Communities and Local Government CommitteeWritten evidence submitted by Stockton-on-Tees Borough Council

Executive Summary

1. This memorandum has been produced by Stockton-on-Tees Borough Council. A number of different teams within the Council have been involved in developing it including the Council’s Private Sector Housing team, the Housing Options team (responsible for homelessness prevention) and the Housing Regeneration and Strategy team.

2. Based on the points the Committee has suggested interested parties consider, Stockton Council has considered the following issues in its submission:

(i)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;

(ii)regulation of landlords, and steps that can be taken to deal with rogue landlords;

(iii)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;

(iv)tenancy agreements and length and security of tenure; and

(v)how local authorities are discharging their homelessness duty by being able to place homeless households in private sector housing.

3. In response to these the Council has set out its recommendations for actions. These include recommendations around:

(i)Housing Health and Safety Rating System (HHSRS) guidance

(ii)Supporting tenants to report issues

(iii)A National Register for landlords

(iv)Consistency in the regulation of HMOs

(v)Increasing tenancy security

Detailed Submission

Issue 1: 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

The current situation in Stockton-on-Tees

4. Within Stockton-on-Tees there are clear links between private rented housing, the oldest housing stock and the most vulnerable tenants. The Council’s Private Sector Stock Condition Survey highlights that 29% of properties in the private rented sector are of pre-1919 construction, compared to 9.3% overall for all tenures in the borough. The Council’s Strategic Housing Market Assessment 20121 identified that 62.4% of privately renting households in the Tees Valley receive less than £300 gross per week, when the average income in the borough is around £450 per week.

Our current approach

5. Through the private sector stock condition survey, the Council can identify areas where intervention and investment is required. For instance, it has enabled initiatives such as “facelift schemes” to be focussed on the areas that most require them, benefitting both homeowners and tenants.

6. In 2008 the Council introduced a “private rented sector toolkit” which contains a range of informal and formal actions that can be used when working with landlords. This includes such actions as a landlord accreditation scheme, tenancy support, implementing the Housing Health and Safety Rating System (HHSRS), mandatory HMO licensing, management orders and others. Other options such as selective and additional licensing are kept under review.

7. The toolkit has been successful in supporting, encouraging and training landlords to improve the conditions of their stock and enforce against those landlords who choose to neglect their duties.

8. In particular the Council’s landlord accreditation scheme provides support and advice to landlords to raise property and management standards in the private rented sector. This includes the provision of information, business benefits, one to one officer contact, newsletters and landlord forums.

9. Much work has been done to improve the energy efficiency of homes in the private rented sector. This includes the Go Warm scheme which will deliver energy efficiency measures to over 1,000 homes in the borough. The measures are free of charge to households in areas identified as priority areas (identified via the private sector stock condition survey). These areas are made up of pre-dominantly private homes (rather than social homes) with a high proportion of those in poor condition. The scheme has been made possible through the national Community Energy Savings Programme (CESP) and whilst most national CESP schemes have targeted social housing providers, in Stockton the scheme is aimed at supporting private owner-occupiers and the private rented sector. Tenants in the private rented sector have therefore benefitted from a full package of measures including external wall insulation, cavity wall insulation, new heating systems, boiler replacements, heating controls, energy efficiency & benefits advice.

Recommendations for action

10. Housing Health and Safety Rating System (HHSRS) guidance—the HHSRS works well however it might benefit from updated guidance and an update to the “averages” used within that guidance to reflect current stock more accurately. For example, many more properties have double glazing and more energy efficient boilers (compared to when the data was originally compiled) and back boilers are not as commonly seen now.

11. Supporting tenants to report issues—Retaliatory evictions (whether real or perceived) still affect the number of defects being reported by tenants and the conditions they are willing to put up with. The majority of repairs or defects identified are through tenants reporting them and their rights to requesting repairs could be more robustly defended to ensure they are not hindered from reporting repairs and conditions (either to their landlord or the local authority) because of fear of retaliatory action by their landlord.

Issue 2: Regulation of landlords, and steps that can be taken to deal with rogue landlords

The current situation in Stockton-on-Tees

12. Responsible tenants renting a property from private landlords deserve to be treated fairly and with respect and the vast majority of private landlords offer well managed, decent accommodation. The damage that rogue landlords cause to the lives of often vulnerable tenants is significant. Poor conditions and management can have an impact not only on the health and well being of tenants, but also on the wider community with rundown properties blighting communities.

13. In line with the trend nationally, there has also been a local increase in the number of “accidental” landlords in the borough as homeowners struggle to sell their properties. It is important that these landlords are fully aware of their responsibilities, particularly around Tenancy Deposit Protection and Gas Safety.

Our current approach

15. Where housing conditions are found to be unacceptable, officers will seek to resolve matters in an informal manner, in accordance with the Council’s Corporate Regulatory Services Enforcement Policy. In the majority of cases this results in works being carried out far more quickly by the landlord which is an obvious benefit to the tenant. If this informal approach fails the Council will take necessary enforcement action through the service of a statutory notice.

16. There are however circumstances where formal action may be taken straight away. This is likely when a landlord has a history of not complying with informal requests or non-compliance with previous statutory notices or when the Council considers that there is a high risk to the health and safety of the tenant or adjoining neighbours.

