Ombudsman calls to extend his powers to the private sector

The independent housing ombudsman has called on the government to back a £2m plan to extend his powers to the private sector.

Dr Mike Biles said he wanted private landlords to be obliged to sign up to better standards and independent arbitration.

He said the proposal should be incorporated into the draft Housing Bill, due to be passed by both houses of parliament by Christmas.

Biles said: "I am the housing ombudsman, I believe I should be allowed to be the ombudsman for housing. At present, local authority tenants with a dispute can turn to the local goverment ombudsman, registered social landlord tenants can turn to the housing ombudsman, but private sector tenants have no recourse."

The ombudsman has powers to resolve disputes between landlords and tenants under the 1996 Housing Act. However, although 2300 RSLs have signed up to the scheme, only 30 or so private landlords have done so.

Biles estimated that his staff of 34 people and £2m annual income would need to be doubled to settle disputes in the private rented sector. This could come from private landlords, he said: the ombudsman is funded by a fee from housing associations – landlords pay £1.05 per year per unit – but overseeing private tenants' disputes would add 2 million houses to the ombudsman's remit, and charging these a similar fee would bring in the required £2m.

RSL tenants can turn to the housing ombudsman, but private sector tenants have no recourse

Dr Mike Biles

Biles' call is likely to reopen the controversy over whether private landlords should be licensed. The government has so far rejected this approach for fear of over-regulating the private sector, but some believe that requiring landlords to join the ombudsman scheme would be a halfway house to full licensing.

Malcolm Harrison, spokesman for the Association of Residential Lettings Agents, said: "You have to make sure that any legislation doesn't overburden the market with red tape and frighten away the good landlords, which this government desperately needs to address the housing shortage."

Biles' demand follows the release of a report by homelessness charity Shelter on Wednesday last week. It criticised the "scandalous" lack of legislation in the Housing Bill to protect private tenants' deposits.

Shelter's study found that £20m in tenants' deposits is wrongfully withheld every year. The problem affects 127,000 people. Shelter said the government's failure to address this in the Housing Bill could increase homelessness.

In June, the government withdrew funding for a voluntary tenancy deposit scheme to safeguard deposits after it failed to attract interest from private landlords.