The Housing Act 1988 came into force in January 1989 with the intention of revitalising the private rented sector (PRS). Over time, the legislation has increased the number of households in the PRS – now at 4.5 million (19% of the UK’s housing stock), up from 2.8 million in 2007.
The Homes Act 2018 was introduced in March of this year as a further step by the government to improve regulatory control in the PRS, raise housing standards and enhance tenants’ protection. The act follows the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018 and is an amendment to the Landlord and Tenant Act 1985, designed to keep pace with the growth of PRS over the past decade.
The Homes Act will have less of an effect on professional and larger landlords who understand the need to meet minimum housing standards. It is instead focused on driving up standards at the bottom of the rental sector. There is a recognition that the pressure for housing has the risk of allowing landlords to provide substandard property and still secure tenants, which is unacceptable in the 21st century. The legislation is being introduced to reinforce minimum standards with the probable consequence of further professionalising the sector.
With an increase of 1.7 million homes in the PRS over the past 12 years, there has been a rise in the incidences and risk of properties to let falling below acceptable standards.
While it is disheartening to think that legislation is needed to ensure housing is fit for human habitation, the government clearly sees a need to legislate. The legislation will act as a discouragement to rogue or amateur landlords looking to invest in the buy-to-let sector for short-term financial gain without due regard for their tenants’ basic rights.
The act will empower tenants to hold their landlord, including registered providers such as housing associations, to account without having to rely on their local authority to do so. We foresee the potential for disputes regarding whether a property is in breach or if the problems are being caused by the tenant’s behaviour or belongings, leading to litigation.
This raises two questions: will the tenant have the financial means to actively progress cases to court? And will the occupant want to enter a legal battle with their landlord?
I think that the clarity the act will bring will enable the lending market to easily identify areas of non-compliance and ensure that landlords who invest in the PRS maintain appropriate standards in tenanted housing.
Paul Aylott is head of valuation and lease advisory at Glenny