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

Memorandum by the National Housing Federation (DHB 36)


    —  We agree that the existing fitness standard for housing should be replaced by a new standard based on health and safety assessment, but we think the proposals in the Bill are unclear and potentially ambiguous.

    —  The compliance and training costs involved in the new standard need to be acknowledged.

    —  We welcome the updating of the statutory definition of a house in multiple occupation (HMO) so as to exclude houses broken wholly into self-contained flats, although we have some detailed reservations. We believe that the proposed national licensing scheme should be based on an assessment of risk and agree that it should exclude smaller HMOs and those managed by housing associations.

    —  We agree with a selective licensing scheme for private landlords in areas of low demand. It is important that licensing retains its focus on lack of demand and that schemes are regularly reviewed. We support the exclusion of housing associations.

    —  We broadly support the introduction of so-called " seller's packs".

    —  We welcome the extension of qualifying periods and discount periods for the right to buy, but we argue that further changes are needed.

    —  Although further consultation is needed before any general review of tenancy law, we believe it is urgent to amend the law on succession to tenancies to remove the current discrimination against same-sex relationships.

  The National Housing Federation is grateful for the opportunity to submit evidence to the ODPM Select Committee' s pre-legislative scrutiny of the Housing Bill. The Federation is the trade body for independent social landlords (housing associations) in England. The Federation has some 1,400 members, which operate on a non-profit basis and provide between them some 1.8 million homes for people in housing need.

  The Bill is divided into seven Parts. We comment on each Part of the Bill, then discuss some omissions from it.


  The Federation accepts the need for the introduction of a new system that incorporates the health and safety issues ignored by the current housing fitness test. Our initial reactions, based on previous published guidance, are as follows:

    —  The proposed Housing Health and Safety Rating System (HHSRS) scoring system may be too complex involving over 20 possible hazards that have to be assessed in relation to their danger to different vulnerable groups that may occupy the dwelling. There will also be potential difficulties when a dwelling is occupied by a vulnerable person for whom it was not designed.

    —  The identification of hazards and the method of assessment of the possible likelihood of a hazard resulting in harm would be subjective in practice. This lack of consistency could lead to more legal uncertainty.

    —  Detailed clarification is required of the terminology included in the proposed HHSRS. An initial version of guidance has been published but a revised version is not due to be issued until the end of 2003. As the HHSRS is to replace one of the criteria in the Decent Homes Standard the lack of clarification could mean that housing associations have to revisit their stock to ensure compliance. Stock condition surveys being carried out now may not be sufficient even if based on the current version of the guidance. In addition, the estimate of the cost of compliance may change if further work is required to properties that meet the current Decent Homes Standard. These issues could have detrimental effects on the planning to achieve the Standard for all homes by 2010, and will have major cost implications.

    —  Training of staff to carry out the much more complex HHSRS could represent a major cost and resource implication for associations. This will be in addition to the estimated cost of implementing the Decent Homes Standard.

    —  We acknowledge that the HHSRS forms one of the criteria of the Decent Homes Standard against which all landlords, including local authorities are required to assess their housing stock. Local authorities will continue with the enforcement role—but how will the system be implemented for their housing, since an authority may not take enforcement action against itself?


  This Part of the Act implements the Government's long-standing commitment to a mandatory licensing scheme for houses in multiple occupation (HMOs). The scheme will be administered by local authorities; the Secretary of State has power to determine the precise scope of the scheme but it is understood it will apply to larger houses with three or more storeys or occupied by five or more people (not forming a single household). Houses owned or managed by local authorities and registered social landlords will be outside the scheme. The licence will specify the maximum number of occupants for the house, and it may impose additional requirements about its physical condition or how it is managed. Local authorities will also have power to apply to court for a twelve-month " interim management order" (IMO) allowing them to take over the management of any HMO (whether or not subject to registration) that is causing particular problems. After the twelve months the IMO will lapse unless the authority obtains a "final management order" (FMO). The definition of " HMO" in the Housing Act 1985 is completely revised and updated (actually in Part 7 but mentioned here for clarity).

