Communities and Local Government CommitteeWritten evidence submitted by the National HMO Lobby
Executive Summary
1. The Memorandum is submitted by the National HMO Lobby and concerns the houses in multiple occupation (HMOs) segment of the Private Rented Sector (PRS). It identifies the distinctive characteristics of HMOs, their incoherent composition and their main markets, and the detrimental impact they have on the society, environment and economy, and hence cohesion, of local communities. It surveys campaigns, legislation and literatures on HMOs, and attends to the Committee’s enquiries about quality, rents, regulation and homelessness. The Memorandum concludes with seven Recommendations to control the development, to discourage the abuse and to encourage alternative forms of accommodation to HMOs. The Memorandum is supplemented by References and by a Review of recent PRS literature.
Introduction
2. The Memorandum is submitted by the National HMO Lobby, founded in 2000, a voluntary association of local community associations concerned about the impacts of HMOs on their communities. It comprises some fifty members in 35 towns throughout the UK, whose campaign was instrumental in amending planning legislation on HMOs. Its website is at http://hmolobby.org.uk/index.htm.
Information
3. The Memorandum is concerned solely with one segment of the Private Rented Sector, namely HMOs. The reason is the distinctive nature of HMOs, which is indeed recognised as an issue by the Committee in its briefing: “Those making submissions may wish to consider … the regulation of houses in multiple occupation (HMOs) …” The Memorandum refers to England especially (the problems are general, but legislation on HMOs differs elsewhere in the UK).
4. What are now recognised as HMOs have always existed, although not distinguished as a housing type until the Housing Act 1985. They were formally defined in the Housing Act 2004, when the concept of “household” was clarified (as essentially a family), and a HMO was identified as a dwelling shared by three or more households. Defined as such, a HMO exhibits a number of distinctive characteristics.
4.1
4.2
4.3
4.4
5. There are a number of distinct markets for HMOs.
5.1
5.2
5.3
5.4
6. Given the distinctive characteristics noted in 4 above, many HMOs (not all) have a tendency towards a range of internal and external problems. All are endemic, arising from the fact of multiple households, and hence a lack of cohesion, internal and external Internally, the absence of anyone willing and able to exercise any co-ordination, can readily give rise to health and safety problems, with the result that HMOs can become dangerous to their occupants. These are especially the concern of the National HMO Network.
7. Externally, the lack of cohesion endemic to HMOs extends to the neighbourhood, and this is the particular concern of the National HMO Lobby. Even individually, HMOs can impact detrimentally on the neighbourhood. This fact contributes to the tendency for high concentrations of HMOs to develop. Even a single HMO can frighten neighbours into moving away. At the same time, given the distinctive markets for HMOs, these markets prefer to congregate together, especially in the case of student second homes. It is not uncommon, not only for whole streets, but also for whole areas, to become dominated by student HMOs: in Headingley in Leeds, for instance, there are a hundred streets where the student population outnumbers residents. This process has become known as “studentification” (Smith 2002).
8. When high concentrations of HMOs develop, the impacts are compounded.
8.1
8.2
8.3
8.4
8.5
9. As a result of the problems they generate, HMOs have been the subject of considerable attention in the last decade or so, in campaigns, in legislation and in different literatures. Two national organisations have been established. The National HMO Network comprises professionals (particularly environmental health officers) and others concerned with the welfare of HMO occupants. On the other hand, the National HMO Lobby, comprises local community associations, and is concerned with the impact of concentrations of HMOs on the wellbeing of local communities.
10. HMOs have been subject to legislation. First identified in the Housing Act 1985, the term “household” was not defined (which left the meaning of “multiple households” ambiguous). The Housing Act 1996 provided for discretionary licensing of HMOs (“household” still remained undefined). But the Housing Act 2004 finally provided a definition of “household” (effectively a “family” or equivalent), and hence of multiple occupancy, and it provided for the licensing of HMOs, both mandatory and discretionary. (The scope of mandatory licensing was defined in Statutory Instrument (SI) 2006 371, restricted to HMOs with five or more occupants and three or more storeys.)
