Memorandum by the National Housing Federation
(DHB 36)
KEY POINTS
— 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.
PART 1—HOUSING
CONDITIONS
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?
PART 2—LICENSING
OF HOUSES
IN MULTIPLE
OCCUPATION
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.
PART 3—SELECTIVE
LICENSING OF
OTHER RESIDENTIAL
ACCOMODATION
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.
PART 4—ADDITIONAL
CONTROL PROVISIONS
IN RELATION
TO RESIDENTIAL
ACCOMMODATION
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—HOME
INFORMATION PACKS
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—OTHER
PROVISIONS ABOUT
HOUSING
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.
PART 7—SUPPLEMENTARY
AND FINAL
PROVISIONS
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.
OTHER PROVISIONS
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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