Communities and Local Government CommitteeWritten evidence submitted by the Royal Borough of Kensington and Chelsea

1.0 Introduction

1.1 This report is submitted by the council of the Royal Borough of Kensington and Chelsea (RBKC), a local housing authority in Central London.

1.2 The Council’s Environmental Health Department is responsible for regulating the private rented sector and receives approximately 900 complaints from tenants every year. The Council also licenses houses in multiple occupation (HMOs).

1.3 The Council’s Tenancy Relations Department deals with private tenants’ complaints or disputes about their tenancies and investigates complaints about harassment and illegal eviction.

1.4 The Council is also responsible for rehousing homeless people and for issuing housing benefit.

1.5 Rents within the Royal Borough are among the highest in the country and are rising due to the increasing demand for privately rented accommodation, which means that the supply of affordable accommodation is decreasing. Because there is a shortage of social housing in the borough tenants on low incomes rely on Housing Benefit to supplement their rent. The forthcoming caps in housing benefit are likely to make it harder for many tenants locally to pay their rents. It is also expected that many local people may have to leave the borough to find cheaper accommodation elsewhere.

2.0 Executive Summary

2.1 Action is needed to deal with the conditions at the lower end of the privately rented housing market and also to protect tenants from unscrupulous landlords. At a time when private rented sector is growing, it is becoming ever harder for local authorities to carry out their enforcement function, due to limited resources and difficulties in using their powers under the Housing Act 2004 (HA04).

2.2 This submission makes 15 recommendations to help improve the private rented sector, including better funding of local authority tenancy relations and housing enforcement services; as well as easier access to housing advice and legal aid for private tenants.

2.3 It also requests that Part 1 of HA04 is streamlined to make it easier for local authorities to use and makes various suggestions for improving the legal powers available to local authorities. In particular it asks for a review of the Housing Health and Safety Rating System (HHSRS), the means by which Council’s assess housing conditions in privately rented and other housing. It requests additional legal and technical support for local authorities that has been lacking since the abolition of LACORS recently.

2.4 It also calls for consideration to be given to extending the use of landlord accreditation schemes, including mandatory accreditation across the private rented sector. A “light touch” licensing scheme for landlords, is also suggested. It also highlights the need for increasing the minimum term of assured shorthold tenancies (currently set at six months) and strengthening security of tenure for tenants to help deal with the problem of “retaliatory evictions” whereby landlords are able to evict tenants who complain about them to the local authority.

3.0 The Private Rented Sector in Kensington and Chelsea

3.1 The majority of housing complaints received by RBKC’s Environmental Health Department concern the bottom end of the privately rented housing market where rents are lowest. The tenants occupying this accommodation are often vulnerable and live on low incomes. It tends to be these properties that contain the worst housing conditions. Poor housing conditions are known to pose health and safety hazards for occupiers and thereby increase the burden on the National Health Service.

3.2 There are currently 182 licensed HMOs within the borough. HMO’s are a valuable element of the private rented sector as they provide much needed affordable housing. However, they also tend to house the very poorest and most vulnerable tenants, living in the worst housing conditions and, with notable exceptions, are often managed by the worst landlords.

3.3 Since the implementation of the HMO licensing provisions under Part 2 of the there is a trend for HMO landlords to try and avoid the licensing requirement by “self-containing” bedsits—ie installing showers and WC facilities in rooms that are all ready small or undersized. This work is often done to a poor standard and often creates additional hazards as conditions within the lettings become very cramped—for example burns and scalds in cramped and poorly laid out kitchenettes.

3.4 There has always been a tendency for HMO landlords to overcrowd their accommodation to maximise their income. Changes to housing benefit for young people as well as the acute shortage of affordable accommodation in the centre of London are also likely to increase demand for HMO accommodation here. In a seller’s market the temptations for HMO landlords to subdivide their accommodation into smaller units and cram ever more occupiers into undersized and unsuitable accommodation are likely to increase.