11. In planning terms, HMOs were recognised in the Use Classes Order of 1987 (SI 1987 764), but again “household” was not defined, and planning appeals and court cases (especially Barnes v Sheffield 1995) established the precedent that (incongruously) HMOs could be considered to be “single households”. However, lobbying by residents, councillors and MPs succeeded in persuading the government to consider the issue in 2008 (CLG 2008), to consult on legislation in 2009, and to amend the Use Classes Order in 2010 (SI 2010 653). The amendment adopted the definition of HMO from the Housing Act 2004, and established a new Class C4 for smaller HMOs (larger HMOs were already classed sui generis). This meant that the conversion of a family home from Class C3 to Class C4 became a change of use, and hence required planning permission. The new Coalition Government of 2010 in fact made such change of use “permitted development”, removing the need for planning permission (SI 2010 2134). But many LPAs have introduced Article 4 Directions, which remove the permitted development right, and restore the need for planning permission (for details, see the “Local HMO Plans” page on the Lobby’s website).
12. There is a growing literature on HMO concerns, in the media, in commissioned reports and in academia.
12.1
12.2
12.3
13. PRS quality: The quality of HMOs is very varied. Those marketed to benefit claimants or seasonal workers can be very poor indeed, and it was these which prompted HMO licensing. This was also often the case with student second homes. But many in this market are now of very good quality, for a number of reasons. On the supply side, in many university towns, the student market is very competitive. Student HMOs are a lucrative investment, and many investors seek to take advantage—which raises the standard of the HMOs on offer. On the demand side, students are often supported by their unions and their parents, in their search for quality accommodation. In response, therefore, many landlords subscribe to accreditation schemes, like those run by Unipol Student Homes in Leeds, Bradford and Nottingham.
14. PRS rents: Again, rents can be very varied among HMOs. But a defining feature of HMOs is that most rooms in the house are let singly, rather than renting out the house as a whole, and this of course increases the landlord’s return on the investment. In particular, student second homes are widely seen as cash cows. According to Accommodation for Students website, rents nationally have gone up from £67.11 to £68.70 per person per week in the last year.
15. PRS regulation: The National HMO Lobby supports the Rugg & Rhodes recommendation that “it should not be possible for landlords to let without a licence” (p113) (hence, Recommendation 4).
16. HMO regulation: In the interests directly of HMO occupants , and indirectly of HMO neighbours, the Lobby supports HMO licensing schemes. The Lobby welcomed the introduction of mandatory HMO licensing in 2006, though it considered that the licensing net should be cast wider (hence, Recommendation 1 below). The Lobby also welcomed the introduction of discretionary additional HMO licensing at the same time, and in particular, the decision in 2010 to delegate that discretion to local housing authorities (LHAs). The Lobby also welcomed legislation on HMOs in planning law in 2010—and regretted the subsequent weakening of this legislation, noted in 11 above (hence, Recommendation 2).
17. PRS tenancies: There is probably a strong case for greater security of tenure in the PRS, as increasing numbers of individuals and families come to rely on renting, rather than home-ownership. However, given the inherently temporary nature of HMO occupancy (see 4.4 above), assured shorthold tenancies are probably adequate for this element of the PRS.
18. Homelessness: It is certainly the case that LHAs have become dependent on the PRS for accommodating homeless households. But this says more about the inadequacy of housing policy generally than it does about the value of the PRS in particular. Indeed, the PRS (especially the HMO segment) bears considerable responsibility for the shift from ownership to renting in general, and for the housing shortage in particular. It is clearly the case that PRS investment has contributed to the inflation of house prices, at a time of shortage of stock, to the disadvantage of aspiring home-owners—who are thereby obliged to rent instead (to the advantage of the PRS!). Investment in HMOs in particular, for the sake of their lucrative returns (as noted at 14 above), exacerbates housing problems. The majority of HMOs, as noted at 5.2 above, are in fact student second homes. This means that thousands of family homes are taken out of the general housing market, in order to feed a demand for second homes—first homes are lost in favour of second homes. “There is no greater inequality in this country than that some people should have two homes while others have none” (George Monbiot, quoted in NHPAU 2008, para 178). Student HMOs thus indirectly contribute to the problem of homelessness in the UK, hence Recommendations 5 and 6.
