Communities and Local Government CommitteeWritten evidence submitted by City of Bradford Metropolitan Borough Council

1. Executive Summary of Key Points

1.1 We have considerable concerns that despite a long history of working hard to raise quality standards in the private rented sector, much more needs to be done to make a significant difference to improve standards in this increasingly important sector.

1.2 We have had considerable success in recent years when undertaking proactive enforcement campaigns, targeting particular geographical “hotspots”. However, these campaigns are resource and labour-intensive.

1.3 Recent research suggested that areas like Bradford, where there is high housing benefit dependency and a concentration of poor stock conditions, should be considered a special case for policy intervention. A partnership between the HCA, local authorities, the private rented sector and the banking sector should develop policy to offer a financial package (a “decent deal”) to improve stock conditions in the private rented sector, which could be incorporated into a landlord accreditation scheme.

1.4 Improvements could be made to legislative and enforcement regimes that would assist local authorities in meeting their duties in relation to private rented housing. These include simplification, the removal of overlaps and the creation of consistency across different pieces of legislation and guidance.

1.5 The lack of long-term security of tenure for private rented tenants continues to be an issue of concern. The sector is never going to be attractive to families who wish to settle and lay down long-term roots in a local community, unless greater security of tenure can be provided.

2. Introduction

2.1 The Climate, Housing, Employment and Skills (CHES) Service of Bradford Council is responsible for the development of the Housing Strategy for the district, and for the delivery of key elements of that strategy. In particular, we are responsible for responding to complaints about the standard of housing in the private sector, and for licensing houses in multiple occupation (HMOs). We are also responsible for discharging the Council’s statutory responsibility for homelessness and for managing partnership arrangements with other housing providers, including private landlords, for housing vulnerable people and people in housing need. Our work involves close liaison with both landlords and tenants in the private sector on a day to day basis. We therefore have a very broad interest and stake in issues relating to the private rented housing sector.

2.2 Bradford’s housing landscape is a legacy of its industrial past. The district is highly polarised in terms of concentrations of high and low income households, and this has a direct impact on the way that the local housing market operates. A comprehensive background report, which focuses on the effects of changes in tenure patterns—including the growth of the private rented sector—is attached as an appendix to this submission or can be accessed at

3. Comments on Specific Issues

3.1 Quality of private rented housing

3.1.1 Bradford has a high concentration of poor quality private rented stock—the 2008 Stock Condition Survey showed that 58.8% of privately rented properties failed to meet the Decent Homes Standard—far higher than the national figure of 40.6%. This is due in part to our legacy of older terraced housing. There has been considerable growth in the size of the private rented sector in Bradford—from 12% to 18% of households over the 10 years 2001–11. Many new landlords to the sector are “reluctant landlords” as a result of adverse economic conditions. These factors give rise to our considerable concerns that despite a long history of working hard to improve standards in the private sector, a more proactive approach to attract investment into the sector to achieve quality standards is needed.

3.1.2 We have had most success in recent years when undertaking proactive enforcement campaigns, targeting particular geographical “hotspots” where we know there have been high concentrations of poor quality private rented housing. To date we have completed 3 proactive projects where we have worked with local regeneration partners including social enterprises to promote a proactive enforcement/accreditation approach to all privately rented accommodation. This has resulted in over 1,000 privately rented properties being brought to standard through both cooperation and enforcement. In this approach we have found that landlords and tenants are generally supportive as it removes any adversarial relationship between the two parties, places the enforcement officers in a more advisory role and does not financially penalise the better landlords. However, these campaigns are very resource and labour-intensive, and local authorities will not always be able to find sufficient funding to implement them.

3.1.3 We would argue strongly that areas such as Bradford, where there is high housing benefit dependency and a concentration of poor stock conditions, should be considered a special case for policy intervention. A partnership between the HCA, local authorities, the private rented sector and the banking sector should develop policy to offer a financial package (a “decent deal”) to improve stock condition in the private rented sector, access to which could be incorporated into a landlord accreditation scheme.

3.1.4 We have had considerable successes in offering loan finance to owner-occupiers for home improvements, and this approach could be extended to private landlords based on proof of inability to access conventional bank finance or other sources of funding if a government sponsored source of funding could be made available.

