UK: The Housing Act

The Housing Act 2004 received royal assent on 18 November 2004 and its provisions will be brought into force in stages by commencement orders. The Act contains reforms which aim to create a fairer housing market for those who own, rent or let residential property. The reforms will make substantial changes to the way in which residential property is regulated in the private and public sectors.

The Housing Minister, Keith Hill, has said that "better use will be made of the existing housing stock, there will be better protection for vulnerable tenants and new and innovative schemes to deliver quality social housing at an acceptable cost. As well, homebuyers and sellers will be able to look forward to long overdue reforms which will take some of the misery and frustration out of moving home."

• Sellers of properties, or their estate agents, will be required to provide and pay for information concerning the sale of residential property. The information, including a home condition report, will be contained in home information packs. The packs will come into force from January 2007, after a six-month voluntary trial period.
• There is provision to compel estate agents to belong to a redress scheme for buyers and sellers and for an ombudsman scheme for estate agents.
• Landlords who let property to assured shorthold tenants and who require a deposit will be required to be a member of an approved insurance scheme or a custodial scheme. A landlord who is not a member of an appropriate scheme will not be able to use the notice-only ground of a shorthold tenancy to gain possession until such time as they are a member.
• The existing housing fitness standard contained in the Housing Act 1985 will be replaced by the Housing Health and Safety Rating System. This will help local authorities to target properties in poor condition, which often house vulnerable people. Detailed regulations have yet to be made, but will set out how inspections are to be conducted. The System comprises 29 categories of hazard, each having a rating being a numerical score falling into ten bands.
• There will be a new range of enforcement procedures available to local authorities to improve housing standards and tackle poor housing conditions. Local authorities will be able to apply for empty dwelling management orders to bring long-term empty properties, i.e. those which have been unoccupied for at least six months, back into operation. An application would have to be made to a residential property tribunal and the authority would have to show that there is a reasonable prospect that the building will be occupied. The authority would assume the role of proprietor and be entitled to grant tenancies, receive rental income and carry out repairs. Exemptions can be made in the case of holiday homes, those being renovated as well as those being advertised for sale or letting. Local authorities will also be able to serve overcrowding notices and management orders.
• There will be new mandatory licensing schemes for houses in multiple occupation of a description contained in regulations. These are intended to apply initially to larger, higher risk houses in multiple occupation of three or more storeys, occupied by five or more people. Licences will run for five years. No rent will be due on properties which should be licensed but which are not.
• There will be new selective licensing procedures for other properties to ensure that minimum housing standards are reached and to deal with particular problems in an area. This will be primarily focused on areas of low housing demand and/or subject to anti-social behaviour. The Act provides for local authorities to licence private landlords in a designated area. Where a property is not licensed, but should be, a residential property tribunal may impose a financial penalty, to be known as a rent repayment order, on a landlord. Landlords without a licence will not be able to rely on a section 21 notice to regain possession of their property.
• There will be restrictions on the right to buy local authority housing by extending the qualification period from two to five years and ensuring properties are offered back to local authorities first on any future sale. The period during which the discount must be repaid will be extended from three years to five years when the property is resold.
• There will be enhanced protection of the rights of mobile home owners.
• Local authorities will be required to consider the accommodation needs of gypsies and travellers.

The reforms have been criticised for being bureaucratic and whilst they are intended to improve standards, they may ultimately lead to a diminished supply of property in the residential rental market, leading to increased rents. Demand on the enforcement resources of local government is likely to increase significantly.

© RadcliffesLeBrasseur

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