Communities and Local Government CommitteeWritten evidence submitted by the Local Government Information Unit

1. Background

In March 2013, the Local Government Information Unit (LGiU) and the Electrical Safety Council worked together to undertake a survey of local government, focusing on senior officers and elected members with responsibility for housing.

The aim of the research was to investigate current local government practice in engaging with the Private Rented Sector (PRS), and their expectations for the future. We surveyed all English local authorities and received 257 responses representing 175 councils.

This submission to the CLG Select Committee’s inquiry into the private rented housing sector summarises the findings of our research.

These findings respond primarily to the following issues raised by the inquiry:

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;

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

regulation of letting agents, including agents’ fees and charges.

They help to establish what mechanisms councils currently have in place to deal with these issues, and their intentions in working with the PRS in future.

2. Key Findings

Some of the headline findings from the survey were as follows:

Regulation of landlords and letting agents

94.6% of respondents agreed, or strongly agreed with the statement “the council has an important role to play in the private rented sector”. Nearly 80% of respondents said they expected their council to take a greater role in relation to the PRS in future.

These findings were not restricted to councils of a particular political administration. Of 157 people who said they expected their council to take a greater role in future, 73 were from Conservative authorities, 60 were from Labour authorities, 19 were No Overall Control, four were from Liberal Democrat councils and one was an Independent authority.

Over 30% of respondents were interested in pursuing mandatory registration and licensing schemes in future. The majority wanted to invest in training and support for landlords and letting agents.

Cost is still perceived as the greatest barrier to licensing of the private rented sector.


The health and safety of tenants was seen as one of the primary reasons for working more closely with the PRS. 80% of respondents saw “gas and electrical safety” as a key driver for greater engagement.

11% of respondents already operated a council-run lettings agency. 13% planned to establish an agency and just under 30% said they would consider this in future.

3. Response Rate

257 individuals responded to the survey, representing 175 councils. Of these, 88 were Conservative Councils, 54 were Labour, seven were Liberal Democrat and 25 were NOC (one was the City of London). 117 were districts, 23 were unitaries, 17 were metropolitan boroughs, 14 were London boroughs and three were county councils.

Roughly 70% of responses were from officers, made up largely of heads of service and third tier housing managers, and 30% were from councillors, of whom three quarters were portfolio holders for this area.

Geographically, most responses were concentrated in the South-East, which represented just under a quarter of the responses, perhaps reflecting the pressures on private rented housing in this area. East Anglia was also heavily represented, at 15% of the sample, while London, the East Midlands and the North-West each contributed around 12% of responses.

4. Attitudes to the PRS

To determine current attitudes towards the private rented sector, we asked respondents to agree or disagree with a series of three statements (see above).

87.7% of respondents agreed or strongly agreed that “the council has a good relationship with private sector landlords”. It is perhaps worth noting that this may refer to the landlords with whom the council engages on a regular basis, for example those operating Houses of Multiple Occupation (HMOs).

77.5% also agreed or strongly agreed that the council has a good relationship with local letting agents. However, a significant minority of 22.5% disagreed with this statement.

94.6% of respondents agreed, or strongly agreed with the statement “the council has an important role to play in the private rented sector”.

5. Current Practice

We asked councils to explain how they engaged with the PRS. Unsurprisingly, statutory regulation of HMOs was the most common response. “Direct engagement with individual landlords” and “placing homeless people in PRS properties” were the next most popular responses. While 80% of councils ran forums for private landlords, just over 56% ran accreditation schemes, and only 37% ran licensing schemes.

Other specific responses to this question included the following:


Deposit Guarantee Schemes

London Landlord Accreditation scheme

Events and training courses

Landlords working group to explore key issues in depth. Members include representatives from council departments (housing, benefits), letting agents and private landlords.

Group licensing, accreditation, management services, housing grants and holding deposits to PRS for homeless.

A “business club” for a select few landlords in the borough.

Training all potential tenants going through our in-house PRS access schemes.

Private Rented Sector working group with representatives from landlord associations, Shelter, ARLA, the University of East Anglia, and individual landlords.

Tenant referencing service.

Considering selective licensing as an option for one area in the City.

Direct engagement but normally only in a reactive sense in response to complaints.

In response to a specific question regarding electrical safety, 36.2% said that they could monitor and assure the safety of PRS homes. However, from more specific responses in the comments section it becomes clear that this refers largely to HMO stock, to houses employed to discharge the homelessness duty or used in the rent deposit scheme, and on a reactive basis in response to complaints.

