Unregulated rental sector condemned as “a complete mess” by MPs

The current system of so-called ‘exempt rental accommodation’ has been condemned by MPs as “a complete mess” which wastes taxpayers’ money and fails many residents.

Exempt accommodation is the name given to a type of supported rental housing that is used to house a range of people with support needs - typical residents are the homeless, former prisoners and some people with mental illness. 

Now the Levelling Up, Housing and Communities committee of MPs - which shadows the activities of the Department of Levelling Up, Housing and Communities - is demanding a series of urgent reforms for the exempt rental sector, including the introduction of enforceable national standards and compulsory registration.

The report also calls for action to close the loopholes in the current system which “offers a licence to print money to those who wish to exploit it”.

The committee recommends that the government:

- introduces compulsory national minimum standards for exempt accommodation, including on referrals, care and support, and quality of housing;

- gives local councils the powers and resources to enforce these standards;

- requires all exempt accommodation providers to be registered;

- creates a National Oversight Committee to join-up existing regulators and mend the current ‘patchwork regulation’ which has too many holes;

- ensures the providers of exempt accommodation for survivors of domestic abuse have recognised expertise to provide specialist support and a safe environment;

- reviews the system of exempt housing benefit claims and clamp down on the exploitation of the lease-based exempt accommodation model for profit.

Clive Betts, chair of the Levelling Up, Housing and Communities committee, says: “While there are many good providers of exempt accommodation, the findings of our inquiry on the state of exempt accommodation are shocking. The current system of exempt accommodation is a complete mess which lets down residents and local communities and which rips off the taxpayer. The government must act now to help councils to tackle this situation and ensure people get the quality housing and support services they need to move on with their lives.

“The best examples of exempt accommodation highlight quality housing and specialist services, with proactive staff helping to support residents. However, in the worst cases support amounts to little more than a loaf of bread left on the table or a support worker shouting at the bottom of the stairs to check on residents.

“Residents and communities are being failed while unscrupulous providers make excessive profits by capitalising on loopholes in the system. Recently it has been reported in the media that these providers have included organised criminal gangs, who use the system to launder money. This gold-rush is all paid for by taxpayers through housing benefit. This must change and it is crucial the government brings forward reform on a range of areas including on standards, regulation and oversight, and on funding to put this right. In our changes we are not asking for any additional expenditure; we are calling on the government to get a grip on the vast sums it is paying out without effective oversight”.

The report also acknowledges the potential impact on neighbours and local communities of high concentrations of exempt accommodation, which can attract anti-social behaviour, crime, rubbish, and vermin. These impacts also risk undermining local support for supported housing. The report recommends the government take forward planning reforms, and close existing exemptions in legislation, to assist local councils in helping to manage supply in line with need and to balance with much needed family housing in local communities.

The report highlights the dearth of data on exempt accommodation which makes it difficult to determine how widespread the worst examples are and whether this taxpayer funded system is delivering value for money. The committee calls on the government to organise, within the next year, the collection, collation and publication of a range of key exempt accommodation annual statistics at a local authority level.

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