Agenda item

RESOLVED: That:

a)    The proposals made in Section 2 of the officer report be noted.

b)    An update report to be presented in 2015-16.

c)    Generation Rent be asked for more information on their work with other local authorities in helping tenants claim rent back under RROs.

d)    d) The Committee welcomed the approach of the Council in respect of discretionary licensing on flats over shops. The Committee would support a trial of discretionary licensing on flats over shops and would like an update on this specific proposal in 2015-16.

3.1      Dayna Edwin, representing Generation Rent addressed the meeting. The key points to note were:

• She had worked with Generation Rent on a House of Commons Bill on Private Sector Regulations.
• Generation Rent would like to see borough-wide licensing of all landlords or at the very least blanket landlord licensing in every ward where there is a significant private rented sector.
• If the Council budgeted exactly the same sum for enforcement as it currently does, presuming the cost of licensing is covered by the licence fee, then there are still benefits to the Council, for example:
  • Off-setting some of the overhead costs of the housing enforcement team to the license fee account
  • Providing the enforcement team at its current scale with far better intelligence in terms of landlords of concern. When you prosecute a licensed landlord you will have a list of all their other properties in the borough which should be prioritised for proactive inspection
  • The licence fees and conditions can be scaled to impact harder on non-compliant landlords.
• There is more likely to be uplift in Council Tax receipts if there is licensing of all landlords.
• Generation Rent would like to be signposted to residents in the borough where landlords have failed to protect their deposits to help them recover money through Rent Repayment Orders (RROs).
• Generation Rent rejects the idea that landlords would put up rents. Rents are high because there is little supply and lots of demand and that is how the market price emerges. For example, if market rents were based on costs then you would see £400-a-month family homes available where landlords had no mortgage to pay.
• It should cost less than the £1m a year in set-up costs estimated in the agenda report, but even if that were the case; if it provides a measure of protection to one quarter of this borough’s population would be worth it.
• Generation Rent requests that the Select Committee calls for a business case to be prepared so that borough-wide licensing can remain an option for the Mayor and Cabinet.

3.2       In response to questions from the Committee, Generation Rent made the following further points:

• It was a disappointment that the Private Member’s Bill that would have outlawed revenge evictions was unable to make it through the Parliamentary legislative process, and therefore now unlikely to become law by the end of this Parliament.
• Having a borough-wide licensing scheme would deter rogue landlords by ensuring they have to be registered and monitored with an enhanced enforcement team.
• Licensing can be a tool to help protect vulnerable tenants, including people who have English as a second language, and who are often in the worst private sector rented accommodation.

3.3       Debi Waite, Environmental Health Team Manager, Residential Services, LB Greenwich, addressed the meeting. The key points to note were:

• She has worked in the area of housing for over 20 years, and has experience of successful selective licensing in Gresham, Middlesbrough. She has also worked with a number of local authorities, including her present role at LB Greenwich.
• LB Greenwich’s Public Sector Renting enforcement project cost an estimated £900,000.
• The project has been successful as it has been an intelligence-led approach and Enforcement Officers do not proceed until they have the complete intelligence package at their disposal.
• Many of the landlords, subject to enforcement, have been engaged in other criminal activity, and rarely comply with National Landlords Association regulations and similar conventions.
• Licensing should not be seen as a panacea for the problems of rogue landlords; when the Government proposed licensing in 2010, they did not anticipate local authorities to use it as a “borough-wide” measure.
• The use of licensing is a time-limited measure; it can only be issued for a period of up to five years.
• It is up to the individual local authorities to decide whether they proceed with a discretionary licensing scheme, and whether it should cover the whole borough. However, it must be noted that a borough-wide scheme would need a large enforcement team and a larger infrastructure due to the additional administration costs of registering all the landlords in the borough.
• When setting up a discretionary licensing scheme, it has to be shown that there is an element of anti-social behaviour (ASB) or poor health in play, and licensing would be effective in tackling this. This was an effective tool in tackling ASB in the course of her work in Gresham.

3.4       In response to questions from the Committee, the following was noted:

§  It is still going to be difficult to stop landlords using revenge evictions if a tenant complains, with a licensing system. The Private Member’s Bill on revenge evictions would have been helpful.

§  LB Greenwich has tried to concentrate specifically on rogue/bad landlords rather than a borough-wide licensing scheme.

§  To declare a landlord ‘not fit and proper’, a local authority must put in place Interim Management Order and take over the running over the property within 24 hours. To do so, they must have the resources and planning in place to be able to carry this out.

§  Local Authorities must monitor the possibility that rogue landlords may transfer the property to a friend/relative so they can manage the property on their behalf.

§  Licensing schemes are time-limited to five years, so local authorities must complete their objectives within that timeframe.

§  In terms of claiming back rents on a RRO, a tenant living in a property may make an application to claim back any rent they have paid during the unlicensed period, up to a maximum of 12 months, if the landlord has been convicted of operating a licensed property without a licence, or has been required by a rent repayment order to make a payment to the local authority in respect of housing benefit on the property.

§  LB Greenwich is working with their Public Health team on a project to use their expertise in collating statistics on health indicators to improve their information in this area.