3.1.5 The role of local authorities in taking steps to ensure that private rented housing is of an acceptable standard continues to be of fundamental importance, notwithstanding the difficulties in resourcing such work against a backdrop of adverse economic conditions for some private landlords. There are improvements that could be made to the enforcement regime that would assist local authorities in meeting their duties. These centre around removal of overlaps and duplications which are currently built into related legislation.

3.1.6 The overlap and duplication of powers created by the Regulatory Reform Order and the Housing Act 2004 relating to fire safety do cause some problems between enforcement authorities. This has led to local authorities and fire authorities having to meet and agree separate enforcement protocols in order to agree a way forward in terms of who enforces what and where. A review could be undertaken to eliminate this duplication in order to reduce bureaucracy. There is also a need to bring Planning and Building Regulations in line with the Housing Health and Safety Rating system (HHSRS). It is possible for a housing development to pass through the planning process and comply with Building Regulations and yet contain hazards relating to lighting, crowding and space, noise and falls on stairs. Examples include rooms without windows and the use of “pigeon” staircases in loft conversions.

3.1.7 The Decent Home Standard, which was initially related to social housing stock, has subsequently become applicable to the private rented sector. However, local authorities can only enforce the first part of the decency standard relating to Category 1 hazards, and yet we have to report on the number of houses that we have made decent. The Decent Home Standard may now have less importance within the private rented sector, but it has been confusing and unhelpful to have this standard run alongside the HHSRS.

3.1.8 In more general terms, the HHSRS is a proven and useful tool for measuring and enforcing quality standards in the private rented sector. However it is an evidence based tool developed using statistical evidence which has not been updated since its introduction in 2006... Local authority enforcement experts should be involved in feeding into such a review. We have identified anomolies with the HHSRS such as not being able to take more than one course of action for the same hazard for example.

3.1.9 The Select Committee may wish to consider the advantages and disadvantages of using legal means or the welfare system to supplement work to enforce better standards in the PRS. Specifically, we would be interested in exploring whether Housing Benefit could be legitimately with-held for substandard properties, or whether possession orders could be declined when tenants legitimately with-hold rent due to the poor quality of their accommodation.

3.2 Levels of rent within the private rented sector

3.2.1 It is important that the Select Committee fully understands that rent levels and trends in the private sector are not uniform across the whole of the country. In some parts of the country, particularly the north of England, private rents are close to or on a par with social rents. Controls on rents, particularly in areas like Bradford, might further inhibit landlords in investing in the private rented market or in their existing portfolios, given that many are already struggling to meet mortgage costs. We would therefore urge the Committee to take on board regional and local variations in the private rented market when considering issues relating to private sector rent levels. A broad brush national approach to reducing LHA expenditure is also putting further pressure on landlords ability to invest in their portfolios, especially at the lower quality bottom end of the market. Setting LHA at 30% of the broad local market rate is restricting the availability of affordable housing for those reliant on Housing Benefit in an area where 54% of households in the private rented sector receive Housing Benefit.

3.3 Regulation of landlords, and steps that can be taken to deal with rogue landlords

3.3.1 Accreditation for private landlords needs to be carefully considered by the Select Committee, as there are advantages and disadvantages to implementing such a system. Most landlords are good, and do not need the burden of accreditation in order to continue maintaining acceptable standards in their properties. Accreditation is therefore a tool primarily for poorer quality housing and to secure better conditions for the most vulnerable tenants.

3.3.2 There are limitations to accreditation, particularly where it is adopted without considerable resources or incentives—our experience is that landlords need to see an incentive in order to get on board with accreditation schemes. One incentive could be the power to pay Housing Benefit direct to the landlord if the tenant agrees, which is not currently possible. The adoption of a mandatory accreditation or licensing system would be extremely resource-intensive, and if it was not adopted on a widespread basis, it could cause loss of investment in the PRS in areas where mandatory accreditation operated (as investors choose to focus on areas where accreditation doesn’t apply). One way to maintain a “level playing-field” across different local authority areas would be to develop a sub-regional landlord accreditation scheme to increase visibility and transparency in the sector, however the appetite and funding for this is currently uncertain within the West Yorkshire sub-region and previous models developed in this way have not proven successful or sustainable beyond a pilot period.

