Claim – Tenants Left Living in Squalor in Britain as Landlords Escape Heavy Fines

Housing standards, and the enforcement of them, are a key issue in the housing industry at the moment – and particularly when it comes to damp and mould. A recent report in the Observer claims that the compensation regime operated by the Housing Ombudsman is deficient. In this report we will look at this claim and at the realities behind it.

Landlords escaping heavy fines – The Observer claims

An investigation by The Observer newspaper (republished on its sister newspaper The Guardian’s website) makes some pretty damning allegations about the Housing Ombudsman. It suggests that social housing tenants are living in squalor and social housing providers are penalised very little as a result.

Their article is headlined: ‘Tenants left living in squalor in Britain as landlords escape heavy fines’. It explains: ‘Leading private providers of social housing in Britain have been made to pay out only a few hundred pounds on average in financial penalties for severely mistreating tenants’. It says: ‘Exclusive: Housing association payouts over failures to fix life-threatening mould and damp average only £445’.

The newspaper’s analysis covered three main types of issues ruled on by the Ombudsman –service failure, serious maladministration and severe maladministration. It says that taking into account 2,907 rulings over three years the average financial penalty for housing associations was just £445.

The report says that even in cases of severe maladministration ‘where landlords have systematically refused to fix endemic damp and mould issues for years or left tenants living in squalor’ the compensation ordered was often just a few hundred pounds – although it does point out that there ‘are occasions when fines are bigger’.

Now let’s move on and dig deeper into some of the realities behind these claims.

Enforcing housing standards – who’s responsible?

To put this newspaper investigation into context it is important to note that the Housing Ombudsman is only one small part of the wider social housing standards enforcement picture – and a relatively small part at that.

Firstly, just as with the PRS, all council and social housing landlords are legally responsible to their tenants for the standard of their homes. But things operate differently here: Providers are responsible for ensuring that their homes meet the Decent Homes Standard. They must have an internal system for handling and resolving tenant’s complaints about their homes.

The Housing Ombudsman Service is a public body (in England) which serves as a system for resolving complaints when these internal systems have failed. It is sponsored by the Department of Levelling Up, Housing and Communities.

The Regulator of Social Housing (RSH) is another public body which regulates the social housing sector. However, historically it has not handled individual disputes between landlords and tenants. Broadly it is tasked with regulating the business practices of social housing providers. It can take action against landlords but only when they have made, in their words, a ‘significant, systemic (widespread) failure’ that breaches the standards they have set. The recent Social Housing (Regulation) Act 2023 has widened its powers however.

The role of local authority housing enforcement in the social sector is, perhaps, an interesting one. Although ostensibly local authorities do have powers in this area there is not much evidence that they have a willingness to use them, or do.

For example, in their Private Sector Housing Enforcement Policy document Leeds City Council’s stance is not untypical. It says: ‘The private sector housing service has investigative and enforcement powers relating to all private housing regardless of tenure. However the approach may vary depending on the tenure of the household.’

They add: ‘This service will not normally take action against an RSL (registered social landlord), unless the problem in question has been properly reported to the RSL, who has then failed to take the appropriate action. The council will consider enforcement action against an RSL where there are significant risks to the health and safety of tenants and/or the wider public.’

Milton Keynes City Council’s Enforcement Protocol document says that the responsibility for standards in homes provided by housing associations and registered providers rests with those organisations. And that complaints should be referred to the landlord and the Housing Ombudsman. It says: ‘The Council will only assist RP (registered provider) tenants if the property has a category 1 hazard or is a House in Multiple Occupation which does not comply with safety or amenity standards, and where the RP’s own procedures have not resolved the issue.’

Ultimately of course all tenants, including social, can take legal action against their landlords in the courts.

The role of the Housing Ombudsman Scheme

All local authorities and registered social housing providers must be members of the Housing Ombudsman Scheme. This scheme says that it aims to provide a free, independent, and impartial service to investigate complaints. Its work is funded by landlord subscription fees.

The Housing Ombudsman Scheme can only investigate housing complaints if they have first been referred to the housing provider and if the tenant is unhappy with the response (or if they have failed to respond).

The Housing Ombudsman Scheme isn’t a court. Despite what the newspaper article suggests it doesn’t have the power to issue fines. It doesn’t have the inspection and enforcement powers that local authority housing officers have. However it does have some legal powers to order social housing providers to take action and to pay tenants compensation when they have failed in their legal responsibilities.