4.0 Steps that can be taken to ensure that all housing in the sector is of an acceptable standard

4.1 Effective regulation of the private rented sector is key to improving housing standards, particularly for the hard core of poorer landlords who will not engage constructively with the local authority or take up training/accreditation. As well as safeguarding tenants and minimising costs to the NHS regulation also benefits the majority of responsible landlords by moderating the conduct of their less responsible peers and helping to protect the reputation of the sector as a whole. The presence of an effective regulator and the knowledge that complaints from tenants will be investigated and acted upon promptly by the local authority helps motivate landlords to maintain and repair their properties. The two greatest obstacles to effective regulation are firstly the lack of resources to proactively root out poor housing and respond quickly to complaints; and secondly difficulties in using the Housing Act effectively.

4.2 Resources: Enforcement of housing standards is labour intensive. Unfortunately private sector housing services are not immune to the financial pressures affecting all local authorities. This has meant that budget cuts have had an adverse impact on front line housing enforcement at a time when the private rented sector is growing. Fewer staff and higher workloads mean that complaints can take longer to resolve. It may also mean that some interventions available to the local authority, for example prosecutions and, particularly, management orders under Part 4 of the Housing Act 2004 cannot always be considered.

4.3 RBKC is not alone among local authorities limiting its response to lower risk complaints so that it can prioritise action for the very worst cases. In the end this may be counter productive because early intervention by the Council can stop some properties deteriorating to the point where hazards become significant for the occupiers. Higher workloads also mean that officers are less able to work holistically with other agencies like social services and the NHS, which experience shows achieves the greatest benefits for vulnerable tenants. Instead they may restrict their interventions to the bare statutory minimum. See recommendation 9.1 below.

4.4 The powers under Part 1 of the Act in particular can be burdensome and difficult for local authorities to use. Fewer statutory notices are being served under HA04 when compared to the preceding legislation, the Housing Act 1985 (as amended by the Local Government and Housing Act 1989). Often front line officers attempt to get hazards resolved informally rather than using their Housing Act powers. Although there is an important role for informal action, statutory notices etc are usually more appropriate for the less responsible landlords who have proved to be non-compliant in the past.

4.5 Reviewing the Housing Health and Safety rating System—introducing standards of provision for some hazards: One of the reasons why front line officers may not favour serving improvement and other statutory notices is the difficulty and time taken in applying the Housing Health and Safety Rating System (HHSRS). This replaced its predecessor, the standard of fitness for human habitation (the fitness standard) in 2006. Under the previous system standards were set for various criteria (for example, freedom from serious disrepair, dampness that was prejudicial to health, provision of kitchen facilities, etc.) against which the condition of the property was judged.

4.6 In contrast, HHSRS is a risk assessment process that generates a numerical score for housing related hazards and is based on statistics for disease and injury held by the NHS and other agencies. The HHSRS approach requires that each dwelling is risk-assessed and dealt with individually on its own merits rather than setting standards for dwellings. Twenty-nine hazards have been prescribed for the purposes of the HHSRS. For some of these, such as falls, dampness, burns and scalds, etc. the system works very well as the assessment process is relatively straightforward. Other hazards however can be far more complicated. For example, the Chartered Institute of Environmental Health (CIEH) guidance on enforcement of excess cold hazards published in July 2011 shows the large amount of detailed evidence needed to support HHSRS rating for this hazard (see To properly evaluate an excess cold hazard the conventional housing inspection may need to be supplemented by heat loss calculations, thermal imaging, calculations on the size and output of radiators/heating appliances, measurements of temperature and humidity taken with a data logger etc, floor plans and measurements of room dimensions, etc.

4.7 However meticulously an officer may have carried out their investigation he or she may still not be confident that their HHSRS assessment and enforcement decisions will be upheld if the subsequent improvement notice goes to appeal at the Residential Property Tribunal. The low level of confidence that front line officers have in taking action over this hazard is not helped by the fact that, as the CIEH point out, the excess cold statistics upon which the HHSRS system relies are out of date. Furthermore, despite its being one of the most significant hazards in terms of its effects on the health of the population, enforcement of excess cold has proved to be contentious with landlords. Numerous appeals against notices requiring the provision or upgrading of heating systems have been lodged to residential property tribunals.

