can reach only so high, but in parts of the north-east, where property values are perhaps lower and there is more scope to get a rented property, prices are a bit lower and a bit steady, so there is a geographical element to it. On the demand side, our monthly snapshot shows that, on average, we have eight tenants vying for every property.

We heard quite some concern this morning from the previous panel over how the tribunal will operate and, following on from that, calls for rent controls or limiting rent increases to CPI or wage growth. To what extent would it have an impact on the supply of privately rented homes if one of those came into effect?

When index-linked rent control comes in, I would certainly look to Scotland, where we have done a lot of work with our members. The Scottish Government introduced rent caps during the pandemic, and what did we see? We saw that rents in Scotland were the highest across the UK, because it had a detrimental effect on investors. It was also because of the threat of a framework for long-term rent control, which they have introduced under the Housing (Scotland) Bill. What have they had to do since introducing that regulation? They introduced the Housing (Scotland) Bill, which allows for local authorities to produce a report on rent control in their areas every five years. They have had to bring in CPI because build-to-rent investors and landlords were leaving the market, and there was no investment appetite for Scotland, so they have had to renege on rent control. They have also had to consult on exemptions for energy efficiency, or exemptions where a landlord who has not raised the rent for 10 years needs to put in new facilities, because the costs just do not stack up. Let us avoid rent control, please.

Ditto. I would agree with Matthew Pennycook, who has been unequivocal on this. What problem are we trying to solve? Rather than just suggesting that rent control is the answer, we need to increase supply. There are already some measures within the Act that, while not rent control, are certainly rent suppression, such as the tribunal. Rent increases will kick in only from the date of the hearing, not the date of the notice. There will be no barrier to challenging. The question is, “Why wouldn’t a tenant raise an application to challenge their rent for a free service?” We have to be very careful about this. Rent control stifles supply. It affects confidence and has the detrimental effect of giving landlords the impression, “That is what I can go up to, so I am going to.” We want to get away from that. We have to increase supply and to make sure that the environment is inviting and safe for renters. We need to find that right balance, but rent control is absolutely not the answer. I am afraid that banning bidding wars is not going to work either. I understand that landlords and agents must be transparent about their rent, but if you have 12 people chasing every available home, it is often not the landlord who is saying, “I want more.” It is this frenzy of a lack of property and a lack of choice that makes people do weird things, and I would rather they did not feel that they had to. The rent that you see is the rent that you should pay.

Just on that, Ben, I have had experiences of people saying that, essentially, they will get the property if they can pay six or 12 months up front. That is the cost of a deposit; if people had that money, they would go and buy. They do not have that money, so they are renting. They need that service from a landlord.

I agree.

Equally, would you not argue for your members that having a long-term tenant is much more reliable than having to change every year, with the costs associated with that? If you and that tenant agreed that, for the next three or four years, it is going to be x amount of rent, that is security for that landlord, and you are more likely to get a tenant who would then respect, and make sure that they keep to, their part of the contract. Would you not say that that is good for the sector?

Florence, you are preaching to the choir here, because that is exactly the type of thing that we would expect. The Renters’ Rights Act will force landlords to have more honest and straightforward conversations with their tenants, and I would absolutely encourage that. I do not want six or 12 months’ rent up front. I just want someone who is going to stay. That is what the vast majority of responsible landlords want. Because we have such a heightened supply crisis and such demand, people are trying to differentiate themselves in the marketplace and are saying, “I can give you six or 12 months’ rent up front and I am going to be better than that person who is going to give you only one month.” That is the sort of behaviour that we really do not want. We want long-term tenants who are going to look after their property. Twenty quid here or there does not really cut the mustard for me.

I just wanted to come in. This might go some way to answering your earlier question. In terms of rent increases, last year, 56% of landlords said that they increased the rent. The main reason was rising costs for property maintenance and running costs. When looking at landlords who might be more likely to raise the rent as a result of the new standards, we need to look at the need to drive some behavioural change in the sector. The decent homes standard and MEES both assume that landlords will be more proactive in managing their properties, but we know that 20% do not carry out regular property inspections, and one in five do not set money aside for repairs. These might be some of the landlords who, when faced with increased costs, will pass that on in increased rents. I am sure that there are other drivers as well. We have those criminal landlords for whom we need better enforcement, but when we have done research with local authorities, unintentional non-compliance is one of the key challenges that they face. We have not spoken today about how that could be addressed through some of the measures in the Renters’ Rights Act.

One of the other things that we will push to Ministers is accidental landlords. You have a situation where some people fall into renting because they may not be able to sell their property, or there may be a life change. It is about what work is going on across the sector to educate those landlords who had no intention of being landlords in the first instance.

There is a recommendation that we have pushed forward to Government. Government have not done a review into all landlord costs and taxes. We do not know what the make-up of rent is. We have had the mortgage interest relief changes. We have had additional rates of buy-to-let stamp duty. The Government need to review that and understand the cost implications, and then you would have better policies. Are landlords, agents, housing providers or not? If they are, let us treat them that way. Let us have a look at the tax situation. Let us encourage the best and outlaw the bad.

The Government have confirmed that. MHCLG has stated that, due to the range of uncertainties, such as a landlord’s rent-setting behaviour and market factors, it is “unable to give a definitive view on how much rent will be passed on to tenants, if any”. That is another question that we will be posing to Ministers in due course.

