Back to Rising Damp? One million rented homes in private sector are substandard

Taxpayers' money is going to private landlords who keep their housing benefit tenants in slum-like conditions

One million homes in the private rented sector fail to meet basic standards of safety, warmth and repair, a report reveals today.

Billions of pounds of taxpayers' money is being spent on housing benefit for rent given to private landlords who fail to keep the properties in good condition, the research by the IPPR North think-tank says in a report entitled "Back to Rising Damp?". The IPPR North report says that privately rented properties are the most expensive yet are in the worst condition, and that taxpayers' money would be better spent on improving conditions for tenants.

The figures, which are higher than ever, will fuel concerns that the largely unregulated, high-demand private rented sector is allowing landlords to get away with keeping their tenants in slum-like conditions without fear of penalty. IPPR North calls for councils to be given more control over how housing benefit is spent, with the money being used to drive up standards in accommodation. The IPPR says that £9.3bn is spent by the taxpayer on housing benefit for private landlords, accounting for three million homes.

The poorest people are the most likely to live in the worst conditions but are less likely to take action against their landlord for fear of the consequences, says IPPR North.

The report says councils should establish community housing agencies which would match tenants with landlords. Local authorities would be able to compete with private letting agents and use the profits to improve the quality of homes in their areas. There would be increased inspections and a system of landlord accreditation. Tenants and landlords would be able to use a council's website to register their interest and find a match, with the local authority effectively acting as a letting agent.

Some local authorities are already operating a form of tenant matching agency. Gateshead council, for example, runs a private rented sector team which helps to improve relations between tenants and landlords and the conditions of rental properties. Private landlords have to be accredited, meaning that the condition of their properties must meet a certain standard. The scheme also offers advice to tenants and landlords, particularly when there is a dispute, offers tenancy agreements and advertising. As a result, the council says, the condition of properties has been improved without soaring rents.

The Government has previously resisted further regulation of the private rented sector from Whitehall, saying it would force up rents. But ministers are believed to be relaxed about letting councils introduce their own forms of tenant and landlord matching.

Official figures in 2011 showed that 217,000 council houses were in such poor condition that they failed to meet the Decent Homes Standard, the Government's measure of the quality of social housing, but far more private rental properties would also fall into this bracket. The IPPR says of three million vulnerable households in the private rented sector, one million are living in poor condition homes.

The Decent Homes Standard states that all social housing should be free of health and safety hazards, be in a "reasonable state of repair", have "reasonably modern kitchens, bathrooms and boilers", and be "reasonably insulated". Private landlords do not have to meet the Decent Homes Standard, but must meet minimum legal requirements on safety. However, many private rented homes remain in appalling states of repair, with mould and damp on the walls, poor central heating or insulation and cramped conditions.

In theory, councils can take over private rental homes that fall foul of minimum safety requirements, but in practice not many are seized.

Ed Cox, IPPR North director, said: "The ever-rising cost of rent subsidy for those on housing benefit and the growth of an underregulated private rented sector mean that more taxpayers' money than ever before is being paid to private landlords for substandard housing. Our research shows that people on the lowest incomes are not only the most likely to live in substandard housing, but they are also the least likely to have these problems addressed by their landlord. They are also less likely to take action against their landlord for fear of the consequences.

"Local authorities are best placed to identify and determine the properties that most need attention. With powers largely in their possession, local authorities should establish not-for-profit agencies to act as a guardian and gatekeeper for tenants living in the private rented sector."

The housing stock available to local authorities has halved in the past 20 years. Some 900,000 more people are living in privately rented accommodation and receiving housing benefit than there were 10 years ago, while overall the number of people claiming housing benefit has risen by 40,000 in the past year, despite the Government attempting to cut the bill by imposing a cap.