Rental homes should be confiscated from private landlords who repeatedly break the rules and exploit tenants, the head of the Commons housing committee has told the Guardian. Clive Betts, the chair of the levelling up, housing and communities select committee, said handing courts the power would create a “significant deterrent” to landlords who treated fines for letting out squalid, unsafe and overcrowded homes as simply a cost of doing business. Confiscated homes could become the property of councils, which could then use them to house people in need or sell them off to raise money for social housing, the Labour MP said. The threat of seizure would “bring landlords up fairly sharply, because some of those properties are worth quite a lot of money”, he added. The committee previously proposed a version of the idea in 2018 but it was rejected by Theresa May’s government. In its Living Hell series, the Guardian is shining a light on issues in the private rented sector, including the case of Mohammed Ali Abbas Rasool, a rogue landlord in London who caused misery for tenants for more than 10 years despite repeated fines, prohibition notices and bans. One housing official involved in investigating Rasool’s case thinks he and other landlords built the expectation of fines into their business model “and take the hit”. In an interview about the state of private renting in England, Betts also said: It was “probable” the delayed ban on “no-fault” evictions would not come into effect until after the next general election. It was first promised by May in spring 2019. Squalor in private rented housing had been made worse and was underestimated because tenants were “simply too frightened to report disrepair”. Labour’s policy to boost social housebuilding by negotiating harder to get private developers to build more would not solve the housing crisis. His cross-party committee recently clashed with ministers over their handling of the ban on no-fault evictions, which the housing secretary, Michael Gove, delayed indefinitely this month, citing the need to first reform the courts to allow landlords to evict tenants for reasons including antisocial behaviour more quickly. Betts said the committee was “very angry” that the government had cited its concern about court capacity, which it first raised four years earlier, when explaining the delay. No-fault evictions allow landlords to eject tenants without giving a reason. A ban was part of the 2019 Conservative party manifesto but Tory backbenchers, including many who are also landlords, have opposed the change. Betts said that because of the delay, no one who rented privately or under the current tenancy arrangements could have any certainty about where they would be living in a year’s time. He said the delay had meant an “awful situation for a family thinking not only about where their home will be [but] about where your children’s school will be, how you are going to get to work”. Betts said tougher action was needed to deter landlords from mistreating tenants. “They’re putting tenants in appalling accommodation, they’re using the threat of eviction to make sure that they don’t get complaints and they are oblivious to the fines that are levied against them,” he said. “All that needs to change and needs to change quickly. Not waiting for some court reforms in five or six years’ time.” The National Residential Landlords Association (NRLA) opposed the idea of new penalties. It said councils could already take over properties owned by repeat offenders and seize assets from criminal operators. “Unfortunately, neither set of powers is fully and routinely utilised,” said a NRLA spokesperson. “This will go a long way towards deterring rogue and criminal landlords.” Betts was also critical of Labour’s housing policy, which he said would fail to build the social housing needed to help resolve problems with the private rented sector. Angela Rayner, the shadow housing secretary, told the party conference last month that a Labour government would require private developers to build more affordable housing as a price of planning consent. The cross-party housing committee has estimated that 90,000 new social homes need to be built each year and relying on developer contributions would not deliver that. Betts said a multibillion-pound increase in state subsidies for social housing was needed instead. “As one witness very simply said to us, you can’t have subsidised housing without subsidies,” he said. “That’s going to be a challenge for any new government.” Labour has said if it wins the general election it will ensure all existing funding available for affordable housing is spent and it will assess the inherited situation to create a robust plan. A spokesperson for the Department for Levelling Up, Housing and Communities said: “The small minority of criminal landlords who exploit their tenants can already be banned by councils and rightly should be. Our landmark renters reform bill offers better protections for tenants and gives them greater security than ever before to challenge poor conditions in their homes. “The bill also abolishes section 21 ‘no fault’ evictions and redresses the balance between landlords and tenants. The reforms will ensure that landlords who repeatedly don’t live up to obligations to their tenants can be prosecuted or fined up to £30,000.”