Moving on now to the obstacles that landlords are likely to face in raising the standard of their properties, what reasonable steps could the Government take to help landlords overcome these obstacles? Linked to that, what role could the private rented sector database play in helping landlords on that journey of raising standards in their properties?

The private rented database has the potential to be a really key tool across the sector, including in educating, informing and supporting landlords. It is supposed to be this one-stop shop, but the truth is that it is probably not going to be in operation until some years after several of the changes being brought about in the Bill. That begs the question: how will landlords be educated, informed and supported to comply with the new duties? Forty-three per cent have one property, as I have mentioned. Most landlords manage their portfolios alongside other forms of employment, and research from MHCLG shows that non-compliance is highest among landlords with one portfolio, so we really need a co-ordinated education and information campaign to educate and support those landlords in advance of the database, as well as through it.

In respect of the database, it will be a really helpful and targeted tool for local authorities, but you do not need double-up. We have seen debates in recent days and weeks around the role of selective licensing, which is, essentially, getting permission to rent your house out without any reference back to standards. The database should and could replace that element. Selective licensing is not needed in its current form. It needs to be far more selective to a postcode than borough-wide, as we see at the moment. That would be a very helpful rationalisation of regulation. If we are talking about making things work, the other thing is around some of the energy changes. We are talking about encouraging the right sort of behaviour. At the moment, replacing a broken boiler is considered a tax-deductible expense, but if you wanted to upgrade to a more energy-efficient heat source, as we want people to do, that is not. It would seem to me that a little nip and tuck in that area and a bit of nudge theory would encourage people to make the right long-term decisions. I would like to see some sort of rationalisation and a look at tax incentives—not even incentives, but just an update to reflect what we want people to do.

Just to pick up on what you said there around selective licensing, you seem to be suggesting that there is a role for that only in particular postcodes and not at a broader level.

Yes.

I just want to challenge that. Certainly in my constituency, we have recently been looking at the specific question of HMO licensing. People are up in arms that, right now, that is focused on a number of postcodes, because their view as a resident is, “That just means that, in my postcode next door, we are going to suddenly see the landlords really pushing and seeking those opportunities there.” It leads to a greater level of inequality in terms of the types of communities and properties that we are building in different areas.

Selective licensing is very different from mandatory and additional licensing, which is what you are referring to, I believe. You potentially have an article 4 direction, where you need planning permission to do an HMO. It is right that that is limited to a particular area. I am not advocating that mandatory licensing is got rid of. Where you have a lot of people in a dwelling, it is right that there are safety standards, that there is a licence and that there is an inspection that is done properly. I have no issue with that. Selective licensing was brought in to be very selective and to manage antisocial behaviour in a particular area. What we are seeing is that, because councils are so strapped for cash—and we saw it last week—somebody who wants to rent their property out needs a bit of paper and to pay 900 quid for the privilege of doing so. That is not improving standards. That is called a cottage industry, and it needs to change.

Before we end, I just wanted to make a quick comment about the property database. The decent homes standard, MEES and Awaab’s law together offer the potential to improve standards, but one thing that they all continue to rely on is a system in which tenants need to complain. They need to raise complaints with councils. We heard in the previous panel that, for many tenants, that is unlikely to happen, even with the removal of section 21. With the database, through the use of UPRNs—unique property reference numbers—we can start to move towards a system where there is automatic checking of documentation, so that councils can be alerted of non-compliance and you start to rely less just on tenants raising complaints.

Yes, I will give a pithy reply. I would challenge that section 21 is without fault. It is just the default way of bringing a tenancy to an end if you want to sell or move back in, which is why I say we should all be concerned about landlords leaving the sector and not feeling that they are able to continue. It has such a knock-on effect on temporary accommodation, and that is why we are seeing the mess that we are in at the moment, particularly as the alternative to getting possession takes about a year, and it is not going to get any better.

It would improve confidence, but how about we take some steps so that people do not need to go into temporary accommodation? How about we say to landlords, “You are part of the solution. If you meet these requirements, there is a role for you going forwards, and we are going to make it easy if you comply”? That is not a controversial statement, but we see local authorities going bust because of the temporary accommodation bill, and it is because landlords are selling. That is the harsh reality.

It depends on the number of people who are available. I have a situation in my own area, where a mandatory licence is taking me 13 months. That inspection took place only because they saw my name, they saw that I was waiting, and they knew what I did. Local authorities are absolutely on their knees, and I would much rather that they did not chase silly selective licensing schemes for the associated fees, but used the 170 pieces of regulation and the HHSRS, where they can bring bad landlords to book. You do not need to wrap it up in a bow with a selective licence. You just need people to be able to respond quickly to complaints by renters. We have retaliatory eviction mechanisms at the moment, where if you do raise a response with a local authority, a section 21 cannot be relied upon. I suggest that we do some of that basic stuff first to support responsible landlords, to bring bad landlords to book, and to look after renters.

We would agree with that. We see a significant variation and an unequal footing for enforcement across the country. We know that local authorities are overstretched. They need funding. There needs to be a proper assessment on what capacity they have. They need to inspect. Inspection league tables lead to enforcement. They need support. The Government need to do a much better job in understanding the resources that they have before we see continual legislation piled on. That goes back to the point about a vision and a strategy going forward. What do we want the private rented sector to look like? What is the role of the landlord? Is it small, big or indifferent? We need that set out to wrap all these reforms around.

Thank you very much for coming this morning. You have given us a few areas that we will definitely be asking the Government for more information on. This is a conversation that will continue for many months.