Why rent refunds are the key to fixing the rental market

One tweak to the Renters (Reform) Bill could transform renters’ awareness of rights, drive up landlords’ compliance with new rules and reduce council’s workload at a time of financial difficulty.

Last week’s English Housing Survey revealed that, once again, private rented homes are more likely than homes in other tenures to have a dangerous hazard. One in eight private renters (12%) live in a home that could damage our health.

There are a number of reasons for this, including the continued existence of Section 21 evictions which allow landlords to intimidate tenants into staying quiet about disrepair, but years of cuts to council budgets are another major factor.

Councils have powers to inspect private rented homes and fine landlords who don’t make improvements. But when budgets have been cut, it can be difficult to get the council’s environmental health team to fight your corner and get results when your landlord is ignoring a damp problem.

With one in five councils expecting to announce bankruptcy in the next two years, funding for housing enforcement is only going to get worse.

The Renters (Reform) Bill currently going through Parliament is an opportunity to make councils’ jobs easier. Central to this is the introduction of the Property Portal – a national register of landlords. Finally, those businesses that provide the thing you spend half your life in and often take half your wages, will have to make themselves known to the authorities. As a tenant you will be able to check information about your home, including details about your landlord and whether they have met certain legal requirements. The Portal will also provide information about your rights as a renter.

The Portal will also help streamline the bureaucratic processes of enforcing safety standards, by making it easier for councils to target their resources and harder for landlords to ignore council notices.

But as things stand, the government is in danger of creating a Portal that few renters use, many landlords evade, and gives councils even more work to do.

This is because the Bill puts the responsibility for making sure landlords are registered firmly in the hands of local councils, even though the people best-placed to know about landlords breaking the law are their tenants.

Council officers aren’t going to spend every working hour checking that thousands of potential private rented homes are registered. They will be relying heavily on tenants visiting the Portal to check if their landlord is playing by the rules, and reporting non-compliance to the council.

But there’s not actually that much in it for tenants to report a dodgy landlord. The Bill says that you could get a rent refund if your landlord has repeatedly failed to register with the Portal, or has registered using false information. But you will rely on your council to investigate and take appropriate action before you can apply for a Rent Repayment Order.

Given the uncertainty around getting any compensation for sticking your neck out to report your landlord, you’d be forgiven for believing it wouldn’t be worth the bother. Even if you did report non-registration, and even if the council took action, if there’s no reward, you’d be less likely to encourage fellow renters to do the same.

And the rights information on the Portal is not enough of a draw. We know that most tenants are unlikely to seek out information about their rights until they face an emergency situation. The government should be thinking about how to reach tenants sooner with valuable information well before they need it. This requires a stronger incentive than an assurance that “it’s good for you” and “get a rent refund if your landlord has done x … but only if your council has already done y and also does z“.

If renters are less likely to find the Portal valuable, then it becomes a vicious circle, with fewer tenants learning about it in the first place, fewer landlords getting reported, so more landlords feeling emboldened to avoid registering in the first place, undermining the whole system. Low traffic from renters will also make it more challenging to raise awareness of rights among people who are most at risk of mistreatment.

There is a solution to this though, and it lies in the existing regulations for landlords. About 7% of private rented homes need a licence – this includes all large houses in multiple occupation (5 or more individuals from different households), and, where individual councils have introduced schemes, small HMOs and other types of home.

If your landlord needs a licence but hasn’t applied for one, you can apply for a Rent Repayment Order (RRO) at the First Tier Tribunal and could receive up to 12 months’ rent back. It doesn’t require a full investigation from the council, just confirmation that the landlord has not applied for a licence for your home.

In London at least, RROs are the main way landlords get into trouble for dodging licensing rules.

We and the tenant rights organisation Flat Justice analysed three years’ of cases at the First Tier Tribunal and found 265 RROs relating to licensing in London between January 2020 and December 2022.

We also analysed data published by the Greater London Authority on councils’ own enforcement activity. In the same period, councils in London reported 132 civil penalties and 35 prosecutions for landlords who had failed to obtain the correct licence. View a breakdown by borough.

Of these cases, 18 properties were subject to both RROs and council action. Putting them aside, this indicates that landlords who broke the law on licensing were 66% more likely to get into trouble thanks to their tenants’ actions rather than the council’s.

These cases are just the tip of the iceberg – London councils reported 9,584 unlicensed large HMOs in 2022-23. Part of the problem is that when just 7% of homes are subject to licensing, it is hard to generate word of mouth among the people who could take action. If you tell someone that you won rent back, there’s a good chance that their home won’t be licensable in the first place.

It’s true that other barriers exist in terms of general awareness of rights and having the ability and confidence to exercise them. But having a similar set of rules for 100% of rental properties would have a transformative effect on the rental market. Once all rental properties need to be registered on the Portal, and if failure to register incurs a rent refund for the tenant, this would create a critical mass of people keeping an eye on the Portal in case there’s a windfall in it for them.

Generation Rent believes that tenants should be eligible for a Rent Repayment Order if their home is not listed on the Portal – not only in the scenarios currently proposed where the landlord has provided false information or already ignored the council’s instruction to register.

In such a system, every time you move home it would be worth checking if your landlord is registered on the Portal, because regardless of the type of property they will need to be on there, and if they are not you could claim back rent. Every time you tell a friend that they should check the Portal, it will be relevant for them and they would have a clear incentive to check as well. Once on the Portal they will see information about their rights and may learn something that will protect them in the future.

Landlords would hear from their networks how important it is to register, or face losing a year’s rent. That would drive up compliance, and make it harder for criminals to operate, which is ultimately our goal here.

And all this would take place without local councils having to lift a finger, which would let them focus their limited resources on inspecting unsafe properties and supporting people in the worst homes.

The Property Portal has huge potential to hold landlords to account, but it will only work if it can be enforced. The easiest way to enforce it is with an army of tenants checking the Portal and coming down like a tonne of bricks on landlords who try to hide.


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