Recommendations
19. In the light of the problems posed by HMOs, the National HMO Lobby recommends to the Committee a number of courses of action, intended to impose controls on their development, to discourage their abuse and to encourage alternative forms of accommodation.
20. As noted at 10 above, licensing of HMOs was implemented in 2006. As noted at 13, it was done in response to the poor quality of many HMOs, and also to the often poor quality of their management (15 above). SI 2006 371 designated HMOs comprising both three or more storeys and five or more occupants as subject to mandatory licensing. At the time, many (including the National HMO Lobby) argued that this scope was too narrow. Therefore, following 16 above, the Lobby recommends (1) that HMOs comprising either three or more storeys or five or more occupants should be subject to mandatory licensing.
21. As noted at 11 above, smaller HMOs were made subject to development control in 2010. But this control was removed when change of use from Class C3 to Class C4 was made permitted development by SI 2010 2134. This has obliged many LPAs to introduce Article 4 Directions, to remove that permitted development right in designated areas. But most neighbourhoods are not covered by such Directions (often due to costs), and residents there are vulnerable to uncontrolled development of HMOs, individually or cumulatively. In view of the problems posed to neighbours, as described at 8 above, and following 16 above, the Lobby recommends (2) that the amendment to the General Permitted Development Order SI 2010 2134 be repealed, removing permitted development rights for change of use from Class C3 to Class C4. [Incidentally, the Lobby also recommends (2a) that the original GPDO (SI 1995 418) be amended to make clear that “dwellinghouses” in Part 1 of Schedule 2 refers only to properties in Class C3, as originally intended, and not to HMOs in Class C4.]
22. As noted at 7 above, the markets for HMOs tend to cultivate areas where the market has already made an inroad. The upshot is high concentrations of HMOs in very specific areas. Many LPAs have responded by introducing policies on HMO development intended to resist the emergence of such concentrations. Manchester and Portsmouth are among several examples, which have set thresholds, above which permission for HMOs will not normally be granted. These LPAs have set the threshold at 10% of residential properties within a defined area: given the above-average occupancy of HMOs (4.1 above), this equates to 20% of the local population—which can be accommodated by the local community. A higher proportion begins to undermine that community (as noted at 8.5 above). The Lobby therefore recommends (3) that local planning authorities be advised to adopt policies limiting HMO development to not more that 10% of a neighbourhood.
23. Even with controls on HMOs, as noted at 15 above, landlords may still avoid their responsibilities. At section 4.5 of their report, Rugg & Rhodes propose “light-touch licensing” of landlords, to address this issue: “it should not be possible for landlords to let without a licence” (p113). The National HMO Lobby endorses Rugg & Rhodes’ “policy direction of travel”, and recommends (4) that a simple national registration scheme for landlords be established.
24. As noted at 5.2 and 18 above, many HMOs, specifically those let to students, are de facto second homes. This country cannot afford to tolerate use of its limited housing stock for the benefit of the privileged few. The National HMO Lobby therefore recommends (5) that measures be explored for discouraging or preventing the use of any domestic property as a second home (for work or study or holiday), unless expressly built for that purpose.
25. In her study of The nature & impact of student demand on housing markets, Rugg (2000) recommended that “a housing strategy should be integral to the expansion plans of every HEI” (p34). Such impacts are noted in 8 above and also in 18. The continued expansion of higher education in the ensuing decade has seen the impacts Rugg studied increase. Given the scale of the on-going student demand for accommodation, the National HMO Lobby endorses Rugg’s proposal, and recommends (6) that every HEI should adopt a housing strategy designed to minimise its students’ impact on local housing supply.
