Agenda item

Proposal to Consult on a Draft Designation of Additional HMO Licensing for Houses in Multiple Occupation from 2024 to 2028

Report of the Portfolio Holder for Housing and Human Resources


Having declared an 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.


In the absence of the Portfolio Holder for Housing and Human Resources the Leader of the Council introduced the report on the proposal to consult on a draft designation of additional HMO licensing. The following points were discussed:

a)  The report proposed that consultation on the proposed new scheme commences.

b)  If introduced, the aim of a scheme would be to improve the quality of private rented accommodation alongside other benefits including in relation to waste management, safeguarding, environment and community safety.


Resolved to:


1)  Support the case for a Designation of Additional HMO Licensing to be tested through a process of public consultation.


2)  Agree the draft Designation contained in Appendix 1 to the report be approved for consultation in accordance with the Department for Communities and Local Government (DCLG) guidance document ‘Approval steps for additional and selective licensing Designations in England’ for a period of at least 10 weeks


3)  Agree to review the outcome(s) of the consultation at a later meeting and consider whether the Designation should be made.


·  Reasons for Decisions

The proposed Designation has been identified because evidence gathered in accordance with DCLG guidance supports the case that relevant statutory tests have been met (sections 3 and 4 of the Proposal) and that Additional HMO Licensing of houses in multiple occupation in the area would be an appropriate tool available to ensure compliance. The legislation requires that there must be a public consultation of at least ten weeks before a local housing authority can make a Designation which will benefit from the Secretary of State’s general approval.


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. As part of this, the Strategy committed to licensing schemes for private rented accommodation and to “Use advice, regulation, enforcement and licensing to improve private rented sector homes, protect and enhance the lives of tenants and improve neighbourhoods”. The aspiration of the Strategy was for a well-regulated, high performing private rented sector (PRS), and delivering the Additional HMO Licensing scheme was a key objective of the Strategy and seen as an important part of the toolkit for achieving this aspiration.


The proposed designation will play a significant role in delivering the priorities set out in the current Strategic Council Plan 2021-2023, particularly Outcome 9 – Better Housing and key strategic aims around antisocial behaviour (ASB) and building quality neighbourhoods as well as enabling reduced energy use in line with our Carbon Neutral 2028 Strategy.


The Private Rented Sector has also increasingly become part of the housing options necessary 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 Private Rented Sector (PRS) accommodation. 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. The Strategy sees the council’s approach to licensing as a valuable tool in tackling problems in the sector, and as a consequence, making a helpful contribution to tackling homelessness.


The council works to reduce antisocial behaviour (ASB) across the city. Additional HMO Licensing is an effective tool that can be utilised to ensure landlords manage their properties and tenants in an appropriate manner. A Designation of Additional HMO Licensing will significantly assist in achieving improved property conditions and standards as well as reducing ASB, as it allows for landlords who are failing to appropriately manage their HMO and to receive support and assistance from the Additional HMO team in order to do this, therefore protecting tenants and the wider community from their negative impact. Further, the administrative practicalities of the scheme (e.g. having access to intelligence on landlords) allows better and more timely communication and for issues to be resolved more readily, maintaining progress and improvements over the longer term.


The making of the Designation is felt to be consistent with the above strategies and to form part of a coordinated approach in connection with dealing with homelessness and antisocial behaviour. Additional HMO Licensing will play a part in bringing empty properties back into use through the detection of landlords responsible and work with other council services to ensure decent, well-managed accommodation targeting those empty properties sooner which are detrimental to neighbourhood amenity.


The proposals align well with the government’s current White Paper – “A fairer private rented sector” (The White Paper) which recognises 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. The White Paper clearly seeks to improve standards in the private rented sector, and understandably has sections on increased enforcement powers with a focus on rogue landlords. It sets out plans to increase local authority enforcement and investigatory powers. The government sees Additional HMO Licensing as an important part of the powers available to local authorities, stating that “it gives the local housing authority powers to inspect properties and force landlords to address specific property issues.” The council believes that the proposed Additional HMO Licensing scheme will play a critical role in helping deliver the government’s ambitions as set out in this White Paper.


The council wants to ensure that privately rented homes in the city continue to be well managed, well maintained, are of high quality and provide a home of choice for Nottingham’s citizens. The primary aim of the additional HMO licensing Designation and scheme is to address problems caused by the ineffective management of smaller HMO thereby improving the quality, safety and management of smaller HMO in the private rented sector through regulation; utilising a multifaceted approach of encouraging positive working relationships with landlords, empowering tenants’ rights, managing unsatisfactory behaviours and practice through a bespoke set of licence conditions. The additional HMO licensing scheme is therefore entirely consistent with the overall aims of the Housing Strategy, aspiring to promote quality and sustainable, secure homes in the private rented sector and will significantly assist the council to deal with problems experienced by occupiers or members of the public arising from the ineffective management of the HMO to be covered by the Designation.


·  Other Options Considered

To not pursue a Designation further:

o  Any necessary enforcement would result in required interventions being resourced by existing council functions The council would lose the proactive power of entry

o  Interventions would only be carried out on a reactive basis • Increased number of complaints and complaint resolution time

o  The number of interventions would be greatly reduced

o  The absence of additional regulation would leave the market the main driver for property improvements

o  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

o  Ten years has not been sufficient to embed continued compliance with satisfactory standards in the absence of proactive regulation. • To date partial Designations have resulted in displacement of HMOs to non-licensed areas. This combined with growth in the sector has led to an increasing number of HMOs which have never been subject to any oversight

o  Ceasing to have an Additional HMO Licensing Designation would mean a return to reactive regulation. This would jeopardise citizens access to quality homes and their access to recourse regarding the negative impact of sub-standard HMOs in their neighbourhoods.

Consideration of a smaller scheme Designation:

o  A smaller Designation would limit opportunity to continue the improvements made by the first two Designations

o  A smaller Designation would increase the number of properties continuing to cause an issue due to unsatisfactory management and displacement of HMOs and associated issues to outside the regulated area.

o  A smaller Designation of Additional HMO Licensing would mean inconsistency with Mandatory Licensing which is impractical when considering they are subject to the same safety and amenity regulations in law

o  A smaller Designation would continue to allow lack of understanding as to the geography of the Designation to be a factor in non- compliance via reduced take up of HMO licences

Voluntary accreditation only:

o  Eliminates the council’s right of proactive entry to Additional HMO properties

o  Accreditation schemes have a set of standards (or codes) relating to the management or physical condition of properties and recognise landlords who achieve these requirements across their portfolios

o  The council currently works with DASH, UNIPOL and ANUK as its accreditation providers. Voluntary accreditation with the Nottingham Standard (DASH and UNIPOL) has seen an increase in membership with the lower fee incentive that also delivers a better outcome in this area.

Targeted use of Interim Management Orders (IMOs) and Final Management Orders (FMOs).

o  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

o  They are also reactive for dwellings where such problems are apparent and as such do not provide value for money compared to a proactive approach which prevents or addresses problems sooner and limits citizens exposure to poor standards

Direction under Article 4 of the Town and Country Planning (General Permitted Development) (England) Order 2015

o  Nottingham already has a citywide Article 4 Direction meaning planning permission is required to convert a family home (C3) to a HMO (C4), and Planning and HMO licensing sections work together to locate HMOs that are evading one, other or both regulations.

o  Article 4 however only regulates the control of development for planning purposes by removing permitted development rights thereby potentially restricting the number of new HMOs being created by change of use, it does not tackle conditions or management issues in HMOs, existing or new.


Supporting documents: