Communities and Local Government CommitteeWritten evidence submitted by Nottingham City Council
1.0 Executive Summary
1.1 Nottingham City Council and its partners recognise the growing importance of the private rented sector (PRS) as a source of suitable and affordable housing which offers a viable alternative to home ownership. As such it is important that the PRS delivers accommodation to a standard which meets the needs and aspirations of customers.
1.2 Nottingham has an above average sized PRS (21.6% of households within the city, compared with 15.4% nationally—Census 2011), and although student accommodation makes up a significant proportion of the sector, it is by no means dominant.
1.3 As with all cities of its size, Nottingham displays varying quality within its PRS. There are many excellent professional landlords in the city who take pride in the standard of accommodation they offer. However, there are also some poor standards of both repair and management in the city.
1.4 The Council makes optimum use of the regulatory tools available to it. For example, the authority has implemented an Article 4 Direction in order to control the spread of houses in multiple occupation (HMOs) in key parts of the city, and is about to consult on a scheme for additional licensing. However, powers seem skewed towards the HMO sector and there are large sections of the PRS for which the regulatory tools do not exist.
1.5 Minimum national standards, plus a registration scheme would address many of the difficulties faced by local authorities, tenants and advice agencies in tackling poor conditions, poor management and illegal activity of landlords.
2.0 Submitter(s) Details
2.1 This evidence is submitted by Councillor Dave Liversidge—Portfolio Holder for Housing, Adults and Community Sector, Nottingham City Council. Support and statements have been provided by specialist officers within the authority and also by:
a Housing/Housing Debt Caseworker, Notts Housing Advice (NHA); and
the Specialist Services Manager, Citizens Advice Bureau (CAB), Nottingham.
Statements provided are by NCC officers unless otherwise stated. Statements from other agencies do not necessarily reflect the views of the City Council, but are provided to further evidence the submission.
3.0 Quality of private rented sector housing and steps that can be taken to ensure that all housing in the sector is of an acceptable standard
3.1 There should be a national minimum criteria and standards set prior to housing being let out. Landlords and managing agents would then understand their obligations when getting involved, rather than it just being by enforcement through eg the housing health and safety rating system (HHSRS). A landlord can let a property in a very poor state and it could stay like that unless there is enforcement action by the housing authority. Unless the local housing authority (LHA) receives a complaint it will not know about the property. Some minimum criteria could be: a written tenancy, minimum standards around fire detection, heating efficiency, safety etc. This would allow tenants to understand what is expected when they move in as well as landlords/managing agents knowing what is required of them nationally, rather than each local authority applying differing standards. A strict liability offence could be brought in that would make it illegal to let a property unless it met minimum criteria—this is currently very limited and the only requirement is around gas safety certificate and an energy performance certificate (EPC).
3.2 There should be greater national recognition of accredited landlords and their superior management and product.
3.3 HMO licensing has skewed the emphasis of improvement in the private rented sector (PRS) with an over-emphasis being put on these types of properties. This has left family housing potentially lagging behind in how owners and landlords manage these properties, particularly as these types of properties generally contain a higher number of vulnerable groups (as defined by the HHSRS).
3.4 Notts Housing Advice commented that: “Private rented accommodation available at cheap rents or for low income or benefit families is of a poor standard. Local environmental health officers (EHOs) can be overrun with the amount of disrepair and landlords often retaliate by giving notice rather than remedying the problems. Steps that could be taken to ensure all housing is of an acceptable standard could include random checks on certain properties in a landlord’s portfolio, and a checklist of minimum requirements regarding safety and security.”
4.0 Levels of rent within the private rented sector—including the possibility of rent control and the interaction between housing benefit and rents
4.1 Of the 11271 private rented sector cases administered by NCC, 9801 are paid under the Local Housing Allowance (LHA) scheme and the remaining 1,470 cases referred to the rent service.
4.2 The city does not have highly inflated rents, except for in areas of very high housing demand; therefore the need for rent control is not as evident as in higher pressure housing markets. NCC is conscious that rents are increasing as demand increases.