4.8 Other hazards, such as those relating to sanitation, personal hygiene and food safety tend to generate quite low scores when assessed under HHSRS and, again, can be difficult to deal with under HHSRS.

4.9 Enforcement would therefore be easier if standards of provision were set for the kinds of hazards that arise from amenities and other housing prerequisites instead of having to use HHSRS. The Housing Health and Safety Rating System should therefore be reviewed with the aim of developing a new system that is in effect a hybrid of the previous fitness standard and the current HHSRS systems. This would set standards for some issues—heating and basic amenities, for example—but would retain HHSRS for the other hazards that lend themselves to being rated easily.

4.10 Clear standards could be set for things that are required in every home in a similar way to the fitness standard—eg for kitchen facilities, water supply, sanitary accommodation, drainage, heating provision, bathing/personal washing facilities etc. The remaining hazards such as dampness, falls, burns and scalds, entry by intruders, etc could continue to be addressed under HHSRS as they are now. If unambiguous standards were set for those few housing pre-requisites it will be easier for landlords to understand what is required in their properties and also easier for local authorities to enforce when provision is not adequate.

4.11 It is recognised that a full review of HHSRS will be a major undertaking and that a new system needs to be easily understood and accepted both by landlords and enforcing authorities. However, if drafted appropriately it could greatly assist the local authorities in their efforts to secure much needed improvements to privately rented living accommodation. See recommendation 9.2 below.

4.12 Introducing a new disrepair standard: It would also be beneficial to introduce a disrepair standard, separate to and sitting alongside HHSRS (or its successor if the suggestions in the preceding paragraphs are taken up). Currently, local authorities can only deal with defects that create hazards and have a direct impact on health. This can lead to low quality, shabby accommodation outside the scope of regulation and this in turn has a deleterious effect on the reputation of the PRS and contributes to the feeling amongst some potential tenants that the less expensive part of the PRS is the least favourable choice compared with social housing and owner-occupation. See recommendation 9.3 below.

4.13 Simplifying and streamlining enforcement action under Part 1 of the Housing Act 2004: Part 1 of the Housing Act also poses too many bureaucratic/legal hurdles for the local authority that can jeopardise the notice if it goes to appeal. This means that it takes considerable time and effort to draft and issue the statutory notices that require landlords to repair or improve their properties. In comparison, similar processes that environmental health officers use to deal with food safety or health and safety at work matters are far simpler and easier.

4.14Too many local authority cases are then overturned at the Residential Property Tribunal on legal technicalities, such as failing to observe the correct procedure for giving notice of entry prior to carrying out an inspection. This is demoralising for enforcement staff (and can in part explain the decline in housing act enforcement) but more importantly it can leave the tenant unable to get the necessary repairs carried out to his or her home. Although a proportion of these failures may well be due to inadequate care on the part of the local authority it is likely that more notices would survive the appeal process if notices were easier to draft and serve. It is right that local authority powers are balanced by meaningful rights that protect the interests of landlords but the current system favours landlords excessively, to the detriment of local authorities and tenants. See recommendation 9.4 below.

4.15 LACORS: The recent abolition of LACORS was a blow to private sector housing enforcement. Their invaluable technical and legal support on difficult topics that affected all local authorities such as use of the powers of entry, fire safety in HMO’s and overcrowding will no longer be available. This means that each Council will have to find its own solution to this kind of issue in the future, which is likely to lead to inconsistencies in enforcement. See Recommendation 9.5 below.

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

5.1 The landlords with whom RBKC’s Private Sector Housing Team have most contact tend to be those at the lower end of the privately rented market. Whilst many landlords are cooperative and responsible, there remains a significant minority who are less so.

5.2 Some of the issues that commonly arise with the poorer landlords in the Royal Borough are:

Failure to meet repairing obligations.

A reluctance to invest in their properties and carry out preventative maintenance.

Inadequate management of their properties.

Lack of awareness of/failure to observe the proper procedures for recovering possession of their properties.

Harassment of tenants.

