Impact of proposed Decent Homes Standard on the private rental sector

May 16, 2023

Last year, the government published proposed new standards for the private rented sector, including plans to end section 21 notices, introduce a new ombudsman, and limit rent rises to once per year.

So what does this mean for the private rental sector?

Why is the standard being proposed?

The aim of introducing a Decent Homes Standard to the rented sector is to align the private rental sector with the social one, which has had a Decent Homes Standard since 2001.

While the majority of rental properties won’t be affected, it will help the minority of tenants who live in properties that are deemed to be unfit and a risk to health and safety. The Decent Homes Standard will require landlords to ensure their rental properties are in a

good state of repair. This includes efficient heating and safety standards when it comes to hazards such as fire risks and damp conditions. 

The proposed standards for a private rental include the following four criteria:

  • It meets the current statutory minimum standard for housing.
  • It is in a reasonable state of repair.
  • It has reasonable facilities and services.
  • It provides a reasonable degree of thermal comfort.

If a private rented property falls below this standard, the tenant will be allowed to have their rent repaid.

Who will the standard benefit?

A Decent Homes Standard will benefit those renters in the private sector who are putting up with sub-standard accommodation.

Fortunately, according to a recent English Housing Survey, the number of homes classed as non-decent has halved in five years, dropping from 44% in 2018 to 23% in 2023. However, it estimates there are still a million properties in the private rented sector that would be deemed non-decent.

As well as renters, a study by Paragon Bank found that landlords are also in favour of the introduction of a Decent Homes Standard to the private rental sector. A third of landlords said they strongly supported the Decent Homes Standard for properties in the private rented sector, 28% said they generally supported it, while 8% of landlords questioned were unaware of the change.

74% of landlords felt local authorities should do more to tackle those who rent out substandard homes and feel frustrated by the lack of action taken against unscrupulous landlords.

Most landlords upgrade properties they buy

Another study by Paragon Bank showed that 81% of landlords in the private rental sector upgrade each new property they buy; 18% spend between £10,000 and £20,000 on improvements – while 22% invest over £25,000.

The research showed that 83% of landlords upgraded their properties to offer decent homes to their tenants; 82% wanted to make the property more attractive to tenants, while 66% hoped to be able to charge a higher rent for the property.

“The vast majority of landlords have nothing to fear from a Decent Homes Standard as they are providing a good quality home to their tenants already. It’s the minority of landlords who don’t meet these standards that are tarnishing the wider reputation of the sector,” said Richard Rowntree, managing director of mortgages at Paragon Bank.

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