4.3 However, the Notts Housing Advice Bureau take an alternative view stating: “Lack of landlords agreeing rent control, previous abuse of housing benefit and landlords increasing rents to take advantage of levels. Housing benefit being restricted to pay direct to landlords unless certain circumstances apply, this does not help with liaison. Rents in certain areas for family accommodation well above the LHA rate, making private rented accommodation unaffordable to low income families. Lack of shared accommodation available for under 35s, this age restriction does not work well within this area of the country.”
4.4 The introduction of the Local Housing Allowance scheme has resulted in private landlords becoming much more “switched on” in terms of knowing the maximum eligible rent due based on the qualifying bedroom criteria for household members. NCC has seen an increase in the amount of landlords that now set the level of weekly rent at the same level as the LHA rate which in turns allows us under the HB regulations to pay HB direct to the landlord rather than the tenant.
4.5 In terms of ensuring fair rents, all non LHA cases are still referred to the rent service for an independent assessment, but as shown by the case numbers these are in the minority compared to the number of LHA cases now active. All new applications are now paid under LHA therefore the phasing out of rent officer cases will continue to happen. It will be down to central government to lead and legislate as to how to try to ensure fair rent levels are set within the PRS.
4.6 Welfare reform and the amendment of the moving of the under 25 single room rate to under 35 (years old) has seen more single claimants with a shortfall in their HB provision. This in turn has seen an increase in the number of Discretionary Housing Payment applications.
5.0 Regulation of landlords, and steps that can be taken to deal with rogue landlords
5.1 Notts Housing Advice stated “The proposed unified landlord accreditation mark by NCC should provide a welcome safeguard to tenants. Landlords should have to meet minimum requirements before they can be associated with the scheme.
5.2 Notts Housing Advice commented that “Rogue landlords—those who harass tenants, breach the covenant of quiet enjoyment, have properties in disrepair and refuse to do anything about it, have a history of serving invalid/no notices—should be reported to the local authority. Keeping a database of rogue landlords (and also rogue letting agents) that all relevant organisations could refer to could be beneficial.”
They gave specific examples:
One of our members of staff has had a recent case in which the landlord served an invalid notice and had been harassing the tenant.
NHA also have had instances of landlords harassing tenants by repeatedly sending text messages and telephoning them to demand rent, and also attending at the property without any prior notice.
NHA regularly assist tenants by writing to the landlord on their behalf explaining the legal procedure that must be followed, or advising the tenant to do so themselves.
Some local authorities have a Tenancy Relations Officer (TRO)/Tenancy Liaison Officer (TLO). From staff experience at NHA, this role is very beneficial, particularly in instances of illegal evictions by rogue private landlords. A suggestion could be made to the Select Committee for funding to be provided for this role.
Police have had local authority training into illegal eviction but some still do not understand landlord and tenant law and enforcement.
5.3 A nationwide registration scheme would help identify landlords across the country, (similar to food business registration). This would allow local housing authorities to develop their own targeted, risk based approach to housing and also help identify rogue landlords operating across boundaries with better sharing of information across local authority boundaries. Only as part of the HMO licensing application process does a landlord have to notify the local authority about other authorities where they have applied for a HMO licence.
5.4 All PRS landlords should be required to pass a fit and proper test, not just those operating under mandatory/discretionary HMO licensing. NCC has experience in Nottingham of a portfolio landlord with a few licensable HMOs being declared not fit and proper, but as they have significant numbers of other family/single let properties there is no ability to restrict their involvement/management of their other properties.
5.5 There should be higher fines for breaches of management regulations where prosecuted to bring it in line with failure to licence a HMO.
5.6 We need to move to “smarter regulation” of the sector, providing more ability to provide self-help mechanisms for landlords and tenants and encouragement to join accreditation schemes; light touch regulation for compliant/good landlords; the ability for local authorities to “target” regulation in much the same way health and safety “campaign” and target regulation eg slips and trips etc; and work with stakeholders and others to target non-compliant behaviour.
5.7 Let targeted regulation flow from and into the HHSRS and health cost calculators as an on-going addition to the evidence base which underpins it. There could be improved development of the HHSRS evidence base which is over 10 years old now with links to eg NHS, police and fire service statistics.