Retaliatory evictions (for example, where a landlord evicts a tenant after they have complained to the Council about disrepair).

A general lack of professionalism and lack of awareness of the obligations to their tenants.

5.3 Access to housing advice for tenants: Many landlords get away with poor conduct either because tenants are too frightened to complain or do not know who to complain to. Cuts in resources for law centres providing free housing advice and restrictions on the availability of legal aid have made it harder for tenants who have fallen into difficulties to get the advice they need. These services often rely on funding from local authorities who themselves are having to deal with cuts to their budgets. Council tenancy relations officers also have difficulties with resources and find it hard to respond appropriately to complaints of harassment or illegal evictions. Rogue landlords seem to be increasingly aware of these facts and are able to use them to their advantage. See recommendations 9.6 and 9.7 below.

5.4 The best deterrent for the worst rogue landlords who persistently let accommodation in a dangerous condition is robust enforcement by the local authority—usually prosecution. Unfortunately, resources do not always allow this. See recommendation 9.1 below.

5.5 Landlord accreditation: Accreditation is a highly effective, low cost means of engaging with the responsible majority of private sector landlords and raising their expertise and professionalism. In 2008 the Centre for Housing Policy at the University of York produced a report entitled “The private rented sector, its contribution and potential” (subsequently dubbed the “Rugg review”). The recommendations of the report were not implemented and during the four years since its publication the private rented sector (PRS) has grown further, the problems highlighted in the report have remained valid and indeed appear to have become more widespread. The report concluded that the majority of PRS landlords are untrained amateurs or accidental landlords through inheritance etc. Many have entered the business cold as investors under buy-to-let. Nearly 75% of landlords are individuals, most with between one and four properties. The report recommended that if the PRS is to grow, and it has, landlords need to be “professionalised”.

5.6 Accreditation schemes are ideally placed to achieve this. The London Landlord Accreditation Scheme (LLAS) now has over 10,000 members all of whom have undertaken basic landlord training, have signed up to a landlord code of conduct and who undergo continuous professional development to remain engaged with the scheme and current in their knowledge. The scheme is very low cost to landlords, agents and local authorities and consumes very little direct local authority resources. Accredited landlords are unlikely to require local authority enforcement and this releases resources to be directed towards those landlords at the poor end of the spectrum for whom accreditation is inappropriate.

5.7 Accreditation benefits landlords and can give them an advantage in the market-place by helping them to establish their good reputation. Accredited landlords should therefore be more attractive to prospective tenants. The more landlords who take up accreditation, the stronger is the incentive for other landlords to do so in order to remain competitive. At present take-up for voluntary accreditation within the Royal Borough is still low, at about 9%.

5.8 For these reasons we believe accreditation should be encouraged and widened. The scheme is currently voluntary and attracts members through offering benefits and incentives. HMO license fees are usually discounted for accredited landlords. Another suggested incentive is the provision of fast-track housing benefit services for accredited landlords.

5.9 We believe accreditation schemes are most effective when led by local authority/landlord partnerships and believe the established LLAS is an good model. The LLAS model has already been rolled out to other areas of England and Wales and could form a national model scheme, which would bring economies of scale and bring about consistency. See recommendation 9.8 below.

5.10 Moving further towards an obligatory or mandatory accreditation scheme would widen its membership base towards a critical mass and increase significantly the benefits to the PRS. This could be achieved through making landlord accreditation a requirement to gain access to Local Authority placements, leasing schemes etc. We believe that for licensable HMOs an approved Code of Practice should be adopted under section 233 of the Housing Act 2004. Training against that Code could then be a licensing condition under section 67(f). The Code of Practice and training could be geared to the existing LLAS code of conduct and training syllabus (or the two could be otherwise aligned). The cost of accreditation training could be discounted against the HMO license fee making it cost neutral for landlords. This is already the case in many London local authorities that recognise the longer term cost savings accrued by not having to engage in costly enforcement action. Landlords who are unable or unwilling to undertake the new mandatory training would be in breach of the licence condition and would be effectively excluded from the HMO market. See recommendation 9.9 below.

