Agenda item

Proposal for a Scheme of Selective Licensing for Private Rented Houses

Meeting of Executive Board, Tuesday, 17th January, 2023 2.00 pm (Item 90.)

Report of the Portfolio Holder for Housing and Human Resources

Minutes:

Having declared a pecuniary interest in this item as owners of privately rented properties Councillors Barnard and Wynter withdrew from the meeting and did not play any part in discussions.

The Portfolio Holder for Housing and Human Resources presented a report on the outcomes of the consultation which had been completed following the Board’s resolution of 24 May 2022 in respect of a proposed Designation for Selective Licensing of privately rented houses. The following points were discussed:

a) Selective Licensing provides council with additional powers to drive up standards through inspection and enforcement activity to address specific property issues. It is proposed that a new scheme is adopted due to the success of the first scheme. It requires Secretary of State approval before it can be implemented.

b) The scheme will be used to tackle poor quality housing, antisocial behaviour and to support improvements in community safety.

c) While 62% of consultation responses were against the new scheme it was recommended for approval due to the strategic benefits it brings.

d) If approved by the Secretary of State, it is anticipated the scheme will be implemented in August 2023.

e) Selective Licensing brings additional benefits to those that may arise from the Renters Reform Bill which is awaited.

f) Areas not covered by the scheme will continue to be supported through existing Environmental Health and Community Protection services.

Resolved to

1) consider the results of the consultation and responses to the consultation comments as outlined in Appendix 3 and Appendix 4 to the report

2) Having considered the results of the consultation, approve the making of the Designation contained in Appendix 1 of the report as being subject to Selective Licensing and confirm that Board is satisfied:

· that the statutory conditions for making a Designation referred to in paragraph 2.2 and 10.1 of the report, more specifically detailed in section 2.12 to 2.18 of the Executive Board Report of 24 May 2022, have been met

· that the making of the Designation is consistent with the Council’s Housing Strategy and would form part of a coordinated approach in connection with dealing with homelessness, empty properties and anti-social behaviour

· that other courses of action available have been considered that might provide an effective method of achieving the objectives that the Designation would be intended to achieve, and

· that it considers making the Designation will significantly assist it to achieve that/those objectives.

3) agree that a submission be made to the Secretary of State for Levelling Up, Housing and Communities seeking confirmation of the Designation

4) agree the revised licence conditions in Appendix 6 to the report and the reviewed and updated Fee Policy in Appendix 7

5) delegate to the Corporate Director of Growth and City Development, in consultation with the Corporate Director of Communities, Environment and Resident Services, Section 151 Officer and Monitoring Officer and the Portfolio Holder for Housing and Human Resources the power to:

· finalise and approve the documentation to be submitted to the Secretary of State when the Designation is submitted for confirmation,

· liaise with officers and the Department for Levelling Up, Housing and Communities in relation to the confirmation of the Designation and to make any subsequent determinations that may be necessary in relation to it arising from that process

· ensure the design and operation of the renewed Selective Licensing Scheme is operated through the Council’s Customer First and Business Support Transformation Programmes to the fullest extent possible, as mandated in the Chief Executive’s instruction to senior officers dated 10th October 2022.

6) In the event of the Secretary of State confirming the Designation, delegate power to the Corporate Director of Communities, Environment and Resident Services i) to comply with the relevant statutory requirements in relation to its notification and publication and ii) to implement the Designation and licensing scheme (in consultation with the Corporate Director of Growth and City Development, the Council’s 151 Officer and Monitoring Officer)

7) To approve the use of ring-fenced reserves, as detailed in paragraphs 5.1- 5.3 and 7.2 - 7.6 of the report, for this Designation from 1st August 2023 to 31st July 2028 or upon the required commencement date as per DLUHC approval timeframe.

· Reasons for Decision

The evidence which has been collated in accordance with the DCLG guidance indicates that relevant statutory tests have been met to make the case that Selective Licensing of privately rented houses in the proposed designated area would be an appropriate tool to resolve the issues and problems identified.

A consultation on the proposed Designation has been undertaken and after full consideration of the consultation responses, the case for Selective Licensing in the proposed designated area still stands.

Nottingham’s Housing Strategy 2018-2021 ‘Quality Homes for All’ is committed to improving and maintaining good quality homes across all tenures in the city. This Strategy includes the full exploration of housing licensing schemes for private rented accommodation to drive up the standards and protect tenants across the city.

The proposal supports the delivery of objectives set out in the Strategic Council Plan 2021-2023, particularly Outcome 9 – Better Housing and key strategic aims around ASB, reduced energy use, and building quality neighbourhoods.