26. ODPM 2004 asserts “HMOs ... provide affordable housing options for some of the most vulnerable and disadvantaged groups in society, including benefit claimants or those on low incomes …” (p18). However, it is debatable whether HMOs are the best response to these demands. Should vulnerable people, who would otherwise be homeless, be dependant on the private sector (rather than on social housing)? For this reason, the National HMO Lobby recommends (7) that public sector housing provision should be made available to young single people in receipt of housing benefit (as an alternative to HMOs).
January 2013
Supplement 1
References
Allen, Kate, “Excessive concentration” Inside Housing 7 July 2006
Buonadonna, Paola, “HMO Legislation” The Politics Show, BBC1, 25 October 2009
BURA Seaside Network Turning the tide of HMOs in coastal towns Reception, Westminster, 27 January 2009
Channel Four, “Student HMOs”, News at Noon, 10 August 2009
Chrisafis, Angelique, “Two square miles of housing hell” The Guardian, 24 October 2000
Clark, Laura, “The student ghettos” Daily Mail, 24 January 2006
CLG (Communities & Local Government) Housing Research Summary 228 Dealing with “Problem” Private Rented Housing 2006
CLG, Evidence Gathering—Housing in Multiple Occupation and possible planning responses 2008
CLG, Strategy for seaside success: Securing the future of seaside economies, 2010
CLG Committee Coastal Towns 2007
Dixon, Sara, “University ghost towns fear as tuition fees rise” Express, 18 April 2011
Doward, Jamie, “Student ghetto areas ‘blight lives of locals’” The Observer, 13 September 2009
Harris, Paul, & Tracy McVeigh “Student takeover alarms cities” The Observer 21 July 2002
Housing Act 1985
Housing Act 1996
Housing Act 2004
Hubbard, P, “Geographies of studentification and purpose-built student accommodation: leading separate lives?” Environment and Planning A 41 (8), 2009
National HMO Lobby Balanced Communities & Studentification 2008
NHPAU (National Housing & Planning Advice Unit), Rapid Evidence Assessment of the Research Literature on the Purchase and Use of Second Homes, 2008
NUS (National Union of Students), Students in the Community: Working together to achieve harmony, 2007
ODPM (Office of the Deputy Prime Minister) Licensing in the Private Rented Sector: Consultation on the Implementation of HMO Licensing 2004
ONS (Office of National Statistics) “Number of people with second addresses in England and Wales, March 2011”, Statistical Bulletin, 22 October 2012
Purves, Libby, “Student Lodgings” The Learning Curve BBC Radio 4, 15 March 2005
Rhodes, David, The Modern Private Rented Sector, Chartered Institute of Housing, October 2006
Robinson, Winifred, “Shared Houses” You and Yours, BBC Radio 4, 8 October 2009
Rugg, Julie, et al, The nature & impact of student demand on housing markets YPS, 2000
Rugg, Julie, & David Rhodes, The Private Rented Sector: its contribution and potential, University of York, 2008
Sage, Joanna, et al, “The rapidity of studentification and population change: there goes the (student)hood”, Population, Space and Place, 18(5) 2012
Sheffield University, Changing UK: the way we live now, 2008
Shelter, Private Renting: a new settlement 2002
SI (Statutory Instrument) 1987 764 Town & Country Planning (Use Classes) Order
SI 1995 418 Town & Country (General Permitted Development) Order
SI 2010 653 The Town and Country Planning (Use Classes) (Amendment) (England) Order
SI 2010 2134 The Town and Country Planning (General Permitted Development) (Amendment) (no 2) (England) Order
Simpson, Mark, “Student Housing” One O’Clock News BBC1, 8 August 2006
Smith, Darren, “Patterns and processes of ‘studentification’ in Leeds”, The Regional Review, 12 (1) 2002
Smith, Darren, “The politics of studentification and ‘(un)balanced’ urban populations: lessons for gentrification and sustainable communities?” Urban Studies, 45(12), 2008
Smith, Darren, “The real geographies of studentification”, RTPI workshop, 22 June 2009
Smith, Darren, Ed, “Student Geographies”, Environment & Planning A, 41 (8), August 2009
Smith, Darren, & Richard Tyler “Studentification: success & failure of the PRS” Northern Housing Consortium The future contribution & potential of Private Sector Housing conference, Harrogate, 2009
Smith, Darren, “The social and economic consequences of Housing in Multiple Occupation (HMO) in UK coastal towns: geographies of segregation”, Transactions of the Institute of British Geographers, 37(3), 461–476, 2012
Tysome, Tony, et al, “Town & Gown” [series] Times Higher Education Supplement August 2003
Universities UK, Studentification: a guide to opportunities, challenges and practice 2006
Vine, Jeremy, “Estate bans students”, Jeremy Vine, BBC Radio 2, 31 January 2006
Wintour, Patrick, “Minister to act against student enclaves” The Guardian, 12 September 2009
Supplement 2
Rugg Reviewed
In the last decade, three reports on the Private Rented Sector in general have appeared, including Shelter 2002, Rhodes 2006 and Rugg & Rhodes 2008. The last gave specific attention to HMOs. But the validity of its conclusions has been questioned, both by the National HMO Lobby, and by Professor Darren Smith of Loughborough University, who has studied HMOs for over a decade.