There is currently no legal requirement for private landlords to provide an annual electrical safety check or provide a record of electrical safety checks, as they do with gas. 37.2% of respondents said they could not monitor or assure the electrical safety of PRS homes and over a quarter did not know.

Individual comments included:

“Electrical safety is picked up as part of HHSRS inspections, which are predominantly reactive. We are currently dealing with a case where an electrician has falsely supplied certificates to landlords which was picked up as part of this process, but many others are probably going beneath the radar.”

“We do in respect of HMOs but not otherwise. If we become involved in enforcement in an individual case we will ask for a periodic inspection report to be produced but we would prefer if it was a statutory requirement like gas safety.”

“We enforce the Management of HMO Regs 2006 requirement upon landlords to provide a certificate of the fitness of electrical installations. This applies to licensed HMOs and to landlords in out Voluntary Accreditation Scheme. Elsewhere we undertake visual inspections of electrics and encourage landlords to take steps to ensure electrical safety.”

“Due to the vastness of the PRS (approx 36,000 properties) we don’t have the capacity to monitor all dwellings, however we would respond to a specific complaint about a specific property.”

“Whilst we have no licencing scheme to monitor this compliance, upon inspection if a property is in any way suspected of being below standard landlords are required to produce a period inspection certificate. This can be arranged informally or under the provisions of the Housing Act 2004 s235.”

“Following a complaint from a tenant we would carry out an investigation and if the electrical wiring was considered to be old or there were any defects we would require an electrical safety inspection certificate to be produced by a suitably qualified electrician.”

“All customers accessing PRS via our rent deposit scheme—properties are inspected in line with HHSRS and electrical safety certificate obtained before rent deposit issued”.

Those that had pursued licensing arrangements were able to assure a level of electrical safety in those properties:

“by ensuring electrical test certificates supplied on completion of licence applications and asking for evidence from landlords when investigating disrepair complaint”

“We do if the property is in a Selective Licensing area or part of our “Letwise” scheme or a licensed HMO. Otherwise checks are only made on complaint.”

Just over half of respondents said that they did undertake non-statutory regulation or monitoring of the PRS. When asked what form this took, the responses were as follows.

A minority of 22.3% undertook some form of mandatory registration and licensing of private landlords, and a smaller number did the same for letting agents. However, nearly 85% ran voluntary accreditation schemes.

Specific comments regarding the non-statutory work of local authorities included:

“Visits in connection with homeless offers and homeless prevention.”

“We have an officer whose role it is to work with the private rented sector agents and landlords to get more of “our” clients accepted into the PRS, and work on dispute resolution to keep tenancies intact.”

“We run a neighbourhood based proactive approach in specified areas of lower demand private sector accommodation which includes training landlords to identify hazards and taking a more proactive approach to enforcement with those who do not engage.”

“Licensing but only in a small designated area of the borough.”

“Incentives include loans regarding improving condition, energy efficiency, carbon monoxide alarms.”

“Free training and advice. We are looking to develop this aspect in conjunction with National Landlords Association.”

6. The Future

Nevertheless, nearly 80% of respondents said they expected their council to take a greater role in relation to the PRS in future.

There was no particular political bias to these respondents. Of 157 people who said they expected their council to take a greater role in future, 73 were from Conservative authorities, 60 were from Labour authorities, 19 were No Overall Control, four were from Liberal Democrat councils and one was an Independent authority.

One respondent explained some of the drivers for greater engagement:

“The Council is becoming increasingly reliant on the (private rented) sector for housing options and the impacts of welfare reform are likely to grow certain sectors of the PRS. The initial evidence base for discretionary licensing is compelling and we are currently undertaking a stock condition survey, which is likely to confirm that the sector needs better interventions. The PRS teams are involved in Green Deal, Winter Warmth Schemes and now delivering Flexible Home Improvement Loans—all measures which will increase the quality of the sector and support schemes such as the Deposit Guarantee Scheme.”

Several authorities commented that they had recently employed a member of staff to focus on conditions in the PRS. However, others noted that their ability to develop new work in this area was restricted by resource limitations.

More than one respondent wrote they were trying to promote self-regulation, particularly in the middle of the market, and were targeting their resources on the worst offending landlords. So while they were taking a more proactive approach, this might not imply licensing.

However, over 30% were interested in pursuing mandatory registration and licensing.

