Communities and Local Government CommitteeWritten evidence submitted by Mansfield District Council

1.0 Executive Summary

1.1 It is recognised that monitoring the private rented sector (PRS) housing market, working collaboratively with landlords and enforcing standards is extremely difficult to do in a proactive and inexpensive way.

1.2 Mansfield District Council considers that existing methods of improving standards in the PRS is failing. The PRS needs to be better regulated and to help achieve that aim the Government should consider the introduction of a simple but compulsory registration scheme along with a statutory standard that dwellings should meet.

1.3 With increasing reliance being placed on the PRS by Government and local authorities and with the sector housing many vulnerable households consideration should be given to creating a strict liability offence in respect of housing standards.

1.4 To make the PRS more professional and to promote the sector as a housing market of choice rather than one of need, better regulation is required.

2.0 Submitter Details

2.1 This evidence has been prepared by the following officers of Mansfield District Council:

Rob Purser, Strategic Housing Manager—qualified Environmental Health Practitioner with expertise in private sector housing enforcement, member of the Chartered Institute of Housing.

Thomas Toumazou Principal Housing Officer (Private Sector)—qualified Environmental Health Practitioner, Accreditation Network UK Secretary, HMO Network steering group, ANUK/Unipol Code of Management Committee for Student Accommodation member.

Michelle Turton, Housing Needs Manager—developed the Council’s Multi-Agency Rented Solutions service which works in partnership with the PRS, expertise in Housing Options and providing solutions to all vulnerable client groups, member of the Chartered Institute of Housing.

Peter Worrall, Benefits Manager—expertise in delivering the Housing Benefits service.

3.0 Monitoring the PRS

3.1 The quality of the PRS housing stock is difficult and expensive to determine. The PRS is able to respond rapidly to changes in the market and socio-economic circumstances and therefore no method of periodic survey can provide an accurate description of the PRS at any one time.

3.2 It is not possible to identify the individual homes within the PRS in the district—stock condition surveys therefore have to be of the private sector as a whole and details of tenure recorded during inspections. It is believed that the PRS has grown since the Council’s last stock condition survey but it is difficult to measure the growth and condition without considerable expense. Due to diminishing resources the case for a stock condition survey has to be set against the other more immediate demands on Mansfield resources.

3.3 Identification of privately rented homes through compulsory registration of the PRS would significantly enhance the quality of information and the assessment of stock condition.

4.0 PRS Registration Scheme

4.1 An ability to identify homes within the PRS and who operate them would assist in:

Determining the size of the PRS.

Determining the conditions found within the PRS.

The effective use of resources to enforce against the worst housing conditions in the PRS.

Implementing effective systems of regulation and recognition of self-regulation.

Improvements in the PRS through the provision of information directly to landlords.

The promotion of Landlords’ Associations.

The promotion of Accreditation Schemes.

Deciding housing policy.

The formation and implementation of housing strategy.

Assessing housing need and how it may be met.

Ensuring a balanced housing market and creating sustainable communities especially when developing new homes.

4.2 An effective PRS registration scheme will:

Provide a name and contact details including an address of the appropriate person for the service of legal notices.

Provide the addresses of all properties owned by landlords that they or a family member do not live in.

Apply sanctions to landlords for failing to comply with its requirements of sufficient deterrent such as an inability to demand rents, which could allow the Proceeds of Crime Act to be applied.

Require payment of a small fee which will enable the cost of the registration scheme to be covered.

Be administered by the local authority.

5.0 Regulation of Landlords and Standards in the PRS

5.1 There is currently no national standard for the private sector. The Housing Act 2004, Part 1 does not provide the standards to be applied to the PRS only a means of assessment. Mandatory action is only required when a Category 1 hazard exists. The absence of Category 1 hazards as assessed under the Housing Health and Safety Rating System (HHSRS) does not reflect societal expectations.

5.2 There is no longer a requirement for local authorities to achieve the decency standard in the PRS. For example, HHSRS cannot raise the standards for food safety (kitchens) and personal washing facilities (bathrooms) to a reasonably modern standard. Nor can it achieve a reasonable standard of repair. HHSRS can go some ways towards achieving thermal comfort but does not necessarily require affordable warmth.

5.3 In contrast fire safety is determined by the LACoRS National Fire Safety Guidance which raises standards in excess of the elimination of a Category 1 hazard of fire.

5.4 HHSRS is based on evidence of health and safety outcomes. The initial data provided for the national averages is now over a decade old and local or regional resources are not available to update the datasets necessary to make a valid assessment. This will seriously compromise the effectiveness of Part 1 if not redressed.

