Strengthening Consumer Redress in the Housing Market

Response to MHCLG Consultation

About us

The Northern Housing Consortium (NHC) is a membership organisation that works with local authorities and housing associations across the North to advance the cause of housing.  Our membership covers around 90% of all housing providers in the North.  The NHC brings its members together to share ideas, and to represent their interests and to ensure they are heard at a regional and national government level.  Our member organisations have contributed to this response.

Introduction

The government’s intentions to improve redress across the housing sector is welcome and we are aware from evidence from our members that, at this time, and in the context of calls for a cultural change, improving consumer redress could be part of delivering a shift to a new way of working which demands increased resident involvement.

We are talking to our members about existing good practice and how this can be collected and used.

In this current environment, it would benefit all of our partners within the housing sector to support local places to build strong links between organisations and people, and to make best use of the evidence gleaned through listening to people in local areas – including where things have gone wrong.

In providing this response we have drawn on our extensive activities around tenant engagement.  The NHC regularly brings together tenants and landlords for a frank exchange of views and the information gathered at these events is used by landlords to improve their working practices.

Last year, on 26th October, the NHC hosted and facilitated a landlord and tenant engagement sessions with Alok Sharma, the former Minister of State for Housing and Planning, alongside the then Department for Communities and Local Government (DCLG).   Representatives from around 30 NHC member organisations attended the meeting, with more than 80 residents from across the North East and Yorkshire and Humber.

Our response to the consultation questions includes evidence gathered at this event, as well as other recent member and tenant engagement sessions.

Q8: What do you consider to be the main problems with redress in the housing market?

It is not clear who to raise a complaint with

Not everyone has the same access to redress

Overlap between schemes

The NHC believes that no matter what the issue or complaint the redress system should be consistent.

It is important to ensure a seamless service to complainants and to eliminate confusion regarding overlapping boundaries between different ombudsmen and other routes for redress.  While there are overlaps between different services, there are also gaps in the current redress system, not least that private landlords have been exempt from any obligation for redress.

Collaboration between the existing ombudsman schemes and with the private sector redress schemes has been beneficial, but a single, combined housing ombudsman scheme would be a preferred option.

Q9: Which solutions do you think would best improve redress in the housing sector?

Improvements to the working of existing redress schemes e.g. more timely complaint handling

Schemes all operating to the same criteria/standards

Streamlined redress provision in housing

Feedback from NHC tenant engagement has underlined the need for standards as a key measure in improving consumer protection in the sector.  Operating minimum standards brings benefits to landlord and tenant relationships and reduces disputes within the sector; it will also assist local authority environmental, housing and tenancy relations staff in their advisory and supportive work.

Q10: Could more be done to improve in house complaint handling for housing consumers?

Tenant engagement is strong amongst Northern housing providers. NHC roundtable discussions with residents have shown a wide variation of methods in the way that residents are listened to and we fully support a ‘no wrong door’ approach to enquiries or complaints.

Access routes should be clear, quick and effective for residents to raise concerns and be listened to.  This requires an organisational culture which is accepting of complaints and feedback and which ensures that it is evident at all levels from board level and through to the front line.

One of the overarching outcomes from our tenant engagement activity is the need for a more sophisticated understanding of the two-way relationship between tenant and landlord.  Staff receiving complaints have  to be empowered and be able to deliver a solution to the customer with support from the organisation.  If there is clear communication about why customer service is important, a redress scheme has the potential to act as a catalyst for driving positive improvements.

When things go wrong for a tenant, those housing providers with well-developed arrangements will make sure they embed learning from mistakes and public feedback into their business planning.

In talking to residents about how they feel about where they live, and how services are provided to them by their landlord there was a very clear acknowledgement that local resolutions can play an important part in reconnecting disenfranchised communities — these are issues we know are key to our members as landlords.