5.11 Requiring accreditation in all cases where housing benefit is paid has been suggested. In the current climate many landlords are reluctant to accept housing benefit claimants and the effect on the market of such a move requires careful consideration. If we are to consider widening mandatory accreditation it may be more prudent to extend the mandate across the entire PRS so as to avoid stigmatizing housing benefit recipients and creating barriers to their access to the PRS. See recommendation 9.10 below.

5.12 Licensing landlords: Accreditation is an effective vehicle for bringing improvements in the PRS but there is a need for some kind of sanction to exclude those who choose to flout the law. The Rugg Review suggested a “light-touch licensing scheme”. What was really being suggested was a simple landlord registration scheme with some conditions attached. The proposal was that in order to operate in the PRS landlords would need to apply for a “landlord number”. This would then be required on all official documentation. Rather like a driving licence, it would be both an offence and a great practical difficulty to operate without one. It could be required to create or terminate a tenancy, to validate a tax return, to access student accommodation or local authority schemes etc. Landlords who committed offences would gain points and eventually be disqualified. The scheme would be low cost for the landlord with few hurdles to jump. It would produce a database of landlords, a starting point from which to develop market intelligence and engage more widely with landlords. We believe that some sort of scheme along these lines would make it very difficult for rogue landlords to operate and if the penalties for operating outside the scheme were pitched appropriately they could be driven out of the PRS. See recommendation 9.11 below.

5.13 Landlord/property rating websites. There are “Trip Advisor” type websites that rate landlord and agents that tenants can use to help them decide whether to take up a tenancy. However, at present it appears that not enough people know about them or use them to make them valuable. These should be promoted so that prospective tenants are able to make better informed decisions before they take up a tenancy. See recommendation 9.12 below.

6.0 Regulation of Letting Agents, Including Agents’ Fees And Charges

6.1 RBKC’s tenancy relations department often experiences problems with agents—often involved in letting bedsit accommodation, etc who appear to be complicit with the landlord in harassment/attempted illegal eviction of tenants. However, proving this is not easy and prosecution is very difficult with local authority resources as they are.

7.0 Regulation of Houses in Multiple Occupation

7.1 Management Notices for Houses in Multiple Occupation: Section 372 of the Housing Act 1985 contained powers that enabled local authorities to serve statutory notices to require landlords to comply with HMO management regulations. As with other statutory notices the local authority then had the power to carry out the remedial works if the landlord’s did not comply, making for a quick remedy for the tenants. Unfortunately, this very useful tool was not included in the HA04. Therefore the only sanctions now available to local authorities are either to prosecute the landlord for failing to comply with the regulations or to use HHSRS and Part 1 of the 2004 Act. The prosecution option will criminalise the landlord and is usually time-consuming and expensive for the local authority but will provide no guarantee that the contraventions will actually be rectified at the end of the process.

7.2 The existing HHSRS powers do provide a remedy as the local authority is able to carry out works in default of an improvement notice, but these powers can be burdensome for the local authority to apply in HMOs, particularly in the larger properties. Many of the hazards arising from contraventions of HMO management regulations are relatively simple items that can be fixed in far less than the twenty or thirty minutes it can take a council officer to rate the hazard under HHSRS. For example, a piece of loose carpet or missing light bulb at the head of a stairway can be quite significant in terms of the hazard it poses but can be remedied in just a minute or two. When one considers that many of the HMO’s in RBKC and other central London authorities can be very large, sometimes containing upwards of 40 lettings, and also that a single HMO inspection can easily identify well in excess of 100 contraventions of the HMO regulations, the burden some local authorities face in dealing with large HMOs under HHSRS comes into perspective. See recommendation 9.13 below.

7.3 Interim and Final Management Orders: Management orders under Part 4 of the Housing Act 2004 are potentially a very useful measure, particularly in dealing with the worst HMOs. However, they can difficult and resource intensive to implement. Once an order has been granted it can require a Council officer to be working on the property almost full-time, even when the local authority has engaged an agent to manage the property. Because of this it can be difficult to secure the political will from elected members necessary for these measures to be authorised. See recommendation 9.14 below.