The facts behind the headline – is the Housing Ombudsman really that ineffective?

The investigation published by the Observer makes some serious allegations – that tenants are living in ‘squalor’ but landlords are not being taken to task for it. However, dig deeper behind the headlines and there are, perhaps, some reasons why the failings seem serious yet the compensation seems small.

Firstly, the average figure of £445 compensation is just that – an average. Averages can always be quite misleading. There could have been a large number of very minor cases and a small number of very serious cases over this period.

As the newspaper’s article points out, the figures they have used only show the compensation ordered by the Ombudsman. It adds that in some cases it was not clear if the payouts ordered were in addition to or part of any existing financial settlement given by the housing provider or any other party.

The article also does not cover the topic of insurance. The Housing Ombudsman’s website suggests that tenants may be able to claim from a landlord’s insurance for any damage caused to their property for example.

As the article does point out, one reason why the figures appear low is that the Ombudsman usually decides on settlements based on the amount of rent paid by the tenant over the course of the period covered by the complaint. Therefore, even if the complaint was very serious the compensation will be low if the rent paid was low.

What the article does not point out is that the Housing Ombudsman only orders compensation when they find that there has been maladministration. It also does not point out that the amount awarded depends on the circumstances of the case and that it is usually for the time and trouble, or for distress and inconvenience experienced by the complainant.

Very importantly, the Housing Ombudsman do not order compensation for the impact on a tenant’s health/medical issues. It is quite possible, therefore, that a tenant suffered serious health issues – which can occur with damp and mould for example – but this could not be reflected in the compensation awarded.

The response from the Housing Ombudsman

In the Observer article the Housing Ombudsman Richard Blakeway responds to the newspaper’s claims. He says: “In the past year, we have increased the amount of compensation we are offering per case and are now regularly compensating based on the rent paid by the resident during a period of service failure.

“We have recently ordered over £10,000 in several cases that are due out in the coming months. In 2022-23, we awarded over £1m in compensation for the first time, and that was almost double the amount from the previous year.”

The Housing Ombudsman’s own figures say that following the investigations in 2022-23 they made 6,590 orders and recommendations which included ordering or recommending £1.1m in compensation. Very recently the Ombudsman has ordered Lambeth Council to pay £13,000 in compensation after it made six severe maladministration findings across three cases (circa £4,300 compensation per case).

Final thoughts – important to look at the bigger picture

First and foremost, it would be wrong not to point out that the newspaper’s headline for this article does not make it clear that the investigation relates to social landlords and not all landlords. A casual glance could easily have the reader believe it is an assault on the wider lettings market including the PRS. The reference to fines is also to some extent misleading – these payments are not fines.

Secondly, the article does not make clear that the Housing Ombudsman’s remit – in relation to the cases it can handle, what it can require to be done and the amounts it can award – are pretty limited no matter how serious the issue.

Very importantly, it is also essential to bear in mind that the system of enforcing housing standards is not all that it perhaps could be. If the Housing Ombudsman is in any way deficient that perhaps indicates deficiencies with the wider system.

It wouldn’t be unfair to say that the enforcement of housing standards is something of a mishmash. It involves landlords themselves, governmental bodies, local housing authorities and the courts with differing responsibilities across the private and social sectors. Landlords, tenants and even official bodies often seem unclear about who is responsible for what.

When it comes to standards in the social sector it seems that landlords are largely trusted to do the right thing for the tenants – with the Housing Ombudsman and RSH merely acting as a safety net when they fail. And when it comes to local authority housing enforcement it seems that local authorities are generally content with this situation. It is very hard to find any evidence of local authorities taking the same firm stance with social providers that they often do with PRS landlords. Possibly they do not have the resources to do so either.

Even the Shelter organisation – who some may regard as an authoritative source of knowledge on tenants’ rights – simply directs dissatisfied social tenants to use the Housing Ombudsman’s scheme. So, it is possible most social tenants do not even realise they could raise their problems with their local council at all.

At the end of the day the newspaper’s headline is clearly a ‘shock horror’ headline. It is designed to grab attention. It raises a serious issue – the enforcement of housing standards is not what it could be. But to suggest that the Housing Ombudsman is standing by while tenants live in squalor and landlords get away with it is not entirely fair. As we have tried to explain here, there is much more to the situation than that.