Communities and Local Government CommitteeWritten evidence submitted by the London Borough of Camden
We welcome the opportunity to submit evidence on the private rented sector. Camden is an inner London borough, where a third of households now live in the private rented sector and we have the third highest private rents in the country.
In Camden we are examining the role this sector plays in the make-up of our housing stock. It has become clear, as detailed below, that home ownership has decreased in the borough as the numbers of people living in the private rented sector has increased. This is a fast becoming a mature sector with residents seeing the private rented sector as a (sometimes only) long term solution.
What has also become clear is that many people are becoming landlords without the proper knowledge or ability to maintain the properties they rent out. Property conditions are also a concern in Camden, in 2004, a third of homes in Camden’s private rented sector did not meet the decent homes standard. Much of our stock is energy inefficient, and there are limited opportunities to build purpose built private rented housing with limited land for new building sites
Property prices and rents in Camden continue to rise, and there are limited opportunities for new social housing developments. High rents are impacting on Camden families and our mixed communities. There is a growing risk of child poverty.
Welfare reform will have a particular impact on inner London including our ability to find suitable homes for homeless families in the private rented sector. We would like to discuss the possibility of benefits that are paid to cover part or all of rent only being paid to Landlords whose properties meet the decent homes standard. Also, given the very high level of rents in Camden it would be helpful if the committee could do further exploration of the impacts of rent capping and whether this would make housing more affordable and accessible.
It is important for Camden as a council not to presume that the private rented sector in the borough is dominated by rogue landlords. We have led the way in delivering the UK Landlord Accreditation Scheme, incorporating the London Landlord Accreditation Scheme, where we train and accredit agents. In October 2012, 786 agents were registered as accredited through our scheme in London and it has become a useful tool in helping to deliver quality housing.
I trust that the Committee will find the evidence submitted from Camden’s example to be of interest in their consideration of improving the private rented sector.
We look forward to working with you and the Committee on this important issue.
Executive Summary
(i) Camden is an inner London borough, where, according to the 2011 census, a third of households now live in the private rented sector, which is a 10% increase in the last 10 years. The private rented sector is changing, it needs to be modernised to meet the needs of many households who live in the sector as their permanent home
(ii) Property prices and rents in Camden continue to rise, and there are limited opportunities for new social housing developments. High rents are impacting on Camden families and our mixed communities. There is a growing risk of child poverty. Welfare reform will have a particular impact on inner London including our ability to find suitable homes for homeless families in the private rented sector.
(iii) Security of tenure is a key concern and impacts on outcomes for children living in the sector. Families living in the private rented sector should have the same opportunities to a stable home, to raise complaints against their landlord and to be able to form tenant organisations and as social housing tenants do. There should be greater regulation of the buy-to-let mortgage market, and landlords should be enabled to offer longer tenancy lengths to good tenants where both parties wish to enter into a long term agreement.
(iv) While there are “rogue landlords” who must be tackled, there are many good landlords, and there are many small landlords who have little experience in managing rented accommodation and do not appreciate the standards that should apply to rented housing. Camden has developed and now hosts the UK Landlord Accreditation Scheme, incorporating the London Landlord Accreditation Scheme to offer landlords training and advice and set standards for membership to improve professional standards in the sector. There should be further legislation to regulate letting agents both on fees that they can charge, and to encourage longer tenancy terms.
(v) Property conditions are a concern in Camden. While we are aware that many homes contain poor property conditions, tenants who lack security of tenure are wary of reporting these problems. We also find we have difficulty contacting overseas landlords and making them accountable for management of their properties.
(vi) Licensing is one way to ensure property standards, however the current licensing regime is limited in the evidence required to implement a scheme. Sometimes landlords evict tenants when work is required and charge higher rents once the work is completed.
(vii) Our work indicates that more grants and financial incentives should be made available to help landlords improve their stock. This has proved to be an effective method of achieving property improvements without the loss of a home to the tenant.