A number of housing associations are successfully using sophisticated techniques to develop a deeper understanding of the preferences of residents by analysing basic queries and complaints.  This also helps to ensure a diverse range of voices are heard.  This backs up evidence we have gathered which shows the need for a flexible range of options for residents to have their voices heard so that it doesn’t necessarily require people to come to attend formal meetings.   Getting out to where different groups of residents live in order to reach them and gather views is important: as is working with other community-based organisations who may find it easier to reach isolated or ‘hard to reach’ groups of residents.

Q11: Are there common practices that housing consumers and businesses should be able to expect from a redress scheme, or do different sectors in housing require different practices?

Yes – there should be common practices for consumers

 

Q12: If you believe there should be common practices that consumers should be able to expect from a housing redress scheme, what should they include?

Policies to support awareness raising

Timeliness of complaint handling

Codes of practice specific to the sector

Cost to members/ payment structures

Transparency of decisions

 

As a minimum there should be obligations in protocols or codes of conduct to provide standardised written information for consumers. This would need to be the pertinent information, such as the tenure, service charges, lease length and the impact of ground rent provisions.

While we support common practices and minimum standards, we would be concerned a generic complaints handling approach should not impact on the expertise that is required for each sector.

Q13: Do you think that a redress scheme should publish decisions and the number of complaints relating to different providers?

We believe there is a benefit to complaints information being made public and we would support the move towards further transparency which will be in the spirit of service improvement and raising standards across the sector.

 

This could be enhanced by the sharing of insight from complaints with thematic reports or good practice guides which would be beneficial, for example, on health and safety.  In addition, the categorisation of complaint types to help identify and track case, such as fire safety cases would also be helpful.  Further equality-related impacts may be useful to understand the impact on residents from particular service issues and neighbourhood problems with the aim of delivering a more efficient and effective services to all tenants.

 

Q14: What is a reasonable time frame for a redress scheme to deal with a complaint?

It depends on the complexity of the case.

 

Our tenant engagement sessions did not cover this specific aspect but we are aware from the evidence provided that residents want early resolutions to any issues and difficulties to eliminate local tensions as quickly as possible.

 

Q15: How should a redress scheme support consumers to access its scheme?

It is important that any redress scheme is free to access and available for any type of dispute.

We know from our evidence that in cases where there is an understandable reluctance by residents to raise complaints for fear of reprisals that the complaints process is not satisfactory.   We have heard from residents about the difficulties and tensions in raising certain complaints, for example, in cases of anti-social behaviour.  The complaints process can be at its most bureaucratic and unhelpful where there are local tensions which involve others in the neighbourhood.

Feedback from our landlord and tenant engagement has also shown that the current court system takes too long and is too expensive for landlords, as well as for tenants when they need to tackle a landlord providing sub-standard housing.

The current arrangements have, for some, acted as a barrier to accessing the service; particularly the provisions on “designated persons” which could delay access to the ombudsman, or even prevent it altogether.  We understand that for some vulnerable complainants who may not have the skills to navigate through a landlord’s complaints procedure that a designated person is an appropriate choice if that is what the resident wanted.  However, it is possible that an escalation of the original situation which gave rise to the complaint could occur during an eight weeks delay and residents have to live with problems every day.

 

Q16: What kind of sanctions should a redress scheme have access to?

A range of options depending on the type and size of provider

 

An ombudsman service needs to be able to provide adequate redress for complainants.  If an ombudsman service cannot actually provide ‘redress’ then it becomes irrelevant.

We believe there should be wide powers of redress, including ordering the payment of compensation and requiring the performance or non-performance of contractual or other obligations or rights. The power to make orders on the completion of an investigation should be made enforceable if necessary (e.g. by secondary legislation).   If an ombudsman service is to cover the private sector, then it is likely that binding powers will be necessary.

The range of options for sanctions should not only take into account the type and size of provider, but also the nature of the issue which could include personal injury and a scale of aware should be reflective of the severity of the personal loss or injury.

Q17: Have you encountered any gaps between different issues, ombudsmen and redress schemes in terms of their areas of responsibility?

Overall, there has been a deficit across different housing sectors, in particular, the private rented sector.  While services provided by the state give access to redress, when services are private, then access to redress can be either non-existent or confusing.

