Communities and Local Government CommitteeWritten evidence submitted by Northampton Borough Council

Thank you for the opportunity to respond to the review of the Private Rented Sector. Whilst we appreciate the current economic climate and the need to reduce the Nations debt, we are also concerned for how the Housing Market is going to recover and once again start the process of providing much needed homes for households on Council’s waiting lists and those households who can not afford to become an owner occupier at the moment and are therefore relying on the private rented market.

This has obvious knock on effects for our proposed new duties to discharge homeless customers in the private rented sector, as rental prices will inevitably rise due to the demand from the would be newly created owner occupiers in any normal recovery cycle of an economic cycle.

We recognise how important the role of the private rented sector can be as a result of all these external factors, and we hope that our response provides sufficient information as to how we are preparing for this shift in tenure.

Response to the Private Rented Sector

1. Quality of Private Rented Housing and steps that can be taken to ensure that all housing in this sector is of an acceptable standard

Northampton Borough Council has adopted the recommendations contained within the Rogue Landlords report produced by the Department of Communities and Local Government during August 2012. Northampton Borough Council now has the largest number of accredited private landlords in the East Midlands region and is in the process of commencing with a consultation exercise to potentially introduce a Borough-Wide licensing scheme for all private rented properties and letting agents in Northampton. Northampton Borough Council has adopted the standards outlined within the Homelessness (Suitability of Accommodation) (England) Order 2012, and works with all Private Landlords and Letting agents to improve the quality of management within Northampton. However, Northampton Borough Council will be establishing a Social Lettings Agency in January 2013, to further improve the quality of accommodation in the Private Rented market.

2. Levels of Rent within the private rented sector, including possibility of rent control and the interaction between benefits and rents

Private Sector rents continue to rise in Northampton above the Local Housing Allowance adopted by the Department of Works and Pensions, and with an annual increase in the LHA and this rise being linked to the Consumer Price Index it is clear that Private Rented Sector Market rents are now unaffordable to the majority of local income working households in Northampton.

Rent control can help with ensuring affordability in this sector does not get beyond the reach of most households, however as part of the Montague report into the barriers against institutional investment in the PRS, the regulation of the sector and more importantly the Rent Control factor were the biggest worries to investors, therefore new PRS accommodation may be impacted upon by this approach.

3. Regulation of Landlords, and steps that can be taken to deal with rogue landlords

Northampton Borough Council would welcome the introduction of a national licensing scheme for private landlords, and this approach could follow the principles of the consultation report published by the Government for Wales. As stated in a previous response, we are considering the licensing of all private sector landlords in the Borough.

4. Regulation of lettings agents, including agents fees and charges

The regulation of lettings agents and their associated fees would be welcome. However the introduction of social lettings agencies would help reduce agent’s fees through competition. Local Lettings agencies as long as they seek accreditation could be the missing link between the management of the PRS and the quality advice and support landlords require and tenants.

In Northampton private lettings agents typically charge 10% fees, and the social lettings agency we are looking to introduce would charge 8%.

5. Regulation of houses in multiple occupation (HMO’s), including the operation of discretionary licensing schemes imposed by a local authority for a category of HMO in its area

Northampton Borough Council regulates the HMO sector through the national licensing scheme and has introduced a selective management of the non-licensable HMO stock via Article 4 arrangements. However, this could be simplified through a national licensing scheme for all private rented properties.

6. Tenancy Agreements, length and security of tenure

In terms of tenancy length, it would require a decision locally whether Private Sector Landlords could be captured under the Council’s Tenancy Strategy. Most tenancies in the private rented sector are for 6–12 months, with options to renew, however if they were to have regard to the Council’s Tenancy Strategy as part of an accreditation process or licensing process then thought would be needed as to what Tenancy Policies maybe suitable for landlords, but would enable the Council to meet its housing needs.

7. How local authorities are discharging their homelessness duty by being able to place homeless households in private sector housing

Northampton Borough Council has adopted the power via section 148 and 149 of the Localism Act to discharge the homeless duty in to the private rented sector and this will be the main pathway in to housing for homeless customer in the future. The key link here is also why the Council are placing an importance on the development of a social lettings agency, to help manage the Private Rented Sector more pro-actively and offer a degree of comfort to landlords that their assets will be managed by an established landlord with housing management experience. At Northampton Borough Council we are aiming to improve standards in the private rented sector, and to attempt to make the most from this tenure as growing pressures build on the development of new build and the current barriers to mortgage lending currently.

January 2013

Prepared 16th July 2013