Review of HMO and selective licensing

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Review of HMO and selective licensing

• Maggie Davidson
• BRE Housing Group

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Overall structure of session

• I am going to briefly outline work so far
• Aims and methods
• Findings from the baseline study in 2006
• Key questions and issues we are looking at in the
  evaluation
• You to discuss
• Your experiences of licensing and ideas for
  changes and improvements
• Any other important issues or questions we need
  to consider in our evaluation

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Evaluation of HMO and selective licensing -
timetable

• Commissioned to do the research in October 2005
• Work falls into 2 phases
• Establish baseline position before licensing
  (April 2006)
• Evaluation of impact of licensing (summer 2008)

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Establish Baseline aims

• To identify a baseline position before licensing
  and give the Department early indications of any
  particular problems experienced by Local
  Authorities and other stakeholders
• HMOs
• Number and type of HMOs
• Types of tenants and landlords
• Standards of management
• Property condition
• Other schemes in operation
• Key issues for tenants and landlords
• Areas where selective licensing is being
  considered
• Number and type of properties
• Nature and severity of problems in these areas
• Other initiatives and schemes that have been
  tried/are in operation
• Working with other departments and organisations
• Key issues for tenants, landlords and other
  residents

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The 3 components of the baseline research

• Review of existing data sources about HMOs
• Survey of all local authorities
• Case studies in 12 local authority areas.
  Interviews and focus groups with
• Local authority staff who will be implementing
  licensing
• Local authority strategic staff
• Landlords
• Tenants
• Police and ASB officers (Selective licensing
  only)
• Other residents in the area (Selective licensing
  only)

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Baseline findings Private rented sector
generally

• Trends over time
• Number of private rented homes in England has
  increased from 1.8m in 1996 to 2.3 m in 2004.
• Large local increases have created transient and
  less sustainable communities in some areas.
• Type of tenants changing
• The position in 2006
• High demand for private rented accommodation
  lack of supply (60 of LAs) and problems of
  affordability (50 of LAs)
• Affordability to buy is the biggest problem for
  private sector housing across most parts of
  England increase in private renting partly to
  blame
• Buy to let has increased the number of small
  investors who often have little idea what being a
  landlord is about.

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Changes in private renting
Traditional private renters
Can no longer afford to buy
Unable to Access Social housing
Economic migrants
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Baseline findings definition for mandatory
licensing

• Most LAs, tenants and residents were disappointed
  that mandatory licensing was restricted to HMOs
  with 3 or more storeys and 5 or more people in 2
  or more households
• It is clear and apparent that the worst, most
  dangerous, the most unsanitary housing or
  insanitary housing is the tiny terraced house.
  Big is not necessarily bad (LA implementation
  officer)
• One in 6 LAs surveyed intend to apply for
  additional HMO licensing
• Complex definition and 3 types of licensing AND
  different HMO definition for planning purposes
  had caused confusion

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Case study examples Fire safety in 2 storey HMOs
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Baseline findings enforcement, fees and
procedures

• Variety of approaches to enforcement in the past
  culture change needed in some LAs
• Most are granting a license on the basis of the
  application and their own prior knowledge and
  inspecting later
• In all areas there is a shortage of building
  contractors across most trades
• Fees for licensing are highly variable
• Major resources are needed to find and deal with
  those who do not come forward to apply for
  licenses.

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Baseline findings safeguarding tenants

• Key issues for tenants are
• Affordability
• Condition of property
• Supply and choice
• Overcrowding
• Getting repairs done
• Harassment and Intimidation
• Security 6 months shorthold
• Vulnerable households are generally found in HMOs
  and properties with the worst conditions and
  standards of management
• Advice and support services for tenants already
  overstretched
• Concerns that licensing might push up costs and
  reduce supply

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Baseline findings - landlord information and
support

• Variations in the number, type and geographical
  spread of properties and amount of
  experience/knowledge.
• Including larger shared houses under mandatory
  HMO licensing will mean officers will be dealing
  with a higher proportion of small, often
  inexperienced investors
• Lack of referencing
• Lack of tenancy agreements
• Failure to enforce tenancy agreements
• Too much or too little contact with tenants
• Biggest problems with small investors from
  outside the area
• Licensing can only bring about significant
  improvements in standards of property and
  management if landlords are given the information
  and support that they need

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Evaluation phase summer 2008

• Work just starting
• Re-survey of local authorities
• Case studies in the same 12 areas plus one
  additional authority that has a selective
  licensing scheme
• How is the process working out in practise?
• What impact is it having ?
• Other linked policy issues

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Evaluating the process

• Key issues to be explored include
• How far are authorities tracking down and
  enforcing on landlords who dont apply?
• What arrangements are in place for taking over
  management (IMOs, EDMOs) are these working?
• Perceived fairness of the system is it tackling
  the worst and the most unsafe?
• The need for additional and selective licensing
  schemes
• What is the right balance between
  incentives/support for landlords and sanctions?
• How are legal sanctions being applied?

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Evaluating the impact

• This includes how licensing has affected
• Property conditions and safety
• Standards of management
• Supply and choice of accommodation especially
  of HMOs
• Affordability
• Landlords willingness to invest and viability of
  businesses
• Anti-social behaviour both by, and towards,
  tenants

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Other linked policies and issues

• Tenancy Deposit Scheme
• Local Housing Allowance
• Use of private rented sector for vulnerable
  people and leasing to social landlords
• Overcrowding
• Migrant workers

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Over to you

• How is licensing working for you?
• Your ideas for changes and improvements
• Any other important issues or questions we need
  to consider in our evaluation?

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Contact details

• Maggie Davidson
• Housing Centre - Building 17
• BRE
• Garston
• Watford
• Herts WD25 9XX
• Tel [phone]
• E-mail davidsonm_at_bre.co.uk