3.5       Roz Spencer, Co-ordinator, Rogue Landlords Taskforce, gave a presentation to the Committee. The key points to note were:

• There are a number of London boroughs, as well as LB Newham, who are looking at introducing a discretionary licensing scheme of some description.
• The report to the Select Committee does not rule out any options to Mayor and Cabinet.
• The Housing Act 2004 Part 2 introduced a mandatory duty for local housing authorities to administer a licensing scheme for all large Houses in Multiple Occupation (HMO). It became a criminal offence for anybody to run an unlicensed HMO. It also introduced a power for local authorities to decide to extend the Mandatory licensing scheme to include additional types of HMO – i.e. smaller HMOs and illegally converted properties that do not meet planning requirements or the Building Regulations (illegal conversions - Section 257 HMOs) (additional licensing). Part 3 of the Housing Act introduced a power for local housing authorities to introduce schemes requiring any privately rented property excluding HMOs (of any type or size) to be licensed (selective licensing).
• The key issues affecting housing in the borough are as follows:
  • 74% rise in homelessness in three years to September 2014 – 50% of applicants come from the private rented sector
  • Rising private sector rents – 11% in the last year alone
  • Declining physical standards – a 33% rise in complaints to the Council’s Environmental Health in four years to March 2013, and a projected further step up of 26% annualised in the rate of complaints in the first half of this year
  • More families dependent on insecure private rented sector accommodation 
  • The impact of ‘welfare reform’ over the past few years.

• Even though private sector rented accommodation is less likely to have ‘category 1’ hazards than owner-occupied properties (36%-38%), and 80% of private rented sector tenants were ‘satisfied’ in a recent consultation, there is a small proportion of landlords exploiting the housing crisis for financial gain and causing a significant problem.
• The Council has been tackling rogue landlords using a tenant-led approach, and signposts tenants to opportunities where they can take up their legal rights. The Council would welcome working with other organisations to continue this work.
• There is an issue of significant sums of housing benefit going to rogue landlords. In 2013, £800,000 of housing benefit was paid to the top three rogue landlords being targeted in the borough.
• The use of the private sector for renting has doubled in the past 10 years, and with the trend set to continue, additional measures may be needed to tackle the issue of sub-standard accommodation and other activities in the private rental sector.
• Without licensing, there are still a number of measures that can be undertaken:
  • Require improvements to remove hazards
  • Prosecute for hazardous property conditions
  • Prohibit occupation of unsafe homes
  • Prosecute for overcrowding.
• Discretionary licensing would help provide the following:
  • Real time database of private rented sector landlords and properties (except those who hide)  
  • Raises awareness legal requirements across landlord community.
  • “Double jeopardy” extended to new scheme – double jeopardy in this instance is once a landlord declared ‘not fit and proper’ but who still operates as landlord, are liable to up to £20k per prosecution plus repayment of up to 1 year’s rent
  • Raise the bar in management standards.
• It must be remembered that a licensing scheme does not raise money for anything else, and it must not make a surplus. Also, the license fee cannot pay for enforcement activity and a licensing scheme cannot be used for rent control or improving security of tenure.
• To set up a borough-wide scheme, there would be a cost of approximately £100,000 to construct a business case; plus a further £100,000 to deliver a public consultation on the proposals. There would also be a significant cost in setting up the IT infrastructure for the scheme, as there is no ‘off-the-shelf’ product available at present. There is also an estimated £1m per year that will be needed to expand the enforcement team. There may also be recruitment issues as there is also a skills shortage in this area, plus there would be a lead-in time of 2-4 years, so it could not be implemented quickly.
• The proposal Lewisham is looking at right now, would consist of the following:
  • Continuing to focus on known priorities through the Rogue Landlord Taskforce
  • Build up the business case for whole borough discretionary licensing
  • Trial discretionary licensing on flats over shops
  • Strengthening the partnership with Lambeth and Greenwich towards a shared service

3.6       In response to questions from the Committee, the following was noted

• The Council is in discussions with Public Health about collating information on mental health, children’s health and other health indicators to improve the statistics at their disposal.
• The Head of Strategic Housing sits on the Adult Integrated Care Programme Delivery Group, so they are aware of the health and well-being issues that affect those that live in Lewisham.
• The Rogue Landlords Taskforce has been engaged in multi-agency work in particular ‘hot spots’ to tackle rogue landlords in the borough.
• The Greater London Authority has set up a London Rental Standard so landlords can become accredited so they applied with the law and offer a good service to their tenants. It has not been successful in reaching its estimated target of 100,000 accredited landlords, with only 300 additional landlords signing up.
• The Council would have to deliver a comprehensive public consultation if it was to consider a borough-wide licensing scheme. LB Enfield recently lost a judicial review on its public consultation, the reasons being that they did not consult the people who should have been consulted broadly enough and did not consult for the required length of time.

3.7      RESOLVED: That:

a)    The proposals made in Section 2 of the officer report be noted.

b)    An update report to be presented in 2015-16.

c)    Generation Rent be asked for more information on their work with other local authorities in helping tenants claim rent back under RROs.

d)    d) The Committee welcomed the approach of the Council in respect of discretionary licensing on flats over shops. The Committee would support a trial of discretionary licensing on flats over shops and would like an update on this specific proposal in 2015-16.