A new report from the CHI (Chartered Institute for Housing) says that the government should increase taxes for bad landlords and reward those who are good, by reducing their tax contributions dependant on the living standards they offer their tenants.

The Institute states that approximately one third of  private rented homes fall below the government's  decent homes test.

Standards would almost certainly improve if landlords were subjected to this type of tax ruling, as those who spent more on their properties and maintenance would be able to claim more tax back.

The UK Housing Review 2014 from the CHI contains comments from its chief executive Grania Long, that those landlords who do not maintain their property to a decent standard should be penalised by increasing their property tax contributions to make them do so.

The HMRC has released figures that show that all in all  landlords receive tax allowances and reliefs of around £7 billion a year, the majority of which is setting off mortgage interest as a property business expense.

Landlords who do invest heavily into a property may not see too much benefit from their expenditure until they sell it. This includes expenditure on loft conversions, extensions and upgrading fittings and fixtures.

The cost of all maintenance and repairs are taken off the annual rental profits.

Grania Long said: “If landlords who committed to a higher level of standards benefited from a more targeted allowance, while those who did not saw their allowances stay the same or even reduce, the government could encourage higher standards – without needing to find any extra money.

“This government has focused on measures to boost home ownership, but with more and more people living in the private rented sector – including older people, more families with children and more vulnerable people from the housing waiting list – it’s vital that we look carefully at new ways to raise standards.”