1. Recommendations for Action
My recommendations are as follows:
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2. Factual information to be submitted
2.1 Thank you for this opportunity to present evidence to the Committee. I would like to share facts and information about the Camden private rented sector, as an example of an inner London borough, and how current housing conditions impact on our local residents. I have structured my evidence using the subheadings that the Committee have helpfully provided.
3. The quality of private rented housing, and steps that can be taken to ensure that all housing in the sector is of an acceptable standard
3.1 In 2004, a third of Camden homes did not meet the decent homes standard. Many homes in our stock were built pre 1945, and therefore have poor insulation. Fuel poverty is a concern for our residents, especially where other expenses continue to rise.
3.2 We have found grants and financial incentives are an effective mechanism to improve homes. Where there are no financial incentives, landlords sometimes evict the tenant while they carry out work on a property, or because they intend to charge a higher rent once the property condition has been improved. Tenants are therefore reluctant to inform environmental health officers of the problems they experience in their property as they risk losing their home.
3.3 Licensing is one way to ensure property standards, however the current licensing regime is limited in the burden of evidence required to implement a scheme. Selective licensing is not a possibility for Camden as it only applies to areas of low demand and high anti-social behaviour. Therefore we can only consider licensing HMO’s.
3.4 We would also like to raise our concerns about accountability of overseas landlords. We have found it difficult to enforce property standards, serve management orders, bring empty properties back into use, or to resolve antisocial behaviour from tenants in leasehold properties on our council estates where the landlord lives overseas. The Government should do more to make overseas landlords accountable to ensure that their properties are managed to a good standard.
4. Levels of rent within the private rented sector—including the possibility of rent control and the interaction between housing benefit and rents
4.1 Camden is an area of high demand, and housing benefit has no impact on market rents. Median private sector rents in the borough stood at an average of £445 a week for a two bedroom property during the twelve months up to and including March 2012.
4.2 In May 2012, there were just under 5,000 private renters in Camden claiming Housing Benefit. In November 2012, 1074 private renters will be affected by local housing allowance caps. 320 renters are expected to be above the total benefit cap.
4.3 Affordability of the private rented sector is a key concern in Camden, as costs of rent become prohibitive to those claiming benefits and to middle income families. Access to affordable housing is a critical element in reducing child poverty. The sector needs modernising to meet the needs of the many households who are living in this sector as their permanent home.
4.4 I welcome recommendations from the Committee that would enable more affordable long term private rented homes to maintain a mixed community in Camden.
5. Regulation of landlords, and steps that can be taken to deal with rogue landlords
5.1 While there are “rogue landlords” who must be tackled, there are many good landlords, and there are many small landlords who have little experience in managing rented accommodation and do not appreciate the standards that should apply to rented housing. The Council uses a range of interventions to improve standards, characterised as a “carrot and stick” approach. Assistance offered to landlords includes:
Camden has developed and hosts the UK Landlord Accreditation Scheme that provides training for landlords, encourages good practice, and avoids costly enforcement activity. The scheme is very successful and so far 11,129 London landlords have been accredited including 646 with properties in Camden.
We offer landlords grants to improve conditions and bring empty homes back onto the rental market.
We offer casework advice and support to owners of empty properties to carry out repairs, and let or sell the property.
We issue schedules of works required by landlords prior to taking enforcement action.
5.2 However we are not afraid to take decisive action. In the last year our Environmental Health Officers have:
issued 72 statutory notices requiring works on 48 dwellings;
issued 23 statutory notices related to 13 properties for public health type issues like Rodents, Power Cut Offs and Filthy Homes;
taken seven prosecutions to a hearing, through which the courts awarded £23,641 in fines and £25,255 costs. There were also a number of cases where the Council undertook works in default where the landlord or owner failed to do them, and claimed back costs and expenses as an alternative to prosecution; and
we were the first local authority to take direct control of three poorly managed rented houses since 2006 using strong new powers and are preparing for more action where “rogue landlords” fail.
5.3 We are preparing a new private rented strategy that is due to be launched in March that will introduce further initiatives to assist Landlords to improve the standards of accommodation in this critical sector of Camden’s housing Market.