  The Federation welcomes the exemption of RSLs (who are already regulated by the Housing Corporation) but is studying the impact of the scheme on unregistered associations.

  It is important to strike the right balance. If the registration scheme is too widely drawn, resources will be wasted in pursuing HMOs that present no particular risk and attention will be distracted from the HMOs that present more serious problems. If, on the other hand, the scheme is too narrowly drawn it will not achieve its aims of improving the standard of HMOs. We suggest, therefore, that test for whether any particular category of HMO should be covered is whether it presents a significantly greater risk than a house of similar size and type that is occupied by a single household.

  Applying this principle, we agree that smaller HMOs should generally be excluded from licensing and we are looking whether the proposed scope of the scheme has properly achieved this. We acknowledge that concerns have been raised about the exclusion of certain categories of HMO, but it is not always clear whether these objections are based on an assessment of the risk presented by a particular type of HMO or on a view that all HMOs ought to be registered on principle, irrespective of the degree of risk. We do not favour the latter approach.

  We are pleased that the Government has taken the opportunity to update the definition of "HMO", in particular to exclude houses wholly broken into self-contained flats, for which the Federation has been pressing for many years. However, we do not agree that the definition should depend on the tenure of the occupants. This is wrong in principle and inoperable in practice. It is wrong in principle because a house does not become more dangerous merely because the tenure of the occupants changes, for instance if a resident long leaseholder decides to move out and sublet. It is inoperable in practice because the freeholder, who would be responsible for registering the house, would not necessarily know about the change in tenure because modern leases do not normally restrict subletting and even if such a restriction existed it would be virtually impossible to enforce. We therefore propose that buildings erected as single homes and later converted wholly into self-contained flats should be excluded from the definition of HMO and that this should be done in a way that refers exclusively to the physical features of the house, not on tenure. Such an exclusion could well require compliance with relevant building regulations at the time of the conversion, and we agree that exceptionally large converted houses should be included as HMOs because, unlike small and medium conversions, they pose a significantly greater risk.


  Local authorities will have power to licence private landlords (but not RSLs) in designated areas of low demand. Licences may impose requirements about the management of the property or its physical condition.

  We believe the Government is right to be cautious about a licensing scheme applying to all private landlords. Such a scheme would waste resources and effort, would distract local authorities from addressing the areas with the most serious problems, and would send the wrong signals to private individuals or institutions investing, or considering investing, in the provision of private rented housing.

  The danger with using landlord licensing to pursue a wider agenda of social concerns is that it may have unpredicted and unintended effects, particularly since it will operate in areas where the property market is in a very fragile state. Given that the sanctions in the regime are essentially punitive, the danger is that landlords will abandon properties altogether and make the problems of the area still worse.

  Multi-agency partnership approaches will be needed to turn areas round, but licensing can help ensure that private landlords play their part. However, anti-social and criminal behaviour is not the preserve of tenants; other categories such as homeowners and illegal occupiers can be equally guilty of it.

  Licensing schemes are likely to be effective only as part of a wider strategy of market renewal or neighbourhood regeneration. We do not think that a licensing scheme should be open-ended. A time limit is necessary to avoid the danger that a scheme continues to operate, through inertia, even though the character of the area may have changed since it was introduced. A possible limit is five years, the same as the term suggested in paragraph 62 for individual licences.

  Such a limit will maintain the focus on low demand. Once a scheme has been running for a reasonable time, it should have generated noticeable benefits, so that it is appropriate to review whether the criteria for licensing are still met. But if, on the other hand, there is no significant improvement, the evidence is that the scheme has not worked. We are not suggesting that every scheme should automatically end after five years (or whatever limit is laid down), but we do suggest that the local authority should have to make a positive case for its continuation by showing, first, that the scheme has produced clear benefits, and second, that despite these benefits the area still meets the criteria.