6.0 Regulation of letting agents, including agents’ fees and charges
6.1 There should be a move to professionalise the lettings and managing agents market. They should be required to be a member of a nationally recognised and independent organisation/scheme, backed with a complaints procedure including the Property Ombudsman. Part of this could also include nationally recognised training and continued professional development.
6.2 Notts Housing Advice stated “We have had instances of fees being taken by letting agents and then no suitable property being found. Also cases where fees have been paid or charges taken and these are non-refundable.”
6.3 Notts Housing Advice commented that: “Many letting agents create their own “fees and charges” including (but not limited to) credit check charges, admin fees, high late payment fees and disrepair call-out fees. NHA feel that it is important tenants are aware of the difference between these fees and actual rent due, as letting agents can often send confusing letters.”
7.0 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
7.1 Nottingham City Council is committed to utilising regulatory tools which it believes will have a beneficial influence on the PRS. The authority has implemented an Article 4 Direction to control the spread of HMOs. In addition, NCC is about to start a consultation on a proposed designation for additional licensing within the city.
7.2 Government should re-instate the ability to serve a legal notice (along with the current ability to prosecute) under the HMO Managementregulations. This should be accompanied with the ability to charge for the notice and undertake works in default whereappropriate. Prosecutions are very resource intensive and having the ability to serve a legal notice again would offer a tiered approach to the enforcement of these regulations. For some minor breaches of management regulations it may not always be appropriate to prosecute (eg public interest test), but they are still affecting the health, safety and welfare of the tenants. This would also remind the manager of the property of their roles and responsibilities, which are significant and not to be taken lightly.
7.3 There has been a flaw in housing enforcement due to HMO licensing legislation not covering those houses that are considered the more traditional type of HMO ie houses that have been split into flats. These are often some of the worst housing and management standards often due to shared hallways, multiple lease holders, managing agents and tenants. Indeed some of these properties are not even classed as HMOs due to them being purpose built or converted to the 1991 (or more recent) Building Regulations. This is a flaw in the legislation and really does limit enforcement of these types of properties, particularly as some of the legislation doesn’t apply to them. In university towns/cities such as Nottingham a large proportion of licensed HMO let to students. Whilst in some cases naïve, these tenants tend to have good access to advice, information, and guidance and don’t really fall within the vulnerable groups (under HHSRS). Where other types of tenants those with young children etc. may fall outside the licensing legislation they are more vulnerable and have less access to advice, information and guidance and therefore are more at risk from poor property conditions and rogue landlords. Source: NCC
7.4 The HMO licence application process should provide the ability for CRB checks to be undertaken in all circumstances (similar to taxi licensing). Landlords have significant powers, access to persons and their property and it would be appropriate to allow the local authority to be able to undertake a CRB check to assist them with their decisions around fit and proper assessments.
7.5 The administration and processing burden of HMO licences captures only a small part of the HMO market with a significant proportion of serious issues found in non-licensable HMO’s and properties that are eg houses split into flats, but are excluded as they do not fall within the current definition of a HMO. In Nottingham improvements have been made to the management of HMOs where we have issued over 1,700 licences. We have seen landlords leave the market due to enforcement action by us, which is positive too.
7.5 A registration scheme for all privately rented houses would allow local authorities to develop their own targeted, risk based approach to dealing with housing (similar to food registration).
7.6 Whilst there is a primary authority scheme consultation on-going about HHSRS, it may be more appropriate to consider HMO licensing as having a Primary Authority Scheme as some of the standards are not so much risk based, but fixed ie amenity and size and space standards.
8.0 Tenancy agreements and length and security of tenure
8.1 Notts Housing Advice stated: “Assured shorthold tenancies vary from six months, student rents tend to be for longer periods and some students accept properties after seeing them on the internet, without actually visiting the property first. They then find problems with the accommodation once they move in but are already bound by a tenancy agreement by this point. Also, people coming from abroad to Nottingham, viewing properties online and paying a deposit/rent in advance before viewing, then finding the property in a poor state.”
