The dramatic rise in housing disrepair
Every tenant who pays their rent when it’s due has the right to live in a property in a good state of repair. Tenants’ homes should be free of issues detrimental to health and safety, and well-being, such as dampness and mould, pest infestations, malfunctioning water and heating provision, fire hazard, drainage and flooding issues, and also structural problems.
But, in recent years, and particularly since 2017, caseloads for solicitors handling social housing disrepair claims have risen dramatically, and continue to do so.
Increase in legal grounds for complaint
The number of tenants suffering distress and inconvenience, as well as negative impacts on their health and well-being, as a result of housing disrepair is staggering, and consequently, the number of cases of those with rightful, legal grounds for disrepair claims keeps on climbing.
Councils’ legal costs double in four years with a 132% rise in cases
Local authorities’ rising legal costs for social housing disrepair claims are nationwide. Figures, gathered by Inside Housing, from 70 English councils, show a 132% increase in cases, and a year-on-year increase in costs from 2017-18, to 2020-21.
- 2017 – 2018 – £7,868,748
- 2018 – 2019 – £10,624,239
- 2019 – 2020 – £12,646,680
- 2020 – 2021 – £14,325,758
The figures represent approximately 17,000 disrepair claims with an estimated £55.1 million paid out. And this is not even the whole story, as approximately 100 local authorities did not contribute data.
One London council alone sees 600% increase in four years
Taking just one local authority alone, Lambeth London Borough Council, they stated their social housing disrepair claims increased by 600% in the last four years, with an average expense bill of £3 million a year for damages, opposition legal fees and their own defence costs.
What’s behind the surge in social housing disrepair claims?
There are many contributing factors to the dramatic rise in cases, creating a perfect storm for local authorities in meeting the legal resource and costs to deal with the continuing increase in the numbers of tenants with grounds for complaint.
Only this year, the Government declared a “backlog of need” among those currently in unsuitable accommodation, indicating the starkness of the situation, and going some way to explain the sheer number of tenants seeking legal address and therefore the knock-on effect for the legal industry.
Lack of Government funding for social housing
A root cause of the surge in housing disrepair claims is commonly acknowledged to be the impact of years of underfunding in social housing and the ensuing lack of routine repairs, maintenance and modernisation carried out. Homes have been left neglected with issues for tenants going unaddressed. Outside of the Decent Homes Programme there has been very little funding allocated to council housing stock, and, in fact, the last push for council housing was seen during the post-war era.
Rising costs of repairs
The National Housing Federation (NHF) recently issued a warning that costs for new homes, repairs and maintenance are all rising above inflation, posing challenges for many social landlords. Inflationary pressures, labour and material shortages, as well as global supply chain issues, have all led to a 33% decrease in investment in major repairs across the sector.
Scrapping of Legal Aid in 2013 for housing disrepair claims
In 2013, Legal Aid for housing disrepair claims was scrapped, unless it was for a case where the disrepair is so severe it poses a risk to tenants’ wellbeing.
The rules for Legal Aid, were acknowledged to be stringent, prior to the scrapping, which provided a filter for spurious claims coming to court. Now that the legal aid has gone for most cases, there has been an inevitable growth in no-win-no-fee cases and CFA (Conditional Fee Arrangement) work, however, many solicitors still say around eight of ten cases now coming through are genuinely valid claims.
Homes (Fitness for Human Habitation) Act 2018
When the 2018 Homes Act came into force in March 2020, it shone a spotlight on tenants’ rights, giving them the power to take legal action against landlords. The new Homes (FHH) Act opened the floodgates for claims against private landlords and could very likely have had an impact in shifting tenant focus to these claims.
The Jackson Reforms of 2013
The ‘Jackson Reforms’, named after Lord Justice Rupert Jackson, the judge who proposed them, brought a wave of reforms to the personal injury market in 2013. The most significant of the reforms was a cap on legal fees at 25%, and also that the fees now come from damages paid to the claimant, rather than the losing party. However, there is no such cap, or limit, on housing disrepair claims, which many says has exacerbated the rise in these types of claims.
The future of housing disrepair claims?
Although there is no movement from Government yet, Lord Justice Jackson wants to reform housing disrepair claims in line with those of the personal injury market and introduce Fixed Recoverable Costs, which would go some way to curbing so-called ‘claim farm’ type proceedings.
While the housing disrepair claim industry is acknowledged to be in need to reform, to remedy disparity in compensation amounts and legal fees, the grounds for legal recompense for tenants remain. The last English Housing Survey states there were over 75,000 ‘non-decent’ properties in the UK, pointing to the continuing lack of investment in social housing stock.
Prosperity Insurance experience in housing disrepair claims
Prosperity Insurance offers competitive deferred premium structures for all social housing disrepair claims and a wealth of experience in dealing with claims in this sector. Our contacts in the industry can mean significantly lower costs, enabling your clients to access the justice and compensation they deserve.
Please talk to us directly at 0800 524 4235 about any social housing disrepair claim, or for further information about any ATE policy. Alternatively, you can email us at info@prosperityinsurance.co.uk.
