Communities and Local Government CommitteeWritten evidence submitted by Liverpool City Council

1. Executive Summary

1.1 It is estimated that in excess of 50,000 households rent privately in Liverpool. Rates of private rental accommodation within Liverpool have been growing and are significantly above the national average due in part to the reduced funding available to Social Housing Providers. The sector has grown in recent years, particularly in tandem with the expansion of the City’s universities. In the City Council’s experience, the majority of private landlords act responsibly and the Council is committed to working with these, to support their businesses in making a positive contribution to the City’s economy.

1.2 Over the last few years there has been an increase in purpose built student accommodation and professional/executive accommodation in the city centre area.

1.3 Liverpool has taken a proactive approach in raising standards in the private rented sector and the Mayor has launched a 10 point pledge to support this aim. Liverpool has recognised that its role is not just one of regulation and enforcement, but that private landlords are housing providers meeting housing needs in the city. It is felt that due to increasing funding restrictions in the social housing sector, it cannot be totally relied on to cater for all vulnerable households in housing need and that these households are inevitably needing to resort to the lower end of the private rented sector to gain accommodation. It is therefore the City Council’s aim to ensure that the standards in the private rented sector are maintained to a high enough level to ensure households live in safe, comfortable and warm homes, irrespective of their level of income.

1.4 To this end we have done the following:

Established a landlord accreditation scheme (CLASS) which currently has 325 landlords and 1590 properties on its register with a further 70 applications in process and commitment around a portfolio of a further 350 properties.

We have a private landlords forum held twice a year usually attended by 50–60 landlords.

We have a tenancy bond scheme which assists households threatened with homelessness into private tenancies by covering the cost of deposits.

Supported initiatives such as the “Rate your landlord” scheme organised by Liverpool’s student representatives.

2. Introduction and Background Information

2.1 This paper is submitted by Samra O’Neill (Private Sector Housing Strategy Manager, Liverpool City Council) in consultation with colleagues from Housing Strategy, Public Protection and Benefits Service.

2.2 Liverpool City Council commissioned a House Condition Survey in 2010 which estimated that excluding long-term vacant dwellings, the private-rented sector in Liverpool contains 42,541 dwellings or 28.8% of all private sector housing.

2.3 It is estimated the private-rented sector contains 50,399 households. The experience is of households within the private-rented sector exhibiting a younger household structure and above average socio-economic disadvantage. Of particular relevance within the sector is the large student population estimated at 12,515 households or 24.8% of the total.

2.4 Average annual net household income for private sector households in Liverpool is estimated at £19,822 per household compared to a current UK average of £24,580. Low income households in the UK are normally defined as having a net income that is 60% or less of the median British household income that year. Using this definition, 16,733 households (10.7%) in Liverpool are on low incomes.

2.5 The proportion of low income households increases in the private-rented sector and again in the pre-1919 terraced housing and converted flat markets. Households most affected include the elderly, single parent families and households from a minority ethnic background.

2.6 Liverpool also has a large student population and since 1990 there has been a rise in the provision of purpose built accommodation. Both Liverpool University and Liverpool John Moores University (LJMU) have private sector partner developers. LJMU currently has around 18,000 full-time students so on their figures about 1/3 of these are in the city-centre Hall sector in a normal year. There are probably several hundred more living in the city-centre flats and then several thousand in shared houses and flats in the suburbs. LJMU also house around 55% of each new intake in the Halls so if that is repeated across their time here, it suggests that around 10,000 LJMU students are in accommodation which is not their family home at any given time during the academic year. Liverpool University also have two private sector student accommodation landlords providing 450 bed spaces for their students.

3. Rents

3.1 No formal research has been carried out analysing private rent levels in the City however anecdotally it appears there has been some downward pressure on rents due to the reduction of Local Housing Allowance Rates.

3.2 Again anecdotally, it is understood that private sector landlords have not left the sector despite the lowering of overall lower rent levels although this may be due to the general economic environment.

4. Quality and Regulation of Landlords

4.1 The 2010 Private Sector Stock Condition survey showed that the worst housing conditions in the city are concentrated in the private rented sector. Satisfaction levels were also lower than for other tenures.

4.2 The Public Protection Team lead on enforcement action against private landlords. In the last year the following actions were taken:

The City Council’s Public Protection Service dealt with over 3300 housing related service requests (not all relating to landlords).

Healthy Homes Programme, through proactively targeting particular neighbourhoods of the city experiencing the greatest health inequalities and high levels of sub standard rented property, carried out over 630 housing inspections in the same period.

