The government has launched a new consultation on plans to introduce a legally binding Decent Homes Standard to the private rented sector, including the possibility of tough new sanctions on landlords who fail to keep properties up to scratch.
In June, the government published its much anticipated Fairer Private Rented Sector white paper, with a key component being the roll out of the Decent Homes Standard to all private rental homes for the first time. This would bring the sector in line with social housing where the standard has been in place since 2001.
Now, the government has launched an open consultation on how to apply and enforce the standard in the private rented sector, which will run for 6 weeks until 14 October 2022. The consultation builds on prior stakeholder engagements and invites further views and feedback on areas including support for and understanding of the plans, how the standard should be enforced, and who should be responsible for compliance failures.
What is the Decent Homes Standard?
The Decent Homes Standard has been in existence for more than 20 years – but up until this point it has only applied to social housing. The government says it has played a key role in setting minimum quality standards for homes in the social rented sector during this time.
Under the new standard for the private sector, all properties would be required to meet four main criteria to be considered to provide a ‘decent’ home:
- Meet the current statutory minimum standard for housing
- Be in a reasonable state of repair
- Have reasonable facilities and services
- Provide a reasonable degree of thermal comfort
Landlords will have a legal responsibility to ensure compliance, with heavy sanctions for rogue landlords who let out properties that are in disrepair – including up to six months in prison according to a report in The Telegraph.
Homes will need to be free of category 1 hazards under the Housing Health and Safety Rating System – but the standard goes far beyond just health and safety, including ensuring facilities are adequate, such as having reasonably modern and correctly located kitchens and bathrooms. Landlords will need to ensure their properties don’t fall into disrepair and address any issues that occur before they deteriorate further.
Legal Duty on Landlords to Meet Standard
To ensure standards are enforced, the government plans to place a legal duty on landlords, with failure to comply being a criminal offence. Rogue landlords could face legal proceedings through the courts and the prospect of a tough banning order.
In the publication, the Department for Levelling Up, Housing and Communities said:
“The current enforcement system largely places the obligation on local councils to identify hazards in privately rented properties and take enforcement action against the landlord, who must then comply.
“This creates an environment where some landlords are not proactive in ensuring their property meets requirements and rather wait for an inspection to be told what improvements need to be made whilst tenants live in unacceptable conditions.
“In order to address this, we plan to introduce a legal duty on landlords to ensure their property meets the Decent Homes Standard. If landlords are in breach of this requirement as identified by a local council through an inspection, this would be a criminal offence and it can be dealt with by either issuing a civil penalty or undertaking a prosecution in the magistrate’s court. We propose that failure to comply with this duty also be made a banning order offence. A banning order prohibits a landlord from letting housing or engaging in letting agency or property management work.”
How Will The New Standard Affect Landlords?
The obvious thing to say is that landlords will need to make sure they fully comply with the standard when it is made law. This means you may need to consider updating your properties and addressing any issues that are present.
The government says it recognises that the changes are ‘significant’ and proposes they are rolled out using a phased approach or transition period, including a possible grace period before the standard becomes a requirement and any enforceable action can be taken. This is one aspect being looked at as part of the consultation.
It is certainly important that the rollout of the new standard is carefully managed in order to ensure there is not a mass exodus from the sector. Given the barrage of negative factors currently facing landlords including rising costs, increased taxation and significant legislative reforms, it would be little surprise to see many landlords selling up and seeking alternative property investment opportunities.
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Important note: The information provided in this article is general in nature and does not constitute personal financial advice. If you are unsure whether an investment is right for you, please seek professional advice. If you choose to invest, the value of your investment can both rise and fall so you may get back less than you put in.