5.5 Good and moderate landlords can and are being engaged to bring up standards of professionalism through the DASH Landlord Accreditation Scheme and other means. The numbers participating are low and this is being developed to achieve a greater impact. The cost-effective regulation of the PRS requires the co-operation of landlords and an element of self-regulation by a trustworthy system.

5.6 A system for auditing or approving accreditation schemes is required which has Government support.

5.7 Criminal or “rogue” landlords are difficult to identify and taking enforcement action against them is slow with limited results. Limited proactive enforcement is possible and this is done against the worst landlords. A risk based system of assessment for enforcement action in accordance with Better Regulation principles is required.

5.8 A PRS register will enable the use of limited resources in enforcement against the worst landlords as the portfolio and condition of properties could be assessed.

5.9 As enforcement action will only be taken in the worst cases recharging of notices should not be discretionary.

5.10 The lack of powers of enforcement to deal with substantial disrepair has the effect of:

(i)Not being able to require repairs for a complaining tenant unless it can be demonstrated that it is justified under HHSRS. Their only powers of redress remain through civil action which is rarely exercised.

(ii)An inability to prevent decline of housing stock.

5.11 The decency standard was devised for the Public Sector and the age criteria are not necessarily relevant to the living conditions in the private sector. A revised decency standard which is of greater relevance to the private sector is required.

5.12 To improve standards in the PRS and to address the problem of increasing disrepair in the PRS it is necessary to provide enforcement powers to require the PRS to achieve this decency standard.

5.13 The Council would recommend the introduction of a strict liability offence whereby failure to ensure a property meets an adopted standard is an automatic offence.

5.14 Appeals against enforcement notices served under the Housing Act 2004 are heard at the Residential Property Tribunal (RPT) and not the Magistrates courts. The RPT hearing is not subject to the strict procedures of the criminal court and decisions can be inconsistent, do not create case law and therefore are not binding. Housing Act appeals should be heard in the courts to create case law and give consistent guidance and improved confidence when enforcing housing standards.

6.0 Regulation of HMOs

6.1 Part 2 of the Housing Act 2004 is bureaucratic and expensive to administer. No economy of scale can be achieved if only a few HMOs are required to be registered.

6.2 Discretionary adoption of Part 2 licensing would help smaller authorities by removing the administrative requirement of licensing which cannot be fully recharged by smaller authorities without setting a punitively high licensing fee.

6.3 Interim and final management orders are complicated, expensive, have a high risk of failure and are resource intensive. This is a problem in smaller districts which do not have many licensable HMOs. Other means can be used effectively to improve standards in houses that cannot be licensed. Management Orders should be discretionary. Operating an HMO without a licence should be an offence which carries daily fines until a licensing application is made.

7.0 Unlawful Evictions and Harassment

7.1 Unlawful evictions and harassment cases are extremely difficult to investigate and prosecute with success. The sanctions are limited and there is not an effective deterrent for landlords not to unlawfully evict. Civil sanctions are greater, carry a lower burden of proof and greater redress for the tenant.

7.2 Consideration should be given to empowering tenants to take civil cases of harassment and unlawful eviction.

7.3 Government should consider how to stop the practice of retaliatory eviction of tenants when they complain that repairs are not been completed. Often tenants will live in poor condition housing because they are afraid they will be made homeless by their landlord. Currently, a landlord is prevented from evicting under a Section 21 notice if they have not registered a deposit with a tenancy deposit scheme. Government can introduce something similar in relation to the condition of a property.

7.4 A landlord should be prevented from evicting a tenant if it can be established that the property was in a poor state of repair and that the tenant has complained about the condition of the property and that the complaint was made prior to the notice being served.

8.0 Levels of Rent in the PRS

Rent control and the interaction between housing benefit and rents

8.1 The level of rents in the private sector in Mansfield appears to have increased particularly in housing benefit cases since the introduction of Local Housing Allowance (LHA). Comparisons from information held suggests that rent valuations that remain under the rent officer referral arrangements can be 5–13% below that of LHA cases.

8.2 It would appear that the rental market for a large number of LHA cases has aligned itself to the LHA rates or above to maximise the rental potential. Even after the 30th percentile LHA change it is difficult to see a substantial realignment back to pre LHA days.

8.3 There appears to be more demand for private rented sector accommodation possibly due to the economic downturn. It is questionable if the accommodation is available to meet the needs which in turn may be driving up costs.

8.4 Ensuring rent levels are fair and affordable is desirable but how to achieve this is not obvious. Registered rents, fair rents and rent officer valuations all have been used in the past in various ways. Invariably, central government will have to take the lead and legislate after consultation.