(i)This initiative is a Liverpool Primary Care Trust (PCT) commissioned programme addressing health inequalities. In addition the programme provides advocate services, tackles disrepair and hazards in properties. Based on a single assessment by an advocate, tenants are referred to a range of partner organisations providing everything from benefits maximisation advice, job seeking, smoking cessation and registering with GP and dental practices. Since 2009, Healthy Homes Advocates have visited 26,357 properties, completed 15,589 surveys and removed 2,917 category 1 hazards. The programme has driven £4,232,145 of investment in private rented properties through a combination of informal engagement with and enforcement against landlords.

Both teams use the Housing, Health and Safety Rating System to assess how property conditions can affect health, identifying any improvement works required to make the property safer for occupants and visitors.

During 2012 over 650 Enforcement Notices (Housing Act 2004) were served on landlords demanding entry to properties, requesting information about property’s management, or dealing with property conditions.

4.3 In the last two years Public Protection has taken 17 prosecutions against private landlords costing landlords £58,000 in fines and court costs.

4.4 In addition, when we become aware of a landlord that has a history of non-compliance we pro-actively target that landlord for portfolio action where we will discuss the issue with the landlord and gain a list of their whole portfolio for further action as necessary, providing increased protection to their tenants.

4.5 During the Capital of Culture year of celebrations in 2008; the high number of visitors and limited hotel spaces coupled with the relatively stagnant sales and rental market in the city resulted in the growth of the serviced apartment industry. These short term lets were seen as a lucrative market and City Residential (a local estate agency) estimate that approximately 3% of all residential properties within the city centre are currently serviced apartments. Whilst the vast majority of serviced apartments are located in the city centre, there are also a small number of blocks outside the city centre boundary. Although the market for serviced apartments has been growing recently there is anecdotal evidence that this may slow down due the private rental market being strong and ultimately being a better investment for property owners. The Council and its partners have monitored the serviced short let apartment provision in the city centre for some time, having concerns about their impact on neighbouring residents. Subsequently this year the Council established a policy on serviced apartments and a commitment to seeing action taken against such provision within residential apartment blocks. However the Council does uphold serviced apartment provision in exclusive blocks acknowledging that this type of provision is popular and does not negatively impact on residents. The Council works closely with Engage; a partnership of city centre resident associations; to track down serviced apartments in residential accommodation and then to jointly apply pressure on the building’s management company to take action against the leaseholder of such property.

5. Tackling Rogue Landlords and Lettings Agents

5.1. Liverpool has decided to take a more proactive approach and make a clear statement of intent to tackling poor standards in the private rented sector in Liverpool by making a “Ten Point Pledge” as follows:

5.1.1Adopting a “Liverpool Standard for private rented housing” in the city. This will include minimum standards for property condition based on the Decent Homes Standard and also good practice in the management of tenancies.

5.1.2The introduction of a “Citywide Landlord Register”. This is a voluntary basic registration scheme whereby landlords are listed, subject to their agreement, along with the addresses of the properties they let. We already have contact details for around 1,500 landlords. There will be a clear expectation that landlords will provide their details.

5.1.3Re-launch of the “Landlord Accreditation Scheme” will provide greater public access to the list of accredited landlords highlighting their “beacon” status.

5.1.4Provide “incentives for landlords”. These could include access to funding available in renewal areas and for bringing empty homes back into use.

5.1.5Development of a “Scores on the Doors” service whereby prospective tenants can enquire whether landlords are registered, accredited, licensed or a member of a recognised landlords organisation such as the National Landlords Association.

5.1.6Provision of a “confidential freephone line” where people can report unregistered or poor quality landlords. This would trigger an investigation from the enforcement team.

5.1.7Creation of dedicated web pages on the Council website or the development of a separate “website for Liverpool landlords”. This would be used to publicise the Liverpool Standard, the accreditation scheme and general news items of interest to landlords, tenants and people seeking accommodation.

5.1.8Establishment of a “Landlords Advisory Group” comprised of landlords and also lettings and managing agents.

5.1.9Formation of a “Rogue Landlords Hit Squad” to seek out and investigate poor landlords, take appropriate action and publicise successful prosecutions.

5.1.10Consult on the development of a “Citywide Selective Licensing Scheme”.

5.2 The plan will formalise the Landlord base and enable a much more informed approach is applied if standards are not being met. The implementation of the 10 point pledge has already commenced and will be in place by the end of January 2013. Formal consultation on the introduction of compulsory licensing will commence in January 2013 and in accordance with Cabinet Office guidance will last for a 12 week period. The Housing Act 2004 requires that the Council take reasonable steps to consult with all persons likely to be affected by the proposals. The following groups will be consulted:

Landlord and Landlord Associations.

Residents and Residents Associations.

Private tenants.

Advice agencies.

Registered Housing Providers.

Ward Members.