17. Landlords who do not comply with the statutory notices served have their details recorded in a non-compliance register for future reference.

18. From April 2007 to March 2012 the Council has improved conditions with 722 properties through working informally with landlords and improved conditions within a further 63 properties through the service of statutory notices and 12 through works in default.

19. Where a landlord fails to comply with a statutory notice and further action needs to be taken to remedy unsatisfactory conditions the Council will carry out the works in default of the landlord, unless the cost is so prohibitive it would put the Council in a financially unsound position. On every occasion the Council will recover the cost of the work, plus administrative costs by placing a local land charge against the property and pursuing the landlord for the full amount. Debt recovery will be pursued in the Courts.

20. Undertaking prosecution cases can be an expensive and time consuming process. To date the occurrences where the prospect of a successful prosecution could have been taken have been few and where they have occurred the benefit of taking action has been outweighed by the resources and costs involved.

Recommendations for action

21. A National Register of landlords—The legislation in place for dealing with rogue landlords may be able to be more effectively and efficiently utilised in conjunction with a self funded national register. This would assist in ensuring all “accidental” landlords are aware of and comply with requirements such as Tenancy Deposit Protection and Gas Safety. For example, gas safety certification is enforced by the Health and Safety Executive rather than the Local Authority. A register would bring together all information required to operate as a landlord and assist all agencies involved in the private rented sector. Accurate baseline information would help to make informed decisions on how to target limited resources and national guidance would help ensure consistency and minimising costs.

22. Ensuring that landlords register would mean that they would all be aware of their statutory obligations. Any breaches of these obligations could then be dealt with using enforcement action under current legislation.

Issue 3: 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

The current situation in Stockton-on-Tees

23. At April 2012 there was an estimated 362 HMOs within the borough.

Our current approach

24. Since 2006, the Council has been operating a mandatory Houses in Multiple Occupation (HMO) licensing scheme which has assisted in raising living and management standards for people living in this type of accommodation. 98 licenses have been issued, with 42 currently in operation. Both programmed and unannounced visits are made to check landlords are complying with the scheme.

25. The regulation of Houses in Multiple Occupation is resource intensive and is likely to be more so as shared houses and HMOs become more necessary as a result of welfare changes.

Recommendations for action

26. A National Register of landlords—It is interesting to note that some local authorities are utilising discretionary licensing as a means of obtaining a local register. More might look to this as a means of controlling and monitoring the private rented sector. However a piecemeal approach by local authorities would not be as effective or accurate as a national register could be.

27. Consistency in the regulation of HMOs—There are still issues around the regulation of HMOs regarding consistency as only certain conditions are mandatory and local authorities are left to devise acceptable standards (eg space standards). This inevitably leads to different space standards being used across the country with Local Authority standards requiring between 1 to 3sqm of lounge space per person. Housing officers are also left to interpret what is meant by “adequate” in the statutory instruments. Residential Property Tribunal decisions are not always helpful as they are non-binding and often contradictory.

Issue 4: Tenancy agreements and length and security of tenure

The current situation in Stockton-on-Tees

28. Private landlords within Stockton pre-dominantly provide tenants with an assured shorthold tenancy. One of the main reasons for homelessness in Stockton-on-Tees is due to an assured shorthold tenancy being ended by a section 21 notice.

Our current approach

29. Where appropriate and when a private tenancy best meets the needs of the household, the Council will seek to secure longer tenancy agreements with private landlords. Unfortunately it is not very common that this is agreed to by the private landlord.

Recommendations for action

30. Increasing the minimum length for an assured shorthold tenancy—Increasing the minimum length of time for an assured shorthold tenancy to 12 months would provide more security to tenants.

Issue 5: How local authorities are discharging their homelessness duty by being able to place homeless households in private sector housing

The current situation in Stockton-on-Tees

31. Data from the 2001 and 2011 Census shows that both nationally and in the Stockton borough there has been an increase in the proportion of households privately renting. In the Stockton borough households renting in the private sector has increased from around 6% to almost 14%.

32. National research from Rightmove suggests that on average private tenants now spend 39% of their income on rent.2 The rate of growth in private renting means that even the living wage is insufficient to pull low income renting families out of poverty.

Our current approach

33. The Council does not currently discharge its homelessness duty by placing homeless households in private sector housing. This is likely to remain the position unless the cost of renting in the private sector reduces. The Council will seek to secure privately rented accommodation that is linked to the amount of rent payable through Local Housing Allowance when working with families at risk of homelessness and who will consider living in privately rented accommodation.

Recommendations for action

34. Increasing tenancy security—With an increase in the proportion of private renters, interventions to address some of the issues that this group face and that would improve their lives would be welcomed. For example short term, less secure tenancies offered in the private rented sector can work well for young professionals who might want to move more regularly, however they do not suit many of the new privately-renting families that are entering the market.

January 2013

1 www.stockton.gov.uk/shma

2 http://www.rightmove.co.uk/news/files/2012/11/Rightmove-Rental-Market-Forecast-December-2012-Q4-CCS.pdf

Prepared 16th July 2013