  This Part contains detailed and procedural provisions about new local authority powers, such as Interim and Final Management Orders (IMOs & FMOs), and other control arrangements. While we agree that mechanisms of this kind are needed to back up licensing schemes, the Bill is not clear about how the management orders interact with enforcement powers in other legislation, for instance control orders.


  Part 5 requires anyone marketing a house to provide a "home information pack", also known as a "seller's pack". This is the subject of a further ODPM consultation, separately from the rest of the consultation about the draft Bill. We shall be responding to this before the deadline of 30 June 2003.

  We support the principles underlying the Home Information Pack. We note that it will not formally apply to sales under the right to buy (or to acquire) because the property is not "marketed", but in practice landlord will have to supply much of this information so that it will be possible to compile a HIP on resale.

  Most of the particulars required in the HIP seem reasonable, but we welcome the proposal that marketing can still proceed if for any reason a component of the Pack is not readily available.

  The practical operation of the scheme should be kept under review. The danger is that the obligation to supply a HIP may deter property owners from selling and encourage them to consider other options such as renting, but this is likely to be a factor only in areas of low demand where the cost of assembling the HIP is a significant proportion of the value of the property.


  Part 6 makes important changes to the right to buy, extending the qualifying period from two years to five and the discount repayment period from three years to five; discount repayment will be based on the resale value rather than the actual discount.

  We are pleased the Government has decided to amend the legislation governing the right to buy, but the proposed changes, although welcome, do not go far enough.

  The Federation proposes that there should be further changes.

    —  There should be restrictions on the right to let properties during the discount repayment period. We do not support an outright ban, because this would operate unfairly in cases where the purchaser has a legitimate need to move during the discount period, for instance for employment, health, or family reasons. We suggest that the consent of the former landlord should be necessary for a letting, but that local authorities and housing associations should be given official guidance about when this permission should be granted.

    —  There should be a pre-emption period (perhaps ten years) during which the former landlord has first refusal in the event of sale.

    —  The right to buy should not apply when redevelopment is pending and in areas of exceptionally high demand.


  This Part makes some more detailed and technical provisions. The revised definition of the term "house in multiple occupation", which appears in this Part, is treated above under Part 2.


  The Select Committee asked whether there are any other proposals that could usefully have been incorporated in the Bill.

Consultation on Regulation of Housing Associations

  The Office of the Deputy Prime Minister is consulting on new regulatory powers for the Housing Corporation. It is envisaged that these will be incorporated in the proposed Housing Bill. The closing date for the consultation is 23 June.

  We shall, of course, be responding in detail; our initial reaction is that most of the proposals are fairly technical and some are welcome, but that one proposal in particular, namely that social housing grant should be available to private developers and other unregistered bodies, is extremely ill-advised. In addition, we are concerned that some of the other proposals do not protect the independence of associations or needlessly disturb the regulatory balance between the Corporation and the Charity Commission.

Tenure Reform

  The Law Commission is currently finalising a draft Housing Bill that will include a large number of important measures. Although we support many elements in the Commission's proposals, in particular the replacement of secure and assured tenancies by a unified regime, we feel that some of its other proposals will make it more difficult to meet housing need. In addition, the Commission's proposals do not deliver its stated objective of simplifying the law because they contain a number of complex measures that address problems that are in no way pressing. We are, therefore, pleased that the Government has committed itself to further consultation before proceeding with the Commission's proposals, and we do not think they should feature in the current Housing Bill.

  There is one exception, however. The current law of succession to regulated tenancies, secure tenancies, and assured tenancies, contained respectively in the Rent Act 1977 and the Housing Acts 1985 and 1988, contains provisions that discriminate against same-sex couples compared with heterosexual couples and, in the case of secure tenancies, further discriminate between married and unmarried couples. We do not believe these provisions have any place in modern housing law. The Court of Appeal has already acted against them in Ghaidan v Godin-Mendoza (2002), a Rent Act case. We have advised our members that they should assume the Ghaidan decision applies equally to secure and assured tenancies but it is far from certain that this is correct. We suggest that the Housing Bill should take the opportunity to put the matter beyond doubt.

John Bryant

National Housing Federation

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