Agenda item

The Strategic Director City Development & Neighbourhood Services, Director of Housing, and Director of Neighbourhood and Environmental Services submits a report to the Overview Select Committee, the purpose of which is to brief Members on Licensing in the Private Rented Sector and share the key considerations with respect to the Council’s existing Mandatory Private Rented Sector Licensing scheme, and the plans to potentially introduce a Discretionary Licensing Scheme in the City (Additional Licensing and/or Selective Licensing).

The views of the Overview Select Committee are sought on the proposals including suggested next steps.

The Strategic Director (City Development & Neighbourhood Services, Capital Programmes), Director of Housing and Director of Neighbourhood and Environmental Services submitted a report to the Overview Select Committee, the purpose of which was to brief Members on Licensing in the Private Rented Sector and shared the key considerations with respect to the Council’s existing Mandatory Private Rental Sector Licensing scheme, and the plans to potentially introduce a Discretionary Licensing Scheme in the City (Additional Licensing and/or Selective Licensing). The views of the Committee were sought on the proposals including suggesting next steps.

Councillor Cutkelvin, Assistant City Mayor for Education and Housing, introduced the report, noting the importance of working with the PRS to get the right standards for residents. It was reported informal consultation was undertaken in 2019 on selective licensing, which led to a Labour Manifesto pledge to introduce more licensing in the PRS in the city. Whilst undertaking that work it had become apparent that there needed to be a Strategy for the sector to drive up standards, with steps on how the authority could do this.

The Assistant City Mayor noted the report included links to the MHCLG website which well documented the positive impact that discretionary licensing could have on the sector. In particular, a proactive inspection process increased meaningful dialogue with landlords, and immediately improved safety standards. Also noted was the contribution that discretionary licensing made to economic resilience in the community by using licensing along with existing enforcement powers.

The Assistant City Mayor reported that in doing the work, it was recognised that it would not be a “fix” for all problems faced within the private rented sector. The authority would have to choose what the key problems were and where its focus should be in the coming months and years, to raise standards in the sector and benefit vulnerable tenants.

The Director of Neighbourhood and Environmental Services delivered a presentation which summarised the reports contents as an overview for the Committee and is attached to the minutes for information. Points noted during its delivery were:

·         The ambition for the Council was to ensure the PRS provided good homes and were places of safety for the most vulnerable.

·         PRS accommodation in Leicester was at 35%. The National average was 19%. A large portion of the wards had a percentage of PRS properties, which predicted 49,501 PRS stock.

·         A Housing Conditions Report stated there were 9,649 HMOs in the city.

·         The percentage of private rented stock was mapped and showed predominance in Fosse, Westcotes and Castle.

·         Also, HMOs showed predominance in Westcotes, Fosse, Castle and Stoneygate.

·         A map of the city showing concentrations of complaints and issues relating to properties in the PRS such as poor housing conditions, challenges around safety, damp and electrical issues. Other issues included anti-social behaviour, which showed high concentrations of complaints in Westcotes, Fosse, Braunstone Park and Rowley Fields and Stoneygate.

·         Three years of case data from 2017 to 2020 was analysed for complaints and issues relating to housing conditions and anti-social behaviour. 17% of complaints came from HMOs, 10.8% from PRS and below 10% for non-HMOs.

·         Noise complaints, housing conditions, public health, for example, pests, and fly tipping complaints were highest amongst HMOs.

·         Various parts of the Housing Act 2004 dealt with licensing: Part 2 with mandatory licensing and also additional licensing, about smaller HMOs; Part 3 Selective Licensing. With a licence there were prescribed conditions, such as, gas safety certificates, installation of smoke alarms, and so on.

·         Supplementary conditions could be added pertinent to the locality, for example, adequate security. Imposed conditions had to be relevant.

·         A licence holder had to be a fit and proper person.

·         There were currently 1,027 mandatory licences in the city for properties with more than five tenants with shared facilities, with two or more parties from separate households, and the number was seen as comparable with other cities, namely Bradford (254), Derby City (524), Hounslow (1,130), Coventry (comparative), Luton (435), Lewisham (827).

·         Additional licensing and small HMOs definition was given as three or more unrelated tenants that shared facilities such as kitchens and bathrooms to have a licence. It was noted an additional licensing scheme did not require Secretary of State approval.

·         For additional licensing it needed to be demonstrated that a significant proportion of HMOs were being badly managed, for example, poor property conditions, issues to do with anti-social behaviour, and so on.

·         The authority also had to demonstrate it had followed other courses of action, which was why it was important to have a PRS Strategy which had been presented earlier to the meeting.

·         Selective licensing covered all tenures. There needed to be a sound evidence base, and there were some exception to be considered, for example, holiday lets, university student premises.

·         To introduce selective licensing without Secretary of State approval, the area identified must only form less than 20% of the City’s PRS and/or geographical area. As before the authority should consider other courses of action available to them before making a designation which reinforced the need for a PRS Strategy and must significantly assist in achieving objectives, such as poor property conditions, migration, deprivation and crime.

·         Benefits include landlords being identifiable on the public register, being able to deal with rogue landlords and poor standards.