 

With the establishment of new housing delivery models through joint venture companies, there is a risk that it will remain unclear who is responsible for putting things right.   Local councils can set up delivery companies and outsource their services, but not the responsibility for them. It is important that where services are separated from the council that there is still a robust oversight of any organisations set up or contracted and with clear arrangements in place for how complaints will be dealt with.

It would be a backward step if a new housing ombudsman service limited redress only to non-commercial services.  The diversity of independent and private arrangements needs to be clearly accountable including privately run residential homes for older people and market rented tenancies of local housing companies.

Q18: Should purchasers of new build homes have access to an ombudsman scheme?

Yes

 

Q19: Is there an existing ombudsman scheme that is best placed to deliver this? If so which?

We would support a single redress scheme. We would not wish to see multiple systems for customers across both the rented and owner-occupied sectors.  A new scheme could take good practice from schemes already in operation, including for example, The Property Ombudsman, The Housing Ombudsman, The Financial Ombudsman and The Energy Ombudsman. The model would therefore need to be broadened to ensure that it captures the wider range of activities and responsibilities.

 

This will be a good way of applying pressure on house builders and warranty providers to deliver a better quality service.

Q20: Should this body be statutory?

Yes

 

Q21: Aside from the issues discussed in section three of this document, are there other things we should be considering to ensure that complaints are dealt with swiftly and effectively by homebuilders?

The purchase of property is different from most consumer purchases. There should be a more detailed set of requirements about the information that needs to be given before the consumer decides to buy. This needs to be set out and effectively enforced. Consumer Protection Regulations (CPR) have been too light touch and this has not served consumers well.

CPRs are not robust enough to protect consumers and we would advocate that government should take steps to strengthen the regulation of estate agents.

Q22: Should the requirement for private landlords to belong to a redress scheme apply to all private landlords?

Yes

 

Q23 Who is best placed to provide a redress scheme for private landlords?

A new ombudsman, such as a single housing ombudsman.

 

We welcome the proposal for private landlords to be required to join a redress scheme, which will give tenants access to an ombudsman scheme as a means of dispute resolution instead of relying totally on the courts based system.

We believe that a scheme should build on existing good practice which has been established by professional bodies.  We are broadly supportive of the measures outlined in the Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill which extends to all housing tenures, councils, housing associations, private landlords and build-to-rent will be on an equal footing.

A particular focus should be on raising awareness of rights and responsibilities, and on professionalising the less compliant elements of the sector and connecting to other minimum standards such as the Decent Homes Standard.

Q24: How should redress scheme membership for private landlords be costed?

A tiered system according to the number of properties a landlord lets

 

We support a quick resolution procedure, funded by a levy from landlords. The costing around any system could address the link between the poorest quality accommodation in the PRS and tenants in receipt of housing benefit,.  We would advocate a system whereby properties, on which benefit could be paid, should be required to be accredited in accordance with a recognised scheme.

Q25: How should the requirement to be a member of a redress scheme be enforced and by whom? And are there any other markets we can learn from in order to ensure compliance by a large number of small scale providers?

A redress scheme needs to not only provide the prospect of enforcement activity, but to offer incentives for landlords to become a member by, for instance, restricting the powers of those who fail to comply with regulation, and offering incentives to those who do.  Ultimately, the purpose and advantage of a scheme is a means to improving management and property standards in the sector, rather than an uptake of membership in itself.

 

Q26: What should the penalty for initial non-compliance be? If a financial penalty, what would be an appropriate level of fine?

Financial penalty

Criminal offence

Banning order

Loss of right to evict tenants under section 21

Civil sanction such as improvement notices or enforcement notices

 

Q27: How can Government best ensure that landlords are aware of their requirement to belong to a redress scheme?

A particular focus should be on raising awareness of rights and responsibilities, and on professionalising the less compliant elements of the sector and connecting to other minimum standards such as the Decent Homes Standard.   Accessible guidance and information should be provided to tenants about their rights and the obligations of landlords and managing agents.  Awareness would be aided by facilitating and encouraging communication through tenants’ associations. Tenants and leaseholders should be made aware of landlords and agents who are not part of any scheme in a designated area.

 

Information should be provided in writing to the tenant when they sign the contract, including details of any redress scheme. This could be provided in a model tenancy agreement, and could be signposted in documentation that all landlords and agents have to provide to their tenants.

 

Q28: Are there any other voluntary or medium term measures that could be implemented to improve redress for tenants in the private rented sector ahead of any legislative changes?

There was broad consensus amongst our membership that local authorities have a range of powers available to them to enforce standards in the private rented sector – ranging from HHSRS powers through to new provisions from the Housing & Planning Act 2016.  However, NHC members did raise issues with aspects of the powers available to them – in summary these are:

Some powers are resource intensive and can be lengthy in process and

Some powers should be extended (specifically HMO mandatory licensing).

 

There is a consistent message from NHC members on powers and capacity which is that the powers that exist are welcome but do not (by themselves) enable proactive systemic change to take place and this limits effectiveness, particularly in the private sector, in being able to raise standards.

NHC members felt that whilst they sought to promote routes to facilitate complaints, the vulnerable nature of some tenants in the private rented sector meant that complaint routes were not fully utilised.  Many councils cited tenant fears over retaliatory action (notwithstanding the new legal protections) as limiting confidence of tenants to raise concerns.

 

We believe that other practical considerations could include: a kite-mark scheme for landlords and agents to demonstrate their compliance with the standards; forums for landlords and agents to provide a platform for discussion, training related to new regulation, an easy to use portal for tenants to log their complaints, and model agreements which would ensure that all agreements are legally compliant.

 

Furthermore, a consumer champion could use their status to amplify the voices of tenants and leaseholders, increase accountability and challenge unfair practices. They will also be able to highlight specific changes and improvements that will make a difference to tenants and leaseholders.

 

Q29: Do you think that freeholders of leasehold properties should all be required to sign up to a redress scheme?

Yes

 

Q30: Should we streamline redress provision in housing, and if so, what would be the most effective model?

Yes, with one single ombudsman scheme covering housing issues.

 

The benefits of a single ombudsman scheme would be to ensure a seamless service to complainants and eliminate confusion regarding overlapping jurisdictional boundaries between different ombudsmen.

We believe that a single ombudsman will achieve this aim for some complainants in relation to investigations which also relate to local government, health or central government functions.

There is also clearly potential to further develop the approach to complaints regarding redress in the private sector which could also incorporate some of the improvements put forward in relation to purchasing a new home.

The role of a housing ombudsman has the potential to grow as the private sector will grow in both general and specialist housing and would offer a positive and effective alternative to the courts as a method of resolving disputes.

 

A combined ombudsman would provide a useful “one stop shop” for some complainants.  However, housing is relevant to so many issues that a housing ombudsman needs to work effectively across a wide variety of service areas including financial services, health, and social care. Careful consideration will need to be given to those areas where jurisdiction may be unclear such as local authority responsibility for housing and housing allocations and the responsibilities and accountabilities of Local Housing Companies.

A clear and effective delineation of jurisdiction and an effective working relationship between the ombudsman and the social housing regulator is also essential for driving up standards in the sector.

Q31: If you ticked ‘Yes’ to one ombudsman or one portal above then which areas of redress should be incorporated?

Social housing tenants

Private rented sector tenants

Leaseholders with a private sector freeholder

Leaseholders with a social housing provider as freeholder

Purchasers who have bought a new build home

Purchasers and sellers of existing homes

Park home owners

Persons applying for a tenancy with a housing association

 

Conclusion

 

The NHC very much welcomes an approach to strengthening consumer redress in the housing market.

 

We believe this would support improvements to the quality and management of property, and in turn, this would support better management practices thereby reducing the potential for challenge and conflict between residents and landlords.

 

 

For further information

 

Karen Brown

Senior Policy Advisor

Northern Housing Consortium

karen.brown@northern-consortium.org.uk