We asked authorities what they would like to monitor if they were to pursue greater intervention with the PRS, and “gas and electrical safety” was the most popular responses, with over 80% agreeing this was a concern for them.

Noise, parking, refuse, over-crowding, illegal evictions, financial rectitude and anti-social behaviour were also issues listed as concerns by respondents.

7. The Benefits of Working with the PRS

When asked about the benefits of engaging proactively with the PRS, responses were varied. The top three responses were:

improving the physical condition of the PRS;

reducing health and safety risks to tenants; and

improving management standards in the PRS.

Less than half saw it as an opportunity to develop better community insight, and under 40% as a chance to reduce hospital admissions.

8. Barriers to Licensing

Unsurprisingly, cost was seen as the most important barrier to licensing the PRS.

Some regarded licensing as a step too far in the context of their authority. Comments included:

“Too much intrusion into the PRS will put up a barrier between the authority and the PRS. At present we have good relationship with landlords.”

“It would be an unwarranted intervention into the market.”

“Experience has shown that it becomes an intensively administrative process which diverts resources away from the real issue of prosecuting the worst landlords. If a landlord wants to avoid licensing they can do so with little risk. Licensing is very often driven politically, and in my experience was used to try and deal with anti social behaviour rather than property condition.”

“There is a large private-rented market in the District. However, much of the available private-rented accommodation is aimed at tenants who can afford higher rent levels. This means landlords target both students and those in well paid work. The low paid or benefit-dependent population is largely excluded from the sector, and there is some concern that licensing and the attendant fees would act as a further disincentive for landlords to provide accommodation for this group.”

“There is currently little need as our standards are generally high. This is therefore not a priority when allocating what are increasingly scarce corporate resources.”

“Licensing the PRS generally would not improve standards, is overly bureaucratic and attracts compliant landlords to apply. All these factors reduce the time officers can spend trying to find rogue/non-compliant/criminal landlords and dealing with very poor housing conditions.”

“Meeting the burden of proof required. We cannot do selective licensing as we are a high demand area and cannot prove a link between ASB and the PRS. We are currently collating evidence for additional licensing. We expect local landlords to challenge us.”

“Prosecution costs for licensing offences, and the cost of issuing the public notices to comply with the Housing Act requirements, cannot be recovered from licensing fees. The current legislation needs to be amended to ensure that if licensing is introduced, that all costs associated with the activity can be recovered from the private rented sector. If a scheme does not proceed, the LA would have to pick up these costs.”

9. Local Letting Agencies

Lastly, we asked authorities if they planned to use their new powers under the General Power of Competence, to trade as a local lettings agency, including private rents housing.

13% did plan to establish an agency, and nearly 30% would consider this in future. 11% already ran an agency.

10. General Comments

Other comments from respondents included the following:

“The real focus of our efforts needs to be in providing the tools for consumers to help themselves with a fall back that allows us to prosecute decisively where this approach fails.”

“Reduced resources and budgets in councils will reduce ability and capacity to improve the private rented sector.”

“This is important work. PRS tenants are under more threat due to welfare reform than Social tenants so anything that can be done to improve both management and property standards is welcome.”

11. Conclusion

The survey findings demonstrate a wide spectrum of practice, ranging from full mandatory licensing, to the statutory minimum level of engagement, via selective licensing, voluntary accreditation schemes and training and support for landlords.

Several areas of consensus did emerge, however, from the broad range of responses to the survey and responded primarily to two issues addressed by the inquiry.

Regulation/Engagement with PRS

I.Councils have a key role to play in the private rented sector (95% of respondents agreed with this), and this role is becoming more important, as a result of a shift in the market and changes to welfare. Nearly 80% saw their authority taking a more proactive approach to the PRS in future.

II.This is likely to look very different in different areas of the country, as the balance in the rented stock in a locality may require a particular allocation of resources. Many councils are starting to try different approaches, but there appears to be scope for more coordination with regard to sharing learning. Some councils are focusing on selective licensing (or full licensing as with the London Borough of Newham), while others prefer more “light-touch” approaches such as voluntary accreditation schemes and training and development for landlords.

Quality of the PRS

III. A concern for the health and safety of tenants, particularly in relation to gas and electrical safety, is the most important driver for involvement with the PRS on the part of councils.

IV. A lack of resource is perceived as the biggest barrier to greater engagement with the PRS, and subsequent improvements in quality.

May 2013

Prepared 16th July 2013