Rogue One: Government policies are forcing tenants onto bad landlords

Imagine living in a house without hot water and heating. Or with mouse infestations, broken appliances, damp and mould. These are some of the problems people coming to Shelter live with every day.

Thanks to Shelter’s campaigning, local authorities are clamping down on this behaviour. A Guardian investigation has named some of the most prosecuted landlords in Bristol. Some of the problems found mirror what we see on a daily basis: broken cookers and drains, cold, substandard or unlicensed homes. The report found 61 landlords that have been convicted of multiple housing offences over the past two years that are still in the business of renting.

Under the new Housing and Planning Act, councils will have greater powers to stamp out rogue landlords and improve property conditions in their area. Yet despite efforts over the years to tackle the unscrupulous few, in some areas, these landlords continue to thrive. Why?

The barriers to private renting

Low-income households in the private rented sector often find they have no alternative than to be pushed into the arms of landlords that have convictions for housing offences.

Shelter is currently examining the multiple barriers low-income tenants face when they are looking for a new privately rented property.

Chief on the list is the growing shortfall between the amount of housing benefit people can claim and average local rents.

In Bristol, a person eligible for a one-bedroom flat would face a shortfall of £142.93 a month between their housing benefit (Local Housing Allowance, LHA) and rents at the cheapest end of the market. A small family in need of a two-bedroom property would face a £217.51 shortfall.

The government’s squeeze on housing benefit means that LHA rates no longer keep up with local rents. In particular, the four-year freeze on LHA rates means that by 2020, 83% of rents at the lower end of the market will be unaffordable to tenants claiming LHA.

What’s more, low housing benefit rates make renting to people on housing benefit an unattractive option to reputable landlords, especially if they can rent their property for more money to other people. Our survey of private landlords last year found that 63% of landlords would prefer not to let to housing benefit claimants, with 42% operating an outright bar.

Some tenants are able to borrow or raid their other benefits to cover the shortfall between their housing benefit and the rent. Even if this is an option, other barriers such as the cost of a deposit, or the demands for guarantors and credit checks can stand between families and a new home.

The scarcity of social housing means the majority of people on low incomes will never be offered a council or housing association home. A growing number of people without options are stuck in temporary accommodation – some people end up rough sleeping.

So no wonder low-income tenants often feel forced into agreeing to rent poor-quality, cold and damp housing where their landlord has already been convicted of an offence. And no wonder rogue landlords still continue to make a living out of letting substandard properties.

What would solve the problem?

What can we do to make sure that people on low incomes do not have to live in such properties? Firstly, councils should be using their new powers, such as the ability to impose fines of up to £30,000 on landlords for a range of housing offences.

But we also need to examine why low-income renters are pushed onto the fringes of the market. A large part of this is because substandard homes are the only affordable option.

The government must abandon the punitive LHA freeze and LHA rates must go back to reflecting local rents if it is serious about tacking these issues.

Low-income tenants also often struggle to afford the upfront costs of renting and our research shows that being forced into borrowing is more common for tenants claiming housing benefit. We welcome the government’s forthcoming ban on letting agency fees, however the government must review the deposit system, perhaps by enabling tenants to transfer their deposit between tenancies.

This will help ensure that tenants don’t get trapped with a bad landlord because they are unable to move anywhere else.

We support the government’s efforts to crack down on rogue landlords. But the truth is that such landlords continue exist because, for many people, there is simply nowhere else to go.