RLA Submission to Building Research Establishment’s Review of Licensing
HMO and Selective Licensing – Submission to Building Research Establishment’s Review of Licensing
1. The RLA believe that in the long run licensing is a dead end (as was HMO registration).
2. Licensing was largely justified on a false premise (namely the exaggerated risk of fire in three storey and above properties). In reality this is not a risk in many of the smaller shared houses which have been drawn into the mandatory licensing scheme as was demonstrated by the recent publication of the LACORS Guidance relating to fire safety.
3. The RLA proposes an exemption from mandatory HMO licensing for accredited landlords who are members of an approved accreditation scheme. Assuming the proposals involving ANUK for the approval of accreditation schemes were adopted and implemented we would then have a system of approved accreditation schemes which would give the necessary confidence to allow accredited landlords who are members of these schemes to be exempted from the licensing requirement. It would have the major advantage of taking responsible compliant landlords out of licensing enabling local authorities to concentrate their limited resources elsewhere. However, this is seen as a short term fix pending adoption of a wholly different approach to the regulation of the private rented sector.
4. The absence of a Code of Practice means that there is no proper yardstick to assist in the improvement of management standards in HMOs. The RLA drafted up such a Code but the Government refused to pursue the idea at the time.
5. We need to look at encouragement and not the big stick approach. Training would be a vital component of this approach.
6. The reality of HMO licensing is that it has scooped up swathes of student and young professional shared houses. These properties are occupied by those who by and large are least in need of protection. The real problem properties have kept under the radar and have evaded licensing.
7. The introduction of HMO licensing has been yet another example of gross Government managerial incompetence. Matters which should have been addressed centrally (e.g. standard application for model licence conditions) have been devolved to local authorities leading to a huge duplication of effort.
8. Local authorities have lacked the will and resources to properly implement licensing anyway (e.g. the large number of authorities which are not yet issuing HMO licences two years after the Scheme started!).
9. Fire safety (which was, after all, the primary justification for HMO licensing originally) has been surrounded by confusion e.g. whether or not shared houses within the scope of the Fire Safety Order. Why are there two enforcing authorities? Why does the Fire Safety Order Regime only apply to parts of certain types of HMOs?
10. Licensing was about improving management. As always, it has instead become an obsession with regard to physical standards e.g. the changes relating to the original requirement for wash hand basins in every bedroom. If it was about management why has only Leeds City Council and one other local authority adopted mandatory training (encouraged by local landlords). If it is about management why do we not have a proper management standard (i.e. a Code of Practice). The RLA’s firm view is that we should concentrate on people; not places to improve standards.
11. The cost of licensing is of very considerable concern. It has, in effect, been a tax on the private rented sector to provide an inefficient, ineffective, bureaucracy which still has limited resources.
12. There is strong anecdotal evidence that a number of members are deliberately reducing numbers to which properties are let to keep them below the licensing threshold. There is also evidence that landlords are withdrawing from the market. This is leading to a loss of accommodation.
13. The net result is that only the responsible compliant landlord has joined the licensing club. As always the irresponsible landlord has avoided the system. The good compliant landlord is then forced to ratchet up his/her standards whilst the bad landlord ignores the system. Licensing was meant to be about dealing with worst first. What a surprise this has not happened. There is a negative effect of licensing.
14. As regards selective licensing the RLA is very concerned about the negative impact on areas where it is imposed, particularly the reluctance of mortgage lenders to provide finance in these areas both for landlords/owners/occupiers, particularly during the current “credit crunch”. In certain areas, notably Manchester, there has been an attempt to apply selective licensing across the board. This has not been done as part of any planned regeneration or improvement to the relevant areas. Instead, it is a Council inspired application of unnecessary bureaucracy coupled with a further stealth tax on landlords. It is an ill conceived notion to officially designate these areas as, in effect, “sink” areas. Who wants to be involved in an area where they are told that it is either an area of low demand or is beset with problems of anti social behaviour. Hardly a moral raiser! The RLA would support targeted intervention in small problem areas but is strongly opposed to the way in which certain authorities have used their selective licensing powers.
15. The RLA considers that a wholly different approach to the regulation of the private rented sector as a whole is required involving self regulation. This would then supersede licensing and make it unnecessary. By and large this would relieve local authorities of much of their enforcement role leaving them only to deal with those cases not falling within the self regulatory regime. Compliant landlords would be taken out of the statutory local authority enforcement regime.
16. The Rugg review gives an opportunity to re-assess how the private rented sector is to be “policed” in the future.