6. Regulation of letting agents, including agents’ fees and charges
6.1 Lettings agents, like landlords can currently be established and run by individuals with little training or experience. We also train and accredit agents on our Landlord Accreditation Scheme. In October 2012, 786 agents were registered as accredited through our scheme in London.
6.2 The following conditions apply to agents seeking accreditation:
The Agency must show that two thirds of the directors and staff have attended training.
If the Agency has several offices, only the office attending the training will be accredited.
To become accredited the directors and staff must attend a one-day development course run by UKLAP, the staff within the agency must be “fit and proper” persons and comply with the UKLAP code of conduct.
For an agency to be accredited, the Agency must be a member of any of the following organizations: NALS (National Approved Letting Scheme), ARLA (Association of Residential Letting Agents), ARMA (Association of Residential Managing Agents), NAEA (National Association of Estate Agents), RICS (Royal Institution of Chartered Surveyors) or a professional body that is governed by a code of conduct, enforced by the professional body. Agents who are not a member of a recognized organization, can provide other evidence of competency.
The Agency must agree to recommend the UKLAP to all their landlords.
Agents would be subject to similar disciplinary action as landlords.
7. However, we remain unable to regulate the fees that agents charge. A high number of complaints received by UKLAP relate to agents fees and charges. Further regulation of agents would need to be legislated for.
8. The regulation of houses in multiple occupation (HMOs), including the operation of discretionary licensing schemes imposed by a local authority for a category of HMO in its area
8.1 Camden operates mandatory licensing of HMO’s, and will be considering an additional licencing scheme to incorporate additional types of HMO.
8.2 We think there is a need to have a borough wide licencing scheme to capture poor management in many HMOs, rather than a bias towards landlords owning bedsit type HMOs. It is unfair to focus on one type of HMO. However, the burden of proof required to operate additional or selective licencing is a limiting factor in our enforcement activity.
8.3 There have been some implications of adherence to a mandatory only scheme. Complaints about conditions in rented housing are now more likely to feature HMO’s that are not required to be licensed because of the scrutiny applied to licensed HMO’s. There is a pressure on landlords to avoid licensing; through legal and illegal conversion, the reduction of occupying tenants to four and therefore potential under occupation, and the creation of cramped and small studio type flats which are difficult to remedy.
9. Tenancy agreements and length and security of tenure
9.1 Security of tenure is a key concern. With a growing number of families living in the private rented sector as a permanent home, we know that outcomes for children are better where families can remain in one home without disrupting their schooling. We have not implemented flexible tenancies in our own Council stock as we recognise the benefit to families of long term stability.
9.2 Families living in the private rented sector should have the same opportunities to have greater certainty and a stable home, to raise complaints against their landlord and to form tenant organisations as social housing tenants do. The Assured Shorthold Tenancy regime makes it possible for Landlords to offer longer tenancy terms, but risk adverse banks and lettings agents may encourage landlords to offer shorter terms so that they can charge administration fees, or to raise the rent on a property.
9.3 We know from working closely with landlords for our homeless households that many landlords prefer long lets with a good tenant as this provides a secure rental income stream. We continue to provide tenancy training to all our homeless households so that landlords have greater assurances that the tenant will also meet their responsibilities.
10 How local authorities are discharging their homelessness duty by being able to place homeless households in private sector housing
10.1 For many years now, Camden has operated a very successful approach to homelessness prevention that has significantly reduced the number of households that have required Temporary Accommodation. In 2003
10.2 The popularity of Camden as a place to live means that private rented sector rents are high. Median private sector rents in the borough stood at an average of £445 a week for a two bedroom property during the twelve months up to and including March 2012. The LHA cap for a two bedroom property in Camden is £290 and some households needing a two bedroom home will be further disadvantaged by the total household benefit cap. The combination of high rents and less benefit available to households to cover housing costs will make temporary accommodation placements in Camden and in many other parts of London unaffordable and, therefore, unsuitable. The Secretary of State has strengthened provisions on suitability of accommodation in relation to location. Taken together, providing accommodation which is both affordable and in a suitable location will be challenging.
January 2013