Rogue private landlords given £2.5bn a year of public money, new analysis reveals

Exclusive: Landlords accused of ‘profiteering by selling squalor’ as data reveals how the taxpayer subsidises unsafe homes

Benjamin Kentish
Sunday 03 September 2017 19:45
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Almost a third of private rented homes in England fail basic health and safety standards
Almost a third of private rented homes in England fail basic health and safety standards

Billions of pounds of taxpayers’ money is being given to rogue landlords who are renting out homes that don’t meet basic health and safety standards, new analysis of Government data has revealed.

Over the next five years, they will receive more than £12bn in housing benefit – enough money to have helped build more than half a million new homes.

Some £2.5bn currently goes every year to landlords who are renting out properties in a “non-decent” condition: the Government’s benchmark for what constitutes an unacceptable quality of accommodation.

To be classed as non-decent, a home must have inadequate heating, outdated sanitation, be in a state of serious disrepair or be unsafe, for example due to a dangerous boiler, vermin infestation or faulty wiring.

The Independent revealed last month that almost a third of private rented homes in England, totalling 1.4 million properties, are currently substandard, while 17 per cent contain the most dangerous type of safety hazard.

Despite this, the landlords that own them are continuing to profit from vast sums of public money.

Spending on housing benefit has soared by £4bn since 2010, and now stands at £24bn a year, of which 36 per cent (£8.8bn) goes to the UK’s 1.75 million private landlords.

The new analysis of data, from the latest edition of the annual English Housing Survey, reveals that more than a quarter of all housing benefit paid to private renters goes into the pockets of rogue landlords.

Some of the rise in spending is a direct result of private rents increasing by an average of 22 per cent since 2010, meaning tenants are having to rely more and more on the state for financial support.

Housing benefit going to private renters has more than doubled in the last 10 years, from £3.7bn to £8.8bn. The Treasury forecasts it will rise to £9.4bn by 2021-22.

The increase comes despite Government ministers making 13 separate cuts to housing benefit since 2010, in an attempt to stop costs spiralling.

Commenting on the latest figures, the Labour party accused the Government of having “made it easier for rogue landlords to fleece the system”.

Last year, ministers rejected an amendment to make it a legal obligation for landlords to ensure their properties are “fit for human habitation”. They have also consistently refused to introduce licensing of all private landlords, and have clamped down on local councils who want to introduce their own licensing schemes.

John Healey, the Shadow Housing Secretary who uncovered the latest figures in conjunction with the independent House of Commons Library, said: “The number of families renting from a private landlord has soared by more than a million since 2010, but decisions made by Conservative ministers have made it easier for a minority of bad landlords to fleece the system.

“Most landlords provide decent homes that tenants are happy with, but these rogue landlords are ripping off renters and taxpayers alike by making billions from housing benefit on substandard homes.

“Theresa May declared the ‘housing market is broken’, but Tory ministers won’t act to make the market fairer or work better for private renters. After seven years of failure, the Conservatives have no plan to fix the housing crisis.”

He added: “The next Labour government would call time on bad landlords and bring in a New Deal for private renters to establish new consumer rights.”

Dawn Foster on Double Take: Three policies to tackle the housing crisis

Labour has vowed to introduce legal minimum standards for all private homes to put renters back in control, and to encourage councils to adopt compulsory landlord licensing, giving them the power to tackle offenders.

A third (£827m) of all housing benefit going to rogue landlords is spent in London, while a further £399m is in the South East.

Those in the North-west receive £351m, but in other regions the figure is much lower: for example, £83m in the East Midlands.

Since 2010, the total number of households renting privately has increased by 1.2 million – more than a third – as a fall in the number of social homes and rocketing house prices leave millions of people trapped in the private-rental sector.

While local councils and social housing landlords are required to keep their homes in a good condition, regulations on private landlords are fewer and harder to enforce.

Responding to the latest figures, campaigners accused rogue landlords of “profiteering by selling squalor”.

Dan Wilson Craw, director of campaign group Generation Rent, said: “While decency standards have become the norm across the social rented sector in the past 20 years, more people have found themselves with no option but to rent from private landlords, where there is a greater risk of living in poor conditions.

“Landlords should not be allowed to profiteer by selling squalor, whether rent is paid through housing benefit or wages.

“The Government has finally acted this year to introduce a right to claim back rent paid for an unsafe home – but to drive the cowboys out of business, both renters and councils need greater powers to take action against them. It should be easier for tenants to take their landlord to court, and for councils to start licensing all local landlords.”

The Government has now introduced a register of rogue landlords, which will become active from October. However, it will be accessible only to Whitehall departments and local councils. Tenants or prospective renters wanting to check if their landlord is on the register will be unable to do so.

Renters will also be given new rights to reclaim rent they have spent on unsuitable properties.

Councils have been handed the power to fine failing landlords up to £30,000, but local government sources say cash-strapped councils are struggling to enforce existing regulations, in the face of government-imposed budget cuts of up to 50 per cent.

Landlord representatives, however, said it was up to councils to do more.

Alan Ward, chairman of the Residential Landlords Association, said: “Every tenant deserves a property that is safe, legal and secure, which the majority of landlords do provide.

“For the minority who do not, what is needed is improved enforcement to root out the criminals who have no place in a modern rental market.

“Councils already have the power to recover money paid to landlords who are found guilty of criminal offences, including providing substandard accommodation. At present, however, many do not use these powers enough, letting down tenants and good landlords.”

In response to the new figures, a Department for Communities and Local Government spokesperson told The Independent: “We’re determined to crack down on rogue landlords and councils now have the extra powers they need, along with £12m in additional funding, to tackle the landlords that shirk their responsibilities.”

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