Tower Hamlets Council is set to launch its consultation on introducing a landlord licensing scheme next week despite the government announcing it will restrict local authorities’ ability to implement them.
The three month programme will feature seven roadshows across the borough where residents can learn and ask about how licensing will work and benefit residents.
The scheme requires private landlords to license every rental property on condition of paying a small fee and meeting a series of criteria such as having energy performance certificates and electrical and gas safety certificates as well as passing a fit-and-proper-person test.
In Newham, where the scheme was introduced in January 2013, 20 landlords renting out 300 properties have been banned from operating in the borough while hundreds have been prosecuted – with some fined as much as £20,000 – for breaking housing regulations.
While the scheme is set up to improve the management of properties it is also expected to improve conditions as landlords up their game for fear of prosecution, but also become educated about their obligations.
An officer from Newham Council said many landlords don’t set out to break the law, but are simply unaware of it. The scheme has allowed the council to compile a list of properties for rent and contact details for their owners for the first time and enabled them to inform them of their legal duties under housing law.
However, landlords and sympathetic politicians have reacted angrily to the schemes saying they will force up rents and reduce the number of properties available for rent despite licenses costing around £50-a-year. It would appear a successful lobbying drive by landlord representatives has prompted the government to propose limiting licensing to 20% of a local authority’s jurisdictional area. The CEO of the National Landlord Association told the Independent he was ‘delighted’ the government had listened to landlords.
Whether appeasing landlords over tenants is a wise move before an election remains to be seen.
Critics say restricting the council’s powers to implement the scheme flies in the face of its much lauded Localism Bill which calls for more powers and a greater say to be given to residents and local authorities.
A TH Council source said it is now even more important that residents respond to the consultation to give it the mandate to implement the scheme given it now needs signing off from the secretary of state for Department for Communities and Local Government (DCLG) – currently Eric Pickles.
While the change is expected to come in to force shortly before the election, it could be rescinded months later following a change in government.
Should the responses from Tower Hamlets Council’s consultation on implementing the scheme give it the mandate to do so, it will pilot in: Blackwall and Cubitt Town, Weavers, Whitechapel, Millwall, Spitalfields and Banglatown, Bow East and Bow West. However, it will first require authorisation from the borough’s Mayor and the DCLG.
Enfield Council was recently blocked from implementing a scheme by a high court judge after landlords successfully argued the council should have consulted in neighbouring boroughs, so landlords there could challenge it.
A few responses to government claims over licensing
1. Housing minister Branden Lewis said he hoped limiting licensing schemes would mean more people would rent homes from landlords.
How does one follow the other? Ending licensing will not increase the supply. It will not bring empty homes back onto the market – unless they were taken off the market after a licensing scheme deemed them too unsafe to be habitable. If most landlords are good landlords as the government claims they will be only too happy to comply with licensing.
2. Lewis said the vast majority of landlords offer a decent service.
In which case they will be barely affected by licensing as all their paperwork will be in order. however, despite offering a good service they may still be breaking existing laws they are unaware of and could face prosecution should the worst happen. Surely these no-doubt good people would want to be informed (through the scheme) of their legal obligations and safeguard both themselves and their tenants.
3. Lewis described licensing as a tenant’s tax that would push up rents.
Council’s are charging around £50-a-year for a license per property. That’s less than £1/week increase on the rent per property. I think even the most hard up tenant could swallow that and willingly do so in exchange for stronger controls on how landlords manage their properties. As for additional costs to the landlord, these would only exist if the landlord was currently operating illegally, something most would be horrified to realise and grateful to the scheme for highlighting.
4. Lewis stated licensing schemes do nothing to tackle rogue landlords.
As stated above Newham has banned 20 landlords managing 300 properties over the last two years. It prosecuted 250 landlords in 2014 compared to 150 for the rest of London combined.
5. Lewis said he wants councils to target the few landlords that make their tenant’s lives a misery.
As landlord organisations say, many laws are already in place to prosecute their members; council’s just don’t use them. It’s true, but largely because council’s are too skint (and lethargic) to prosecute – particularly since Lewis’ government slashed their funding year in, year out since they came to power. Especially when costs awarded by judges do not cover actual costs in pursuing the case and fines going to the treasury. It is licensing that is giving councils the necessary funds for them to pursue and prosecute callous landlords.
6. Lewis then claims prosecuting dodgy landlords will help “create a bigger, better private rented sector”.
Earlier Lewis suggested licensing schemes, which simply require landlords to pay a small fee and adhere to the law, would damage the private sector. Now he’s saying prosecuting landlords, which licensing facilitates, will improve and increase the sector. A cynic might accuse him of making it up as he goes along.