8.0 Tenancy agreements and length and security of tenure

8.1 The minimum letting period for assured shorthold tenancies is felt to be too short and that tenants have too little security of tenure. RBKC’s environmental health staff do come across “retaliatory eviction” scenarios on a regular basis. This is where bad landlords issue notice to quit after a tenant exercises their right to complain to the local authority because the landlord has not carried out repairs. Most PRS tenants hold little or no savings and the prospect of having to find advance rent and deposits and a new home is daunting.

8.2 RBKC’s Council’s tenancy relations officers have noticed that since the Local Housing Allowance rates have been cut and because benefits are paid direct to tenants, landlords are cautious about entering into a contract longer than 6 months through fear of rent arrears. Therefore any changes to the length and security of tenure need to be drafted with great care to avoid deterring landlords from renting to tenants who receive benefits. Any new provisions would also have to contain appropriate safeguards for landlords against unscrupulous tenants but the real fear of retaliatory eviction warrants some control. See recommendation 9.15 below.

8.3 There are also signs that with the cuts in benefits and scarcity of affordable accommodation, properties are being let more to “lodgers” living as part of the landlord’s household, rather than on the normal assured shorthold tenancies. In these circumstances it can be difficult for the Council to determine whether the occupiers are tenants or licensees. However, these landlords seem to be operating on the basis that the occupiers are lodgers, which, if correct could mean that the occupier’s security of tenure is tenuous. RBKC’s tenancy relations officers believe that there will be more of these types of lettings, and more contentious evictions as a result.

9.0 Recommendations

9.1 The funding provided by central government for private sector housing enforcement should be increased and ring-fenced it so that it cannot be used for other purposes (See points 4.1–4.3 and 5.4 above).

9.2 The Housing Health and Safety Rating System should be reviewed with the aim of developing a hybrid system for dealing with housing conditions. It is suggested that the new system could retain the current risk assessment for some issues and set standards of housing provision for others, such as ie for kitchen facilities, water supply, sanitary accommodation, drainage, heating provision and bathing/personal washing facilities. See items 4.5–4.11 above.

9.3 A disrepair standard should also be considered to deal with matters that fall outside the hybrid system detailed in the previous paragraph. See item 4.12 above.

9.4 A review of Part 1 of the Housing Act 2004 would be welcome to streamline the enforcement process and re-set the balance between the rights of the landlord and the need of the LA to issue notices quickly and without undue risk of them being overturned on a technicality. See item 4.13 and 4.14 above

9.5 Additional legal and technical support is provided centrally for local authorities to fill the gap left by the abolition of LACORS. See item 4.15 above.

9.6 Better resources for Tenancy Relations Officers. See item 5.3 above.

9.7 Better funding for Housing Advice Centres and better access to legal aid for private tenants. See item 5.3 above.

9.8 Promotion of landlord accreditation schemes (modelled on LLAS) as a means of professionalising landlords. See items 5.5 to 5.11 above.

9.9 CLG should adopt an approved Code of Practice for licensable HMOs under Section 233 of HA04. See item 5.10 above.

9.10 Consideration should be given to introducing mandatory accreditation for landlords across the entire private rented sector. See item 5.11 above.

9.11 A regime of light touch licensing should be introduced for all private landlords along the lines recommended in the Rugg Review. See item 5.12 above

9.12 Promotion of websites that enable tenants to rate landlords and properties. See item 5.13 above.

9.13 New powers to provide a quick and effective remedy for contraventions of HMO management regulations would be welcome. Local authorities should be able to serve straightforward statutory notices and then to carry out works in default if the notices are not complied with. See items 7.1 and 7.2 above.

9.14 Reviewing and streamlining the provisions for interim and final management orders under Part 4 of HA04. See item 7.3 above.

9.15 The minimum length of tenancies should be granted for longer periods and should provide greater security of tenure. However, the new provisions should be drafted with care to minimise the risks of reducing the availability of rented accommodation to tenants receiving housing benefit etc. See items 8.1–8.3 above.

January 2013

Prepared 16th July 2013