8.2 Tenants are not always aware of their rights as a tenant and if they do wish to complain to the council this can immediately put their tenancy at risk with the landlord seeking to evict if they complain. There could be improved protection for tenants that make a legitimate complaint to the housing authority about the conditions within their property.
8.3 Particularly (but not exclusively) for family properties where eg children attend the local school a tenancy period of longer than six months would be better for all and may also lead to improved education attainment with less disruption caused to the family.
8.4 As the PRS becomes more of a long term housing option for families unable to buy, tenancies should be longer in order to offer security and stability to those with children.
8.5 The Citizens Advice Bureau (Nottingham) commented that “Insecurity of tenure is a problem. If a tenant has two months + in rent arrears it is a mandatory ground for possession. This means that where a tenant has rent arrears as a result of a LHA claim not having been processed, there are no grounds to have the case adjourned to allow time for the claim to be processed and tenants cannot pay the arrears by instalment.”
8.6 The Citizens Advice Bureau (Nottingham) stated that “If the arrears are a result of a shortfall between rent and LHA and a client makes a claim or discretionary housing payments, again the length of time it takes for applications to be looked at can mean the tenant loses their home.”
8.7 The Citizens Advice Bureau (Nottingham) state “Section 21 Notices are frequently used to evict tenants and add to problems of insecurity of tenure.”
8.8 The Citizens Advice Bureau (Nottingham) stated “We have seen a number of clients who appear to be tenants of rogue landlords. They have received text messages telling them to leave their home when no legal proceedings have been taken.”
9.0 How local authorities are discharging their homelessness duty by being able to place homeless households in private sector housing
9.1 It is evident that the opportunity for councils to utilise PRS stock in their area for homeless duties expands the options available to Councils and to homeless people. Following consultation NCC plans to adopt the powers available within the Localism Act to make private rented sector offers. There are already mechanisms offering a range of protections to PRS tenants under existing statutory Review and Appeals for suitability and reasonableness. The government has also seen fit to put in place additional regulation giving clear guidance on these matters specifically for the private sector.
9.2 Ministers have stressed that councils must only offer homes that meet “good standards” and have minimal impact on employment, education or caring responsibilities. Tenancies must also be of a minimum 12 month duration and recurring duties may arise for up to 24 months after tenancy commencement. So it is important councils get it right first time.
9.3 It would be helpful if statutory guidance strongly supported or placed within regulation the compulsory utilisation of accreditation schemes which require registration and inspection. These do not have to be under the management of councils. Registration within a scheme would also help to identify fit and proper persons amongst existing and new registrations and expel those who fail to meet this test.
9.5 Councils must ensure a number of “safeguards” are in place when discharging their duty into the private rented sector, including current gas safety record, that any appliances, furnishings and wiring conform to standards on fire and electrical safety and the written tenancy agreement the local authority consider adequate is in place.
9.6 Ministers have also stated that these safeguards are expected to increase confidence in the PRS market place and “…will give vulnerable families the reassurance they need whether they’re housed in the private or social rented sector.” It is noted that these standards apply only for the Housing Act Part VII statutory homeless and not where homelessness prevention offers are made within the PRS. Families may feel the pressure of there circumstances means they have to accept what is offered or else end up living is hostels or temporary accommodation. The target group for these safeguards addresses the needs of vulnerable statutory homeless households. With this in mind it would be helpful if the standards applied across the PRS as many vulnerable households are not subjected to homelessness but there needs are equal.
10.0 Recommendations
10.1 There should be a set of national minimum standards for the private rented sector.
10.2 A national landlord registration scheme should be introduced.
10.3 There should be greater recognition for accreditation schemes and accredited landlords.
10.4 There should be a move towards longer tenancy terms.
10.5 Given the importance of the awareness of tenants rights and landlord responsibilities funding could be provided by government to support tenancy relations services.
10.6 To support homelessness prevention and security within the PRS:
PRS tenancies should be 12 months with an option for a 12 month extension if there are no problems.
Landlords should be required join a verified accreditation scheme complying with expectations for training and practice within the market place.
The minimum regulatory standards applying for homelessness should apply to homelessness prevention and across the PRS in general.
It should be recognised that vulnerable people exist in accommodation across the rented housing market.
January 2013