5.3 Information will be posted on the City Council’s website enabling any other interested party to comment. Other stakeholders will be consulted through a range of stakeholder group meetings to be held throughout the formal twelve week consultation.

6. Regulation of HMO

6.1 The City Council has utilised its statutory powers to deal with poor housing standards and management effectively to protect private tenants. The introduction of compulsory licensing for Houses in Multiple Occupation (HMO) has driven an improvement in standards and property management within that sector of the private rented market. The City Council will continue to use enforcement powers to address sub-standard properties or poor management practices but the City Council is determined to be pro-active in improving conditions across the private rented sector as a whole.

6.2 The Housing Act 2004 introduced three different types of licensing namely, Mandatory, Additional and Selective licensing. The first two specifically relate to HMO’s.

6.3 The City Council also maintains a public register of all licensed HMO’s; Temporary Exemption Notices; and Management Orders issued, containing prescribed information. Over 840 HMO’s are currently licensed under the scheme.

6.4 An additional licensing scheme will be introduced for smaller HMO’s comprising at least two floors with some shared amenities. The current scheme covers buildings over two floors but these proposals recognise that there are an increasing number of two storey properties being converted into shared accommodation across the city and licensing is a key tool in protecting both tenants and neighbours of these properties.

7. Licensing and Landlord Accreditation:

7.1 At present, people looking to rent privately can use Liverpool’s City wide landlord accreditation scheme—CLASS to establish whether their prospective landlord is good or bad. Accredited landlords have had to demonstrate that they have satisfactory management arrangements in place and their properties meet a defined standard. Licensing can protect residents who have suffered from neighbouring properties being bought by landlords and let indiscriminately to unsuitable tenants.

7.2 Licensing will create a minimum standard of safety and management for the private rented sector enabling tenants to be confident in their choice to rent and neighbours in the landlord’s ability to effectively manage the property. Landlords need to show they have systems in place for tenants to report repairs and defects providing tenants with some assurance that the worst defects would be dealt with.

7.3 CLASS has been operating for eight years and it is estimated there are approximately 5,500 landlords operating in Liverpool, the majority of whom are relatively small scale. There are however a number of large managing agents who manage between 1,500 and 2,000 properties each. The main purpose of the accreditation scheme is to encourage and promote better management and maintenance of privately rented homes. CLASS works in partnership with the Liverpool Student Homes Scheme which has 231 landlords and 1,553 bed spaces in traditional houses on its register. As part of the City Council’s 10 point pledge to drive up standards in the private rented sector discussed above, a voluntary citywide registration scheme was launched in September 2012. So far 341 landlords have registered providing the City with the details of 1,744 landlords operating in the City.

7.4 Despite the City Council committing significant resources to tackle poor housing in the private rented sector, 42.8% of the 42,541 private rented properties sampled in the 2010 Housing Condition Survey, fail to comply with the Government’s decent homes standard. Environmental Health has responded to 6,224 complaints relating to the condition of private rented property in the last three years.

8. Tenancy Agreements

8.1 The Council is keen to maximise the term of tenancies and to ensure that tenancy agreements are clear and unambiguous. This is being addressed through the CLASS scheme (landlord accreditation) and presentations have been provided by the landlord associations at meetings of the Private Rented Sector Forum.

8.2 The Council also has a Specimen Assured Shorthold Tenancy Agreement available on its website which uses plain English and takes account of local circumstances.

9. Homelessness

9.1 The use of private tenancies has been used increasingly by the Housing Options team to prevent homelessness and a tenancy bond scheme has been established to facilitate this.

9.2 It is proposed that the council will utilise the provision in the Localism Act to discharge its homelessness duties in appropriate circumstances where suitable private rented accommodation is available.

9.3 Illegal actions by private landlords are also identified by the Housing Options Service (HOS). The service aims to prevent homelessness within the private rented sector and would intervene in cases of private landlord harassment/illegal eviction. HOS uses various methods to resolve difficulties including:

Informing tenants and landlords of their rights and obligations;

raising awareness of landlord/tenant legislation;

addressing Housing Benefits/rent arrear problems/DHP applications;

mediation/reconciliation; and

checking of tenancy agreements and notices to quit.

10. Recommendations

10.1 For the Government to establish a compulsory registration scheme. This is a requirement for many other activities (taxis, hot food takeaways etc) but not for private landlords apart from owners of HMO’s who do have to be licensed.

10.2 For the Government to comment on our consideration of Selective Licensing. As a minimum a basic light touch landlord’s registration scheme would enable us to engage more effectively with landlords because we would know who they are.

10.3 For the Government to launch a “MOT” for all rented accommodation. Comprising of Gas (currently required), electric, EPC (currently required), and HHSRS certificate as a minimum.

January 2013

Prepared 16th July 2013