8.5 The market is a powerful driver in raising standards but it can also have a negative impact as less well informed or more desperate prospective tenants may seek unsuitable accommodation based on price only.

8.6 Provision of information to tenants to enable them to make an informed choice will help maintain standards.

8.7 The impact on rent regulation on standards is unknown. It should not be introduced without considerable consultation and research.

8.8 Welfare reforms to housing benefits for single under 35’s have made accommodating this group of people almost impossible. In an area like Mansfield, employment is extremely low paid and often part time or temporary. For this group of people, reducing the safety net provided by housing benefit means that even if they are fortunate enough to be in work, they are unlikely to be able to afford their housing costs given that the gap between housing benefit entitlement and rent levels is so much greater.

8.9 Government has stated that it intends that under 35’s will stay at home for longer but the number of single people presenting as homeless and their reasons for this reveals that staying at home is often neither a safe nor realistic option for them.

8.10 Family accommodation is being affected by changes in LHA. In Mansfield two bedroom houses are let relatively easily but any further reduction in LHA rates is likely to impact on this as landlords’ profit margins are further reduced. Three bed houses and anything bigger are currently virtually impossible to let as the way in which the LHA rates are calculated means that LHA rates are difficult to achieve. Landlords are only housing LHA tenants in such properties if they are willing to and can afford to, let them at a reduced rent. It is likely to be a problem which social housing providers will also begin to experience as the “bedroom tax” begins to take effect.

8.11 It is the experience of Mansfield District Council officers that some landlords are reporting they will consider moving out of the benefit market if direct payments stop, the occasional two months loss or delay of rent is factored into their business model. The payment of all LHA direct to tenants may reduce availability.

8.12 Government is rightly setting minimum standards for properties for which local authorities can discharge duty into. Multi-Agency Rented Solutions (MARS) is a scheme introduced by Mansfield District Council to provide good quality homes by working in partnership with private sector landlords. It has taken a significant number of years and a real commitment of resources to make the scheme a success. Given the reduction of resources to local authorities, if local authorities are going to see discharging their duty into the private sector as a possibility, they will have to be encouraged and supported to develop their working relationships with private landlords.

8.13 Local authorities should be encouraged to provide incentives to landlords to help promote such partnerships. Showcasing successful schemes and best practices to other local authorities and supporting them to develop their own will assist the development of more schemes like this which are successful. It is agreed that the PRS is able to assist in meeting housing demand but some resources may have to be committed to specific assistance to support this.

9.0 The Regulation of Lettings Agents

9.1 Letting agents may have very limited knowledge of housing law. The standard of the properties they have on their portfolio can be very poor and the fees they charge to landlords and tenants are often high and hidden. This area needs to be regulated to ensure that each is operating to a code of practice and that there are serious sanctions if they do not adhere to that code of practice. There needs to be an independent inspection body that should be able to assess the operational processes and practices of lettings agents which could be the local authority. Fees they charge need to be regulated to make them transparent and fair.

9.2 Letting agents should be regulated to ensure a basic minimum level of service and housing conditions.

10.0 Recommendations for Action

10.1 Introduction of a compulsory registration system—Identification of the PRS through compulsory registration would significantly enhance the quality of information and the assessment of the PRS stock condition and will enable strategies for improvement to be developed.

10.2 Systems of regulation which enable the raising of standards are required. The support of Government for Accreditation schemes in the PRS is needed. A system for auditing or approving accreditation schemes is required which has Government support.

10.3 To improve standards in the PRS and to address the problem of disrepair in the PRS it is necessary to provide:

a revised decency standard which is of greater relevance to the private sector;

enforcement powers to require the PRS to achieve this decency standard; and

a strict liability offence.

10.4 Appeals against notices to be heard in the courts.

10.5 Discretionary adoption of part 2 licensing—This would help smaller authorities by removing the administrative requirement of licensing which cannot be fully recharged by smaller authorities without setting a punitively high licensing fee.

10.6 Interim and Final Management Orders for HMOs should be discretionary.

10.7 Operating an HMO without a licence should be an offence which carries daily fines until a licensing application is made.

10.8 Rent controls should not be introduced without considerable consultation and research.

10.9 Provision of information to tenants to enable them to make an informed choice will help maintain standards.

10.10 Consideration should be given to empowering tenants to take civil cases of harassment and illegal eviction.

10.11 A landlord should be prevented from evicting a tenant if it can be established that the property was in a poor state of repair and that the tenant has complained about the condition of the property and that the complaint was made prior to the notice being served.

10.12 Letting agents should be regulated to ensure a basic minimum level of service and housing conditions.

January 2013

Prepared 16th July 2013