The Private Rented Sector (PRS) forms a key component of the total housing supply to help people meet their housing needs when faced with homelessness. For example, of 1,042 households in Nottingham whose homelessness prevention duty ended during 2021/22, 195 secured accommodation in the sector. Given the vulnerable situation a household will be facing when they are homeless, or in imminent risk of becoming homeless, it is important that the Council, when fulfilling its statutory duties in this regard, is able to refer homeless households to private sector accommodation that is safe and meets the standards that would be expected. The City’s Homelessness Prevention Strategy 2019-2024 notes that the need for PRS accommodation continues to grow and the Council and its partners must work with landlords to progress leasing/letting schemes to offer as an option. The Strategy also seeks to work with tenants and landlords to reduce evictions from the Private Rented Sector, and to utilise the PRS as a solution to homelessness.

The Homelessness Prevention Strategy recognises there are many good landlords operating in Nottingham who provide a valuable source of housing for Nottingham people. However, there are other landlords in the private rented sector who do not adhere to their responsibilities in appropriately supporting their tenants and providing a decent standard of accommodation. These landlords are putting people’s health, wellbeing and safety at risk and exposing them to increased risk of homelessness. This places further strain on other housing resources in the city, and the Council’s services that seek to help people find suitable accommodation. This ultimately places costs on the taxpayer. Licensing can act as a valuable tool in tackling problems in the tenure, and as a consequence, making a helpful contribution to tackling homelessness.

The proposals align well with the Government’s current White Paper – “A fairer private rented sector” which recognises selective licensing as a tool to address particular issues. It should be noted that the Council’s current Selective Licensing Scheme is cited in the White Paper.

· Other Options Considered

Other Options	Implications / Impact	Recommendation
To not pursue the Designation further.	· Any necessary enforcement would result in required interventions being resourced by existing Council functions · The Council would lose the proactive power of entry · Interventions would only be carried out on a reactive basis · Increased number of complaints and complaint resolution time · The number of interventions would be greatly reduced · The absence of regulation would make the market the main driver for property improvements · The Council would no longer hold the intelligence gathered on persons responsible for PRS properties or engage with them in the same way · The Council’s ability to provide assurance regarding its regulation of PRS would be limited, placing The Council in a weaker position	To reject, as evidence presented to Executive Board in May shows a clear need for the scheme.
Consideration of a smaller scheme Designation.	May not require Secretary of State confirmation depending on size. The proposed Designation gives the best opportunity to continue the improvements made by the first Designation and also allows the opportunity to improve properties in the newly identified areas which were not included previously.	To reject, as evidence in the May Report has used a minimum of 2 criteria (as opposed to 1 criteria for the current scheme) to provide the Designation area to which Selective Licensing will apply. This Designation is already smaller in geography (size) and in the estimated number of privately rented properties that will fall within the scheme compared with the 2018 Designation.
Voluntary accreditation only.	Accreditation schemes have a set of standards (or codes) relating to the management or physical condition of properties and recognise properties / landlords who achieve / exceed the requirements. The Council currently works with DASH, UNIPOL and ANUK as its accreditation providers. Before the first Selective Licensing Scheme voluntary accreditation with these accreditation providers was only circa 5%. Selective Licensing has encouraged an increase up to circa 30% with the lower accredited licence fee incentive triggering a sixfold increase in accreditation and the standards required to meet this.	To reject, the option of using voluntary schemes alone would not be expected to deliver necessary improvements. (Voluntary schemes alongside Selective Licensing are considered more effective as landlord accreditation has worked well in conjunction with licensing).
Targeted use of Interim Management Orders (IMOs) and Final Management Orders (FMOs).	The Housing Act 2004 gives local authorities powers to use Management Orders for tackling comprehensive and serious management failures. However, these are complex to implement and administer (and thus expensive) as they involve taking over the management of the property and are done on a case by case basis with individual properties. They are also reactive for dwellings where such problems are apparent and as such do not provide value for money.	To reject, this is not a preferable option for driving up standards across an area and would not provide a level of improvement in standards that Selective Licensing can deliver (IMOs and FMOs can be used in individual cases if required alongside licensing).

Other initiatives / tools combined with the use of statutory powers have been successful however Selective Licensing is one of the only proactive tools that has the power to tackle a broad range of issues in the Private Rented Sector including property conditions, ASB, crime and deprivation (see section 8 of the Proposal accompanying the May Report for the list of conditions required to make a Designation and the evidence prepared and see section 5 for detail on how these conditions have and will be addressed by Selective Licensing). Selective Licensing allows the Council to properly resource tackling these issues within the sector and be proactive about it. Being able to target and deal with properties where tenants may not realise that they are in poor condition / badly managed, or perhaps they do, but don’t know how to complain or are fearful of what might happen if they do complain. Selective Licensing provides the tools and opportunity to engage and work with landlords if they wish to improve, or work towards removing them from the market if they do not.

Supporting documents: