How open data could power change in the private rented sector

Nesta and ODI’s Housing Open Data Challenge invites teams to develop products and services using open data to help people get the best out of renting, whether they are in the private rented sector or in social housing. As part of this challenge, Shelter have blogged about the need for greater open data in the private rented sector.

Private renting is fast becoming the new normal. The sector is now home to more than 9 million people – up from just over 5.5 million just a decade ago. For the first time in post-war history, more people rent from private landlords than from councils and Housing Associations combined. People are now renting for much longer and at more settled stages of their lives – almost half of renters are aged 35 and nearly a third are families with children .

The case for greater open data

The growth in private renters has also led to a huge rise in the number of private landlords, as the market is dominated by individuals owning just one or two properties. Eighty nine per cent of all landlords are private individuals, and more than three-quarters (78 per cent) own just a single rental property. Whilst the government collects data from a sample of landlords, which is then used to extrapolate trends in the sector, there is no centralised data collected on the exact number of landlords and or rented homes. This lack of basic data presents major barriers to local councils and campaign groups like Shelter who want to improve standards and develop national policy on the private rented sector.

Firstly, the lack of clear, usable data means that there’s no systematic process by which national or local government can contact landlords to inform and update them on their legal rights and responsibilities. There is literally no record of who is or isn’t a landlord. Professional trade associations ought to be an alternative route for policy makers to reach landlords, but only a very small number of landlords are members, and there is no requirement for landlords to join one.

Secondly, not being able to identify rented properties or landlords can create serious public and environmental health problems. Over the past decade local authorities have seen a dramatic increase in the numbers of people living in the private rented sector, which is also where the worst physical conditions are found. At the same time however, cuts to council budgets have left many environmental health teams, which play a central role in ensuring landlords maintain the standards of their properties, under resourced. A lack of data on landlords and the homes they let makes it almost impossible to target educational and support resources at landlords and take enforcement action against the rogues who deliberately exploit renters.

A failure to collect consistent data on this rapidly growing sector also presents problems for central government. HMRC has recently launched its Let Property campaign in an attempt to crack down on landlord tax evasion, which it has estimated is costing the government £550 million every year. Greater access to centralised data on the number of landlords and the properties they let would make this task much easier. Similarly, with greater access to data local authorities would be better equipped to recoup unpaid council tax. Since launching its borough-wide landlord licensing scheme, the London Borough of Newham – using the new data the scheme has collected on landlords – has collected £390,000 in unpaid council tax.

How can we help renters?

We know that the number of private renters has grown at a phenomenal rate. Private renting is the most expensive form of housing, but continues to be the most unstable and in the worst condition. In an overheated market, where landlords are able to evict renters very easily, they have little consumer power to bargain for better standards. For this reason, greater available data aimed solely at renters alone, who have very little choice about who they rent from, will not necessarily dramatically improve the sector. This is a challenge that entrants to the Housing Open Data Challenge will have to take into account when developing a tool that benefits renters. In this type of market, improving renter’s consumer bargaining power is key.

Despite the growing importance of this sector and the problems it presents, worrying little is known about the numbers of private landlords and the total amount of private rented stock. To take our rented sector into the 21st century we need to collect – and publish – the data that public bodies, campaign groups and renters themselves need in order to understand what is happening. Only then can we hope to get to the bottom of the problems that can make renters lives a misery.

Find out more about the Nesta data challenge and how to enter here

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One Comment
  1. Whilst I am all in favour of Landlord paying tax on rental income and capital gains tax when they sell the property.

    Should n’t Shelter play fair? The Government spends a huge amount on housing benefit, but often this goes into the tenant account, who often spend it on other things. If they are not using to pay their landlord, but they should either return the money to the State or be subject of income tax. If a housing benefit has a casual job, they would be forced to declare their income.

    Many letting agents already receive notification from HMRC, to declare a list of their landlords. With overseas landlords, the agent is supposed to collect tax and send it to the HRMC.

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