Update | Landlord and tenant: Landlord register, longer fixed terms

Finally, news organisations, and even the government, seem to be waking up to the fact that there is a crisis in housing at the moment and that it isn't going away.

A recent report from the Cambridge Centre for Housing and Planning Research said its investigations found that the private rented sector looks set to expand and, depending on the strength of the economy, could comprise 40 per cent of households within the next 25 years, in London at least.

Generally the percentage of people buying their own home is decreasing, particularly among middle income families, largely due to lack of finance for a deposit and difficulties in getting a mortgage. Their chances of inheriting property from their parents is also decreasing as older people are living longer and the equity in their homes is eaten up by the cost of care. The Housing Act 1988 was largely set up by the conservative government at a time when the private rented sector was tiny, just seven to eight per cent of households. However the ballooning private rented sector is beginning to reveal cracks in the system.

Leaving aside housing benefit issues, the main problems as I see them are: bad landlords 'getting away with it', rogue and incompetent letting agents and a lack of long-term security for families and others who need it.

Bad landlords and disrepair

It is a proven fact that poor standards in properties affect the health and wellbeing of those who live in them. A report from the parliamentary office of science and technology states that poor housing costs the NHS at least £600m per year. As we all pay for the NHS this should be of concern to all of us. There is also the fact that children in particular can be blighted by growing up in poor housing, which is also something which should concern us all.

There will always be those in society with no conscience who are purely concerned with making a profit, at whatever cost. In housing, these are landlords who rent out shoddy run down properties and deliberately flout standards, 'moving on' tenants who complain (or 'troublemakers' as they are often called).

I should emphasise that there are many good and caring landlords. However, these are unjustly tainted by the rogue element which are in a minority, but in some areas it is quite a big minority.

At present, if we had tried to set up a system which made life easy for them, it would be hard to improve on the one we have, short of removing standards altogether.

There are two ways to approach dealing with disrepair in housing:

? A claim by the tenant under their statutory repairing obligations, and

? improvement notices and then prosecution by local authorities.

Although tenants do have rights which the courts will enforce, the procedure for doing this is frankly, beyond many ordinary people. It involves complying first with the disrepair pre-action protocol, then the instruction of experts (which have to be paid for) and then a complex and difficult court claim which could take up to a year or more.

During this time the landlord will almost certainly serve a section 21 notice and claim possession (usually bringing any legal aid granted to an end). Some criminal landlords will intimidate tenants into withdrawing their claim or even evict them illegally. This is not a new problem; it's called retaliatory eviction and the CAB published a report about it back in 2007.

Prosecutions

Local authorities have jurisdiction under the Housing Act 2004 to carry out inspections under the Housing Health and Safety Rating System and serve improvement notices on landlords whose properties show any category one hazards. If this is not dealt with they can then bring a prosecution.

Although many authorities are doing this, there are big problems:

? Most councils are under enormous financial pressure and have had to cut staff and services. A TRO I know in London tells me that he used to be in a team of eight but that there are now just two of them. The problems, of course, have not got any less, far from it.

? Prosecutions are very time consuming and, bearing in mind the criminal standard of proof (beyond reasonable doubt), require good evidence. However many tenants are unwilling to give evidence in a court hearing months after the event. Often they are of poor character themselves and so would not make good witnesses.

? As well as being few in number, many housing officers are untrained and ill-equipped to prepare a watertight prosecution.

? Even when a prosecution is successful, the penalties handed down are fairly derisory and easily absorbed by millionaire slum landlords (although it is good to see that Norwich City Council recently obtained an order under the Proceeds of Crime Act).

It would take massive financial investment in councils and a change in the legal process before prosecutions could start to have a real effect on housing standards. I now think the only real solution is a national landlords register and compulsory training and accreditation of landlords.

Landlords are understandably negative towards the idea of a register which they consider to be an intrusion into their privacy. However we need to bear in mind that renting out a property is not just a financial investment

But (you will no doubt be saying) most landlords prefer to use a letting agent rather than manage the property themselves. This leads me on to the bigger problem of agent regulation. At present letting agents are wholly unregulated, which is shocking, as most hold thousands of pounds of people's money, with absolutely no accountability. We urgently need to set up a system of agent regulation involving compulsory professional indemnity insurance, client money protection, professional qualifications and CPD, and regular auditing of letting agent accounts.

Assuming agent regulation, landlords could then be given the choice of becoming an accredited landlord and managing the property themselves, or using an accredited letting agent. It's also important that the register be a national one.

Local authorities find it difficult enough to cope as it is, and the inevitable variation in standards and fees that would result from a plethora of local authority schemes, would be unfair and unacceptable.

Longer fixed terms

The other problem faced by families renting is that it is rare to have a fixed term which is longer than a year ? often is it just six months. This makes it difficult for them to put down roots in their community and it is particularly damaging if children have to keep changing schools. This, like the problem of bad landlords, is bad for ?society generally.

There is a very good reason though why landlords avoid (and lenders prohibit) long fixed terms. It is the risk of being stuck with a bad tenant, particularly one failing to pay rent. After all landlords still have to pay their mortgage along with any other outgoings on the property, whether the tenant is paying his rent or not. However evictions based on rent arrears can take up to six months or longer, and run the risk of being derailed by tenants filing flimsy or even fictitious defences.

Routinely, judges will exercise their discretion (where they have it) in favour of tenants rather than landlords, on the basis that, on the scales of justice, the harm to tenants with children of being placed in bed and breakfast is greater than the harm to landlords of 'just' losing another month's rent. But why should private individuals be forced to provide, effectively, free housing to tenants who fail to pay? The only really reliable eviction procedure is under section 21 and that is only available after the fixed term has come to an end.

So we have a problem. If we force landlords to give long-term security of tenure as we had under the old Rent Act, this may well prompt an exodus from the private rented sector, the last thing the government wants right now. However many landlords would gladly give longer fixed terms to tenants, if only they (and their mortgage lenders) could be sure ?they could remove non-paying tenants promptly. So attention needs to be given to our court eviction process and a fast track procedure for rent arrears introduced.

If this is done, then I see no reason why tenants should not be entitled to 'buy' a longer fixed term, maybe after they have been living in the property for a period of time, say six months. If landlords could continue to receive a normal rent, then this would probably be popular in the landlord community as it would give them an additional income stream.

It would also be popular with tenants as it would give them a stake in their homes. Tenants who don't want a longer fixed term could continue to rent on six month and annual fixed terms, as now. As the private rented sector is now approaching a critical mass, it is time to consider whether the system we have is fit for purpose.

If you have strong views on this subject, note that the parliamentary communities and local government committee is undertaking an inquiry into the private rented housing sector and has requested submissions before 17 January 2013.

The ideas discussed in this update are set out in greater detail in my ebook Housing Law ? the Bigger Picture, which can be downloaded free of charge from landlordlaw.co.uk.