Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence

Memorandum by the National Federation of Residential Landlords (NFRL) (DHB 07)

  The National Federation of Residential Landlords (NFRL) is a voluntary organisation representing landlords' associations throughout the United Kingdom. It has over 40 associations in membership, which between them have over 10,500 members, many with branch networks. NFRL is collating detailed views from members of affiliated associations and will respond further to ODPM prior to 9 June 2003.


  1.  Letting property is described in the paper as an activity, yet it is also stated that HMO landlords can be considered to be small businesses. The current tax treatment of landlords is as investors in receipt of unearned income. Landlords who manage their own properties should be treated as small businesses, with the major proportion of their income being assessed as "earned income".

  2.  There are many regulations yet to be produced with this bill, merely providing the Secretary of State with the power to do so in secondary legislation. The detail of the regulations will be critical to the viability of the private rented sector and should therefore be progressed by positive resolution, and not negative resolution as proposed.


  3.  Licensing must apply to all tenures, RSLs, Councils, etc. There must be a level playing field not only for landlords but in the common interests of tenants. There is evidence that some local authorities have brought in onerous HMO Registration Schemes, when their own HMOs don't even comply with basic fire safety standards. The basis of exemption being that Local Authorities are not allowed to inspect themselves is unsatisfactory. It is fundamental that a local authority must not be able to impose requirements on the private sector that they themselves can ignore for their own properties.

  4.  The requirement to be a fit and proper person—any restrictions should be limited only to proven and serious offences that affect property management. All "spent" convictions must be ignored.

  5.  Transition arrangements are not discussed in the paper. Registered properties under current schemes must be passported "free" to licensing for the remaining period of the registration.

  6.  Licenses in respect of a property must be transferable, otherwise how will a sale/purchase of an HMO be dealt with? An HMO has a value as a rental property with a possibly significantly different value with no licence. How are mortgage companies to deal with applications for lending on HMOs on the basis that a license may or may not be granted after completion? Pre-purchase inspections must be made available with the findings to be guaranteed for a period of time. Rent must be payable for the period it takes a Local Authority to issue a (new) licence if a property is purchased which is tenanted.

  7.  Where inspections reveal significant expenditure would be necessary in order that a licence can be obtained, landlords must retain their right to dispose of the property or put it to non-HMO use. Planning policies must not be allowed to prevent deconversion, and HMOs must be allowed to move from private residences to HMOs and back without the need for planning approval. In such circumstances landlords should not be required to pay a full licence fee.

  8.  Failure to obtain a licence—a penalty up to £20,000 is disproportionate. The sanction of no rent being payable by a tenant is an additional penalty. The area of penalties needs to be considered in line with other regulation applicable to small business and not be imposed twice for the same offence, nor be a criminal offence.

  9.  Landlords cannot be held responsible for the actions of their tenants. This is contrary to empowerment of individuals and personal responsibility, which Government is currently seeking to achieve, and is possibly against Human Rights legislation. Landlords should be responsible for the control of the tenancy. Tenants must be responsible for their own conduct, however, landlords should be responsible for the regulation of the tenancy.

  10.  Accommodation must be allowed in an HMO without individual cooking and washing facilities in each room. Currently, shared housing, which will fall under the new HMO regulations will not meet many local authority requirements for HMOs and could not reasonably be made to meet such requirements. Student accommodation in the private sector is vital and a significant number of student lets will be lost if no allowance is made in this respect.

  11.  The requirement of compulsory licensing of property with three storeys—Rooms in the roof and basements must not be included: rooms in the roof, provided that they comply with 1991 building regulations, and all basements should be excluded.

  12.  There must be a time limit on the time it takes a local authority to issue a license. Once the application is received, rent and compensation for occupation of the premises must be allowed.


  13.  If the main rationale of this proposed legislation is to combat anti-social behaviour and bad landlords, then it is totally illogical to exclude registered social landlords, who under the criteria for designating an area of low housing demand, satisfy all qualifications. It appears that the selection of one group of landlords as compared with another group of landlords is an infringement of Human Rights or Unlawful Discrimination and must not be allowed to happen.


  14.  It is difficult to comment in detail on the proposed system, as version Two is not yet available. However, the following observations are made:

  15.  Any risk assessment system needs to be easily completed to a uniform standard. It must not be allowed to develop into a complex academic solution to what is effectively a practical problem.

  16.  Environmental health officers (EHOs) must not be the only persons who are allowed to carry out assessments. Landlords, surveyors, professional witnesses, as well as consultants, have a legitimate need to be able to train/qualify and be regarded as experts on a level with EHOs. It is vital therefore that the Sector Skills Council set National Occupational Standards.

  17.  Whilst the proposal will mean the HHSRS will replace the fitness standard, it is unclear if other requirements set by Local Authorities will be retained. For example, if a house is found to be satisfactory under the proposed HHSRS, it is essential that minimum room sizes previously set by LAs become irrelevant, subject to the rooms meeting minimum sizes as prescribed by building regulations. Not to set aside local standards would be a clear indication that the HHSRS was not an adequate method of assessing the property.

Richard Price

Chief Executive—NFRL

13 May 2003

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