Licensing and Accreditation in the private rented sector (PRS) Suzanne McBride Housing Lead, EELGA Talent Bank
What we will cover... • Issues for LAs and their relationship with the PRS • Accreditation of the PRS • Licensing of the PRS • Links to other interventions including lettings agencies
A Growing PRS .. • PRS: – Grown by an average of 50% from 2001 – 2011 – Most districts in the East have seen growth of at least a third. Some wards have seen much more rapid growth – Now bigger than social housing sector in many parts of London – eg makes up over 40% of tenures in Newham – Becoming more important as provider of housing for those in need – Source of housing supply for LAs – Variable standards – Impact of Welfare Reform
What are the issues? • Poor standards of housing • Overcrowding • Poor management including illegal eviction • Illegal conversions and other contraventions of planning legislation • H&S breaches • High turnover • ASB associated with rapid turnover • BUT MOST PRS IS WELL MANAGED
Solutions? • Accreditation / Support / Training – Landlord forums – Landlord training – Tenant checks / accreditation • Enforcement using existing statutes to tackle standards – HHSRS – Planning Regs • Challenges with enforcement – Identifying where rented homes are – Identifying landlords – Tenants afraid to report issues • Licensing ?
Accreditation • Voluntary • Local LA run schemes generally focus on good rpactice, training • Low charges but limited incentives • Low take-up • May be linked to – access to nominations under homelessness legislation – Grants and loans for property improvements – Speedier handing of HB payments
LA accreditation schemes • Specific accreditation schemes for the PRS have been introduced by Liverpool City Council, Oxford City Council, Rochdale Metropolitan Borough, councils in North and Central Staffordshire (joint scheme) and Leeds City Council (amongst others) • Mayor of London’s Housing Covenant – still a voluntary scheme; aims to have 100,000 London landlords accredited by 2016
UK Landlord Accreditation Partnership (UKLAP) • Launched in 2004 – a partnership of landlords, local authorities and providers of university accommodation • Hosted by LB of Camden • Over 11,100 landlords and 800 agents • Particularly active in London • Other schemes linked to UKLAP include Kent Landlords LAS, Hampshire LAS, Thames Gateway LAS, Sussex LAS • Landlord/agent focussed • Code of practice for landlords/agents. • Training offered, CPD expected • Spot checks on landlords/agents to check compliance
LA Licensing schemes • These have been introduced under the Housing Act 2004. • Compulsory licensing: once scheme in place, landlord must register or face a fine • ‘Additional’ licensing for HMOs (covers properties with two storeys or less) – Prove that there are significant properties in this category. Can be whole district or borough. • ‘Selective’ licensing for other parts of the PRS: – Proof needed of either low demand and/or anti social behaviour – Covers area identified as causing problems – Must consult before bringing in a scheme
LA licensing schemes – there are more than you think... • • Blackburn Newcastle • • Blackpool Newham • • Bolton Oldham • • Burnley Redcar and Cleveland • • Durham CC Southend on Sea • • Gateshead Stoke on Trent • • Hartlepool Sunderland • • Hyndburn Thanet • • Leeds Wolverhampton • • Manchester Waltham Forest • Middlesbrough
LA licensing schemes • Some of these schemes cover more than one area in a local authority (eg , Durham’s and Thanet’s) • Some are in the consultation phase • Most schemes are in the North of England • Some schemes have been introduced because of evidence of both low demand and ASB in a neighbourhood • Significant number of London Boroughs now working up schemes
Some observations on licensing the PRS • Newham exceptional in achieving Borough-wide coverage with scheme - most Councils will find that difficult to achieve • Gathering evidence of ASB and then consulting on proposals is expensive – but can lead to identifying where PRS properties are • Legal challenge of proposals by landlord interests is always possible • Fees need to be reasonable – can be tolerated by landlord interests; Newham’s £500 fee seen as fair • Fees can help pay for administration but enforcement must be paid from General Fund (recent legal case involving Westminster Council)
Characteristics of accreditation/licensing schemes by LAs • Voluntary/compulsory: membership of an accreditation scheme is voluntary although licensing schemes are compulsory • Cost of membership: membership is often free but some local authorities charge for membership of a scheme to cover their costs; Newham charges the most (£500 for five years registration) • Period of membership: variable up to five years (Newham); most schemes operate monitoring systems that check landlords/agents and/or individual properties every year sometimes on a selective basis • ‘Fit and proper’ person test of landlords: universal
Characteristics of accreditation/licensing schemes by LAs ...(cont’d) • Individual PRS properties: covered by all selective licensing schemes and most LAS but not by UKLAP • Coverage : generally one LA but can be sub-regional • Benefits to landlords/agents: membership of a local authority backed scheme provides a range of business and other benefits; some schemes provide a wide range of additional – often free – benefits (eg, Rochdale’s) • Benefits to tenants: assurance that the local authority has approved the landlord and/or agent as a ‘fit and proper’ person to run an accredited/licensed business; some schemes also give assurance about the standard of accommodation provided
IS licensing appropriate in your area? • Is the PRS growing? • Are unregulated HMOS causing a problem? – - > consider “additional licensing” – lower level of proof required, simple to launch. • Are some areas experiencing problems linked to ASB (or to low demand)? – - > consider “selective licensing” – Needs good, robust level of evidence – Services available to identify where PRS homes are
Is licensing appropriate? • Start up costs are high (especially around IT) • Not all on-going costs can be recouped through income: may be an increase in enforcement costs • Can tackle a range of issues: Newham’s scheme revealing extensive informal cash-based and illegal PRS and dealing with some types of criminal behaviour in the Borough • May drive up rents / drive out PRS: is this what you want? • Effective partnerships with others i.e. police, fire service, ect helps to make scheme more effective • However Manchester and Leeds are not renewing their licensing schemes – too expensive to run given (limited) benefits
Other options to consider • Increase the amount of PRS owned/ managed by social landlords through Build to Rent or a Council-owned private rented housing company • More effective oversight of lettings agents – form an umbrella partnership at a local level • Consider Council owned/ sponsored local lettings agency to shift market behaviour • Invest in enforcement as part of wider public engagement campaign
East of England Talent Bank • The East of England Talent Bank provides skilled resource and extra capacity in the public sector for the region • The areas we have specific expertise to deliver to are : - HR - Procurement - Asset Management - Housing - Environmental Services - Shared services/transformation • Knowledge and experience of local government/public sector in the region. • No procurement required – Teckal • Any surplus income is reinvested to support the region. • Flexibility. • Quality assurance.
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