The Lobby (National HMO Lobby, “PRS Review 2008: Response” 2008, online at http://hmolobby.org.uk/prsreview08.htm#response) is concerned that Rugg & Rhodes fail to take an objective approach. They state, “At the heart of the Review is the general desire to see the PRS as a less marginal tenure” (p6); but they admit that this can be done only at the expense of owner-occupation or social renting (p47). Rugg & Rhodes also neglect HMOs other than student HMOs, and they underestimate their impacts on local communities. Most seriously, their quantification of the issue is highly suspect.
The following are extracts from Darren Smith, “The real geographies of studentification”, a paper presented to a RTPI workshop at Brighton on 22 June 2009, which challenges Rugg’s & Rhodes’ narrow representation of studentification.
1. Introduction
Despite the consensus of opinion, a recent government-commissioned report (Rugg and Rhodes, 2008) asserts: “the limited nature of the problem [studentification]” (p.100) has been exaggerated by well-organised lobbying groups. Contrary to the majority of current political (DCLG, 2008), policy (eg Durham City Council, 2007), academic (eg Hubbard, 2008) and media discourses (The Guardian, 2008a) on student housing, and town/gown relations (eg UniversitiesUK, 2005), Rugg and Rhodes analysis of studentification reveals a piecemeal process of change, arguing that “intensive student habitation is not common” (p. xxi). In this paper, I challenge this narrow representation of studentification, asserting that Rugg and Rhodes’ analysis of the scale of studentification (they use the term “intensive student habitation”) is methodologically flawed; based on out-dated data, and a limited methodology.
2. The Rugg and Rhodes Review of the Private Rented Sector
The geographies of private rented student housing affect the wider operation of the private rented sector. Indeed, as Rugg et al. (2002: 289) note in previous research: “student demand affects all aspects of the local housing market”.
This is particularly important given the deeper penetration of students into the private rented sector. King Sturge (2008) reveal that 730,000 students (51% of total student population) are accommodated within shared housing in the private rented housing sector in 2008 (Rugg and Rhodes (2008) show the total 2,611,000 private rented dwellings in 2006). Given the high proportion of students residing in the private rented sector, it is therefore imperative that any problematic issues of private rented student housing are fully acknowledged and addressed, and that the residential geographies of students are represented in accurate and meaningful ways; which the Rugg and Rhodes report unfortunately fails to deliver.
3. A Narrow Representation of Studentification?
First, by basing their analyses on the incidence of households with a student Household Reference Person (HRP), Rugg and Rhodes construct a partial representation of the scale of high-density, student populations in local neighbourhoods. This will mask the vast majority of students living in high concentrations, such as students co-residing with a student HRP, or students co-residing with a non-student HRP.
Second, the methodology employed by Rugg and Rhodes’ is further limited by the use of census wards as the geographical unit of analysis. This geographic resolution tends to “hide” localised concentrations of students; despite Rugg and Rhodes acknowledging that: “this kind of problem can evidently be felt very acutely at street by street or neighbourhood level, but is clearly not a widespread issue” (p.99).