3.4 Regulation of letting agents, including agents’ fees and charges

3.4.1 We are aware that some tenants in Bradford have had issues with letting/management agents, and we would therefore support further work into the feasibility of greater regulation of this sector, given the growth and proliferation of businesses operating as agents.

3.5 Regulation of houses in multiple occupation

3.5.1 We would be in favour of simplifying the HMO definition and the removal of the specific requirement for five or more occupiers in the licensing requirement. We feel that it is the number of storeys that poses the greater risk than the number of occupiers, so would support a definition along the lines of three or more storeys and two more families to constitute a HMO requiring a licence.

3.5.2 The HMO licencing procedure should be simplified by removing the requirement to issue a proposal, prior to the actual licence. The proposal stage can be confusing for owners and is arguably unnecessary, and its removal would reduce bureaucracy and ultimately the fee.

3.5.3 The legislation around Management Orders (MOs) for HMOs requires review and simplification. The relevant part of the legislation seems to make an assumption that local authorities have their own social housing stock and property management functions readily available. However, in places like Bradford where council housing has been subject to stock transfer, putting in place an MO has been an extremely difficult and time-consuming process, and therefore very costly and resource-intensive. Key constraints have been the difficulties in attracting a partner to manage the HMO and the timing in complying with procurement rules.

3.5.4 The inclusion of the Residential Property Tribunal in the appeal process for enforcement notices also adds another level of bureaucracy to enforcement in the private rented sector. One example relates to the service of S239 “notices of intended entry”. An enforcement officer visited a HMO in relation to suspect wiring. Once in the property, other defects were noted and the officer carried out an inspection of all the lets. The subsequent notice was appealed and the appeal upheld, as it was determined that the officer should have left the premises once the wiring had been checked, then served S239 notices, and then returned to carry out further inspection on other defects. We would argue that there should be scope to operate more efficiently, using common sense, in relation to identifying hazards in HMOs.

3.5.5 In Bradford we have not pursued the option to operate discretionary licensing schemes for HMOs due to the difficulties in defining a specific area to focus on. Whilst this is an option which hasn’t been ruled out for the future, we are conscious that we would not wish to penalise good landlords, and our experience in proactive enforcement campaigns has shown that a lot can be achieved on a proactive basis.

3.6 Tenancy agreements and length/security of tenure

3.6.1 The lack of long-term security of tenure for private rented tenants continues to be an issue of concern. The sector is never going to be attractive to families who wish to settle and lay down long-term roots in a local community. There is an argument therefore to develop a tenure option which affords greater security of tenure for private tenants, but which doesn’t lock landlords and tenants in indefinitely.

3.6.2 One of the consequences of the relative lack of security of tenure in the PRS, is the incidence of retaliatory evictions. We have concerns that when some landlords become aware that their tenants have contacted the local authority for assistance with the poor standard of their accommodation, that they then serve notice on their tenants, who are then required to move out. This can occur either due to malice on the part of the landlord, or simply because the landlord lacks the funds to address the disrepair or hazards which the tenant has complained about. The Select Committee could meaningfully look into whether legislative changes to tenure security could help to resolve this problem.

3.7 Discharging homelessness duty into private sector housing

3.7.1 We will be considering this issue during the course of reviewing Bradford’s Allocations Policy over the next few months, and a decision will be taken on the extent to which (if at all) the local authority discharges its homelessness duty by placing homeless families in the private rented sector. The recent guidance which has been issued in relation to the standards expected, should local authorities discharge their duty in this way, has caused considerable concern for us, as it does not appear to be fully streamlined with the HHSRS. Given that local authorities would be potentially liable for the safety of homeless households placed in the PRS, alongside fulfilling their role as enforcing authority, it is of critical importance that standards expected should be entirely consistent with the HHSRS.

3.8 General points

3.8.1 Any new legislation or guidance developed by the Government in relation to PRS and regulation of landlords, letting agents or HMOs must be simple and streamlined, and must not serve to duplicate or conflict with other pre-existing legislation. Much of the legislation in this area is already complex and difficult to interpret and therefore implement, which restricts its potential to assist local authorities in achieving the best possible outcomes for tenants, landlords and local communities.

January 2013

Prepared 16th July 2013