Agenda item

Report of the Portfolio Holder for Housing

Councillors Cheryl Barnard and Audra Wynter left the room for the duration of this item as they had both declared interests in the matter as owners of privately rented property.

Councillor Jay Hayes, Portfolio Holder for Housing, presented the report which informed Executive Board of the outcomes of the consultation which has been completed following the Board’s resolution of 21 February 2023 in respect of a proposed Designation for Additional Houses in Multiple Occupation (HMO) Licensing to commence 1 January 2024. Following consultation, the report proposed that a Designation covering the whole city is made.

Resolved to:

(1)  consider the results of the consultation and responses to the consultation comments as outlined in Appendix 3 - Consultation Report and Appendix 4 - Consultation Thematic Responses, to the report.

(2)  approve the making of the Designation contained in Appendix 1 of the report as being subject to Additional HMO Licensing for five years from 1 January 2024 having considered the results of the consultation

(3)  to confirm that Board is satisfied:

a)  that the statutory conditions for making a Designation referred to in paragraph 1.1 of the report (and detailed in section 3.2 to 4.9 of the Executive Board Report of 21 February 2023 (The February Report) have been met

b)  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, antisocial behaviour (as detailed in paragraphs 1.3- 1.9 of the February Report)

c)  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, (as detailed in paragraphs 5.1 - 5.5 of the February Report) and

d)  that it considers making the Designation will significantly assist it to achieve that/those objectives (as detailed in paragraphs 5.6 – 6.2 of the February Report)

(4)  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 the power to:

a)  comply with the relevant statutory requirements in relation to its notification and publication and

b)  implement the Designation and licensing scheme

c)  ensure the design and operation of the Additional HMO Licensing Scheme is operated through the Council’s Customer Services Transformation Programme to the fullest extent possible, as mandated in the Chief Executive’s instruction to senior officers dated 10th October 2022.

(5)  note the continued use of existing ring-fenced reserves as detailed in paragraphs 8.3 and 8.4 of the February Report and Section 7 of the report, for the current designation and licences which remain in force beyond its end (31 December 2023) and for the new Designation from 1 January 2024 and those licences issued under it.

(6)  To note the continuation of the non-recoverable Housing Health and Safety Rating HHSRS work required under the Housing Act 2004 which cannot be covered by the Fee as detailed in section 7.2 of the report.

Reasons for decisions:

·  The evidence which has been collated indicates that the relevant statutory tests in Section 56 and 57 of the Housing Act 2004 (the Act) have been met and that an Additional Licensing Designation for the entire City district will significantly assist the Council to deal with the issues and problems identified (sections 3-6 of the February Report).

·  A consultation on the proposed Designation has been undertaken and after full consideration of the consultation responses, (a significant number of which have shown overall support for the proposal,) the case for an Additional Licensing Designation covering the entire City district still stands.

·  Nottingham’s Housing Strategy 2018-2021 ‘Quality Homes for All’ was committed to improving and maintaining good quality homes across all tenures in the city. The new draft Housing Strategy ‘Homes Fit for the Future’ currently being developed will continue to support these aims bolstered by the regulation of the private rented sector which the Additional HMO Licensing Scheme would provide.

·  The proposal supports the aims of Student Living Strategy, which states: “Diversify and innovate to improve the quality, safety, affordability and location of available accommodation for all students across the City. Actively promote a growth in affordable alternative accommodation options to encourage a better balance of student housing choice across the City” and “Nottingham City Council uses licensing schemes to ensure people in rented accommodation have safe,  good-quality places to live”.

·  The proposal supports the delivery of objectives set out in the Strategic Council Plan 2023 - 2027, particularly the outcome Better Housing and key strategic aims around tackling ASB, reduced energy use, and building quality neighbourhoods.

·  The Private Rented Sector forms a key component of the total housing supply to help people meet their housing needs when faced with homelessness. For example, of households in Nottingham whose homelessness prevention duty ended during the first three quarters of 2022/23, 344 secured accommodation in the sector. Given the vulnerable situation a person 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 people 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 that the Council and its partners must work with landlords to progress leasing/letting schemes to offer as an option, such as NPRAS. 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 local 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 identifying and tackling problems earlier and as a consequence, making a helpful contribution to tackling homelessness.

·  The proposals aligned well with the Government’s White Paper – “A fairer private rented sector” which recognised Additional HMO Licensing as a tool to address particular issues such as exploitation. It should be noted that the Council’s current Selective Licensing Scheme is cited in the White Paper. The proposals continue to align with the Renters (Reform) Bill introduced to Parliament 17 May 2023 which continues to support further regulation of the private rented sector including a decent homes standard, yet to be fully defined. Section 58(1) Enforcement by local housing authorities: general duty: It is the duty of every local housing authority to enforce the landlord legislation in its area.

Other options considered:

·  To not pursue a 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 following complaints. Increased number of complaints and complaint resolution time increasing. The number of interventions and outcomes would be greatly reduced. The absence of additional regulation would leave the market the main driver for property improvements. The council would no longer hold the intelligence gathered on persons responsible for HMO properties or engage with them in the same way. The council’s ability to provide assurance regarding its regulation of HMOs would be limited, placing the council in a weaker position. Continued compliance with satisfactory standards would be limited 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 or regulation. Ceasing to have an Additional HMO Licensing Designation would mean a return to reactive regulation. This would jeopardise citizens’ access to quality safe homes. Citizens’ access to recourse regarding the negative impact of sub-standard HMOs in their neighbourhoods would decrease.

·  Consideration of a smaller scheme Designation. A smaller Designation would limit opportunity to continue the improvements made by the first two Designations. 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. 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. 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 HMO issues and protect citizens.

·  Voluntary accreditation only. Eliminates the council’s right of proactive entry to Additional HMO properties. 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. 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). 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 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. 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. 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.

·  Other initiatives / tools combined with the use of statutory powers have been successful however Additional HMO Licensing is one of the only proactive tools that  has the power to tackle a broad range of issues in Private Rented Sector HMOs including property conditions, property amenities, ASB, crime and deprivation (see section 3.2 of The February Report for the list of conditions required to make a Designation, section 4 for the evidence prepared and section 5 for detail on how these conditions have and will be addressed by Additional HMO Licensing). Additional HMO Licensing allows the Council to properly resource tackling these issues within the sector and to be proactive about it. Properties that tenants may not realise are in poor condition / without adequate amenities / badly managed, and properties where the tenants know there is an issue but don’t know how to complain or are fearful of what might happen if they do complain will be tackled through licensing. Additional HMO 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 to make way for responsible landlords.

·  The benefits of Additional HMO Licensing are further defined below:

o  Property improvement – clear standards – the Council’s three tier compliance approach has created a process for landlords to meet required standards and provides the resource to make sure they do. A clear set of standards and expectations for licence holders, with penalties in place for failing to comply with these standards, has delivered direct improvements for citizens.

o  Landlord and agent engagement – Through the scheme the Council is able to engage positively and regularly with landlords, agents and other partners via a variety of means and can disseminate a range of information and updates swiftly and efficiently, without licensing this would not be achievable.

o  Efficient intervention – Licensing allows prompt and efficient investigation of complaints and concerns as those responsible for a property can be traced and contacted quickly and easily when concerns are raised. This provides value for money to the authority and is particularly important in situations where there are immediate safety concerns that require investigation and action.