·         Risks include the need to have a strong business case or the authority could be subject to a potential judicial review.

·         Additional Licensing dealt with the smaller HMOs, and could be applied city-wide to create a level playing field for all areas and prevents certain areas of the city being labelled as less desirable.

·         Officers did not believe that data provided enough evidence to have a city-wide selective licensing scheme, therefore remaining under 20% seemed appropriate.

·         Points of key learning for the authority included information from MHCLG, who had looked at responses from 273 local authorities in a review. Information was also received from the Chartered Institute of Environmental Health and the Chartered Institute of Housing Report “A Licence to Rent” that covered 27 schemes, and officers had undertaken their own research. The overall conclusion was that there was no “quick win” solution, and that a scheme when introduced, would need to be part of a package of targeted programmes of work to deal with the issues identified.

·         Key learning from other local authorities included the need for a strong business case, good communication with the sector, and a streamlined application process.

·         Potential options included but were not limited to:

a)    Targeted selective licensing (Westcotes and Fosse) – this would not exceed 20% of the City’s PRS and/or geographical area.

b)    City-wide additional licensing scheme.

c)    Targeted additional licensing scheme (focussing on Westcotes, Fosse, Braunstone Park & Rowley Fields and Stoneygate – all highest complaint wards).

·         Fees would be used to administer PRS licensing schemes, and a profit could not be made.

·         In a number of areas across the country the fee was around £1,000 for a 5-year licence. The fee would form part of consultation, which would be for 12 weeks commencing the end of November 2021, and would also cover areas outside of the city as it was recognised that some landlords lived away from the city.

·         Feedback was requested from the OSC and other Members as representatives of the community on the scheme shared during the presentation, and a request was made for feedback from Members on the design of the formal consultation.

·         Following consultation, responses would be reviewed for quantitative and qualitative data in order to ensure that any scheme put forward would be supported by evidence, and would not be subject to judicial review. The final business case would then be presented to Full Council.

Members were then given the opportunity to make comments and ask questions:

·         It was asked if it was known how many rogue landlords were believed to be in the city, as some wards did not receive many complaints about PRS landlords.

ACTION: An officer to provide a response.

·         Under climate emergency implications in the report it was reported that housing was responsible for 33% of carbon emission in Leicester. It was asked why Leicester was more than double the national average at 15%.

·         ACTION: An officer to provide a response.

·         It was observed that the number of complaints from residents might be due to the number of HMOs being allowed to open in the city centre, many in cramped accommodation without decent sound proofing and that planning policy needed to be changed.

·         It was asked what proportion of the 35% PRS dwellings were rented out to students.

·         ACTION: An officer to provide a response.

·         In identifying that Westcotes and Fosse wards were hotspots and taking on board the 20% limit for Selective Licensing (prior to needing Secretary of State approval), it was asked what percentage of properties would there be and how close would the scheme be taken to the 20% limit. It was reported that it would be about 4% (2,000 properties) and 8,000 properties would edge towards 20%, but not so close that it would require Secretary of State approval. It would also be dependent on areas chosen.

Members said it was important to get the consultation moving and recommended the Committee steer Fosse and Westcotes to be chosen for a Selective Licensing scheme in consultation with Ward Councillors and other wards where Councillors had identified issues. In terms of Additional Licensing, identifying the number of landlords was difficult, but easily identifiable were areas with a number of complaints, some of which were in affluent areas of a high student population. It was believed that representatives from student unions were keen to see a licensing scheme in those areas and it was asked that officers engage with student unions.

Members also suggested that alongside the proposed Fosse and Westcotes Wards priority Selective Licensing Scheme; with the opportunity of including other problem areas into the scheme, a conversation be had with the student unions about the possibility of bringing in an Additional Licensing Scheme alongside.

The Assistant City Mayor noted the Planning Policy was an important part of the Strategy going forward with the PRS along with other policies in the Council, such as, Enforcement Policy, and Crime and Anti-Social Behaviour Policy. It was noted it took many approaches to be brought together to solve problems.

The Assistant City Mayor informed the Chair the scheme would be worked up to just under 20% of PRS in the Selected Licensing Scheme . Ward Councillors would then be approached to garner their views for such schemes, and provided with information on the benefits that could be gained with Selective Licensing.

It was not known how many rogue landlords operated in the city, but it was important to note it was not just about rogue landlords, but about poor standards. Not all landlords were rogue because they had ill intent, but just needed educating and needed support to raise their standards. It was further noted there were rogue landlords in every area of the city.

The Chair welcomed the report and supported its move towards consultation. He asked that Ward Councillors be consulted on its design.

Officers were asked to provide responses to questions raised.

AGREED:

That:

1.    The report be noted and officers note the comments raised by Members.

2.    The proposed Fosse and Westcotes Wards be a priority for a Selective Licensing Scheme in consultation with Ward Councillors, with the opportunity of including other problem areas into the scheme.

3.    Officers engage with Student Unions to consider an Additional Licensing Scheme to run alongside the proposed Selective Licensing Scheme.

4.    Officers respond to the actions and unanswered questions raised.