Monday, 1 August 2011

The OBSERVER: Rogue landlords flourish as would-be buyers forced to rent

Shelter warns that many disreputable landlords are taking advantage of the major changes sweeping the property market. The dearth of mortgages has forced many people into poor housing.

Jamie Doward and Vicus Burger from the The Observer, Sat 30 Jul 201

Slum landlords of the type that enjoyed a boom in the 1980s are again doing brisk business because of major changes sweeping the property market, say housing experts.

Millions of people are being priced out of buying a property as mortgage availability becomes scarce and they struggle to raise a deposit. Latest figures suggest mortgage lending is now a third of what it was at the height of the boom in 2007.

A dearth of social housing, which is under acute pressure as local authority budgets are cut, is also contributing to a lack of affordable accommodation. An increasing number of people have no option but to rent, creating intense competition in the private rental market.

There are now 3.4 million households living in the private rented sector in England, a 40% rise over the past five years and the biggest increase on record, according to new analysis by Shelter. The trend has alarmed the Chartered Institute of Environmental Health (CIEH) whose officers are charged with ensuring the nation's housing stock meets adequate standards.

"People who are in relatively secure jobs but can't afford to buy are moving into the rented sector," said Stephen Battersby, president of the CIEH. "People who have traditionally used the private sector will drop further down the ladder into the hands of the more exploitative, neglectful landlords, if not those who are downright criminal."

The government claims three quarters of private tenants report they are happy with their accommodation, but experts point out that this leaves some 800,000 who have concerns, many with the way they are treated by their landlords.

In the past year, Shelter says it has seen complaints about landlords increase by 23%. Almost nine out of 10 environmental health officers say they have encountered landlords harassing or illegally evicting tenants from their homes. And almost all environmental health officers say they have encountered landlords who persistently ignore their responsibilities, with half believing they do this to make as much money as possible

"A chronic shortage of social housing and more people priced out of the housing market means that renting is fast becoming the only option for thousands of people in this country," said Campbell Robb, the chief executive of Shelter. "Yet our figures show a worrying increase in the number of people seeking help regarding problems with their landlord. It would appear that rogue landlords could be cashing in on this growing market."

Housing charities warn there is very little policing of landlords and the condition of their properties. In 2009, the English Housing Survey identified 1.5m homes in the private rented sector as "non-decent". Of these, 970,000 failed the Decent Home Standard. This has led the CIEH to call for a national register of landlords. "It's a public health issue that affects us all," said Battersby. "The NHS is spending £800m a year because of poor housing, factor in social costs and it's £1.5bn."

Environmental health officers working for Local Housing Authorities (LHAs) are responsible for monitoring standards in private properties rented out to benefit claimants. But, according to new evidence obtained by the CIEH under the Freedom of Information Act, four fifths of LHAs have never carried out a prosecution of a landlord

Cutbacks have prompted fears that this situation is unlikely to improve given the amount of time and manpower a prosecution involves. But experts fear the need to tackle the issue of rogue landlords in the private sector will become more urgent in the coming months. The localism bill currently before parliament allows local authorities to discharge their duties to homeless people by using private rented accommodation, rather than social housing, without the applicant's agreement. Changes to the amount of housing benefit paid to claimants will also have an impact.

"With cuts to housing benefit and changes to the homelessness safety net, we are concerned there will be an influx of people pushed to the bottom end of the private rented sector which will lead to an imbalance between supply and demand for properties," Robb said. "This could see some rogue landlords exploiting the lack of accommodation, with the most vulnerable tenants left with little choice of who to rent from."