With this in mind, a micro-geographic perspective of studentification is essential, and the use of census data at Lower Super Output Areas (LSOA) is imperative, since this provides information, on average, for spatial areas with 1,500 residents (Office for National Statistics, 2008a), compared to electoral wards which include 5,500 individuals on average, and range from 100 to 30,000 individuals (Office for National Statistics, 2008b).
4. The “Real” Geographies of Studentification in 2001
Table 1 shows that there are LSOAs from 15 university towns and cities within the top 20 highest concentrations of student populations in England and Wales at LSOA.
Further analyses of 2001 census data reveal 687 LSOAs with a student population of 20% or more in England and Wales. This cut-off point was the measure identified by Berube (2005:11), to define “student-heavy wards ... due to studentification”. It is also noteworthy that there were a further 1,287 LSOAs with a student population of between 10–19% in 2001. It is a plausible hypothesis that the concentration of students in many of these latter LSOAs will have increased since 2001, as student populations have expanded (see next section).
Further analyses show that there were a total of 47 towns and cities with one or more LSOAs with a student population of 50% or more.
To further demonstrate the wide-scale of studentification, Table 2 provides a breakdown of the total number of LSOAs in university towns and cities with a student population of between 25–49% and 50–100%. It can be seen that there are 28 English university towns and cities with four or more LSOAs with student populations of 25% or more.
5. Exploring the Post-2001 Geographies of Studentification
As Savills (2008) note, the total student population has expanded by 31% over the last decade, and currently totals 2.34 million. Crucially, Rugg and Rhodes (2008) interpretation of intensive student habitation does not take into account these changing factors, which will have transformed the residential geographies of students in profound ways.
Overall, the total student population in the core cities of England increased by 52,400 students (+17.3%) from 250,145 to 302,545 students between 2000–01 and 2006–07. Although increases are common across all eight core cities, there is some variance, with rises being most pronounced in Nottingham (+22.7%), Newcastle (+22.5%), Birmingham (+21.5%), Leeds (21.3%), and, to a lesser extent, in Liverpool (+14.9%), Manchester (+13.7%), Bristol (+12.8%), and Sheffield (+9.9%).
Student populations have increased in the most dramatic ways in many of the smaller English university towns and cities since 2001. Figure 2 demonstrates how the total full-time undergraduate student populations increased in between 2000–01 and 2006–07, in a number of case studies. … Strikingly, increases were most marked in Bournemouth (+47.1%), Norwich (+36.8%), Bath (+30.0%), Plymouth (+29.2%), Canterbury (+25.3%), York (+23.9%), Reading (+22.6%), Durham (+21.4%), Loughborough (+16.1%), Brighton and Hove (+12.7%) and Southampton (+8.2%).
Indeed, when couched within broader societal changes, the general shortcomings of using the 2001 census data are emphasised. For example, Dorling et al’s (2008) recent study of the changing geographies of the UK reveals that “demographic segregation” is unfolding in the UK, with “areas becoming more segregated, most quickly from 2001 to 2006” (p.2). Such analyses clearly emphasise the pitfalls of using 2001 GB census to understand the current scale of studentification in 2008, or similar processes of change which are giving rise to a more segregated society.
Arguably, pinning down the geographies of studentification in accurate ways is important for formulating effective public policies to mitigate detrimental societal conditions, such as the breakdown of community cohesion, the fragmentation and disintegration of local neighbourhoods, and social exclusion. As Dorling et al. note: “today communities tend to be more geographically polarised: we tend to now more live alongside people with similar age, economic and lifestyle status” (p. 16). Processes of studentification are inherently inter-woven here into these pressing, broader societal patterns of change. The dismissal of studentification as a widespread process of change may have serious consequences for the general future health and well-being of many local communities and neighbourhoods. It may also lead to the disempowerment of local residents from articulating their views on the locally important issues of studentification, which are clearly voiced to local and national political actors in many university towns and cities.
[from Darren Smith, “The real geographies of studentification”, RTPI workshop, Brighton, 22 June 2009]