Houses in Multiple Occupation: Combined Planning Applications

Wednesday 21st March 2018 Westminster Hall

[David Hanson in the Chair]

15:59

[Stephen Pound (Ealing North) (Lab)]

I beg to move,

That this House has considered houses in multiple occupation and combined planning applications.

I am sure that I will not be the last person to say what a pleasure and delight it is to serve under your chairmanship, Mr Hanson. I apologise to Westminster Hall for bringing a planning matter before it. I realise that many of us who have served in local government dread planning issues: there seems to be no good news; we seem always to be trying to balance the perfectly reasonable requirements of the developers with the protection of our constituents. However, in relation to the concern about the cumulative impact of applications for houses in multiple occupation, I am entirely confident that this is a matter of such significance that it should be brought to the attention of the House, for two particular reasons. One is that a consultation is currently under way on the national planning policy framework—I was delighted to see on the Government website that the consultation period ends at 11.45 pm on 10 May 2018. I profoundly hope that the Minister will be able to carry some of the comments made in this debate forward into that consultation process.

I realise that the Government issued in July last year a briefing paper entitled “Houses in Multiple Occupation (HMOs) England and Wales”, and the Welsh Government produced an extremely good document in May 2015. However, those documents refer to houses in multiple occupation from the point of view of structure, safety and planning enforcement. I am here because of a group of residents in my constituency, in Perivale—a part of the world that many people will breeze by effortlessly as they glide along Western Avenue, along the A40. They probably do not even know it is there, but it matters to us and to the people of Perivale.

My constituents, in Ribchester Avenue and Wyresdale Crescent, suddenly discovered a couple of months ago that a group of linked companies—some of them seem to be based in two continents other than our own—are buying up properties in those quiet suburban streets. Just to put you in the picture, Mr Hanson, they are 1930s buildings—the typical stucco-fronted 1930s suburban buildings that are so close to my heart. They are semi-detached, by and large. Suddenly they were being bought up—in some cases with cash—and converted into houses in multiple occupation.

Under present planning law, houses in multiple occupation are classified as class C4 if there are between three and six unrelated individuals living there. The Town and Country Planning (Use Classes) Order 1987 is pretty clear on the subject, and I do not argue with it, but what the legislation does not do is consider the cumulative impact of a large number of these developments springing up on the same street. The Minister will doubtless refer to article 4 directions. I can come on to article 4 directions in a moment and show why that is an utter waste of time—it is a mere sop. It is a total and utter irrelevance when it comes to addressing the issue because—

[John Howell (Henley) (Con)]

I just wonder what the hon. Gentleman’s response will be to the NPPF consultation, in view of what he has said about houses in multiple occupation. What will he propose that we change, and how would he like to see that turn out?

[Stephen Pound]

May I implore the hon. Gentleman to hold his patience for a moment? If he does, he will hear exactly what I propose. I propose entirely new legislation—an amendment to article 4 directions. I know that the Minister will seize it and rush from this building with it clutched in her hand to change the law immediately, because she is on the side of the angels on this issue.

One of my constituents found that the house next door—the semi-detached property—had been bought by a series of linked companies, and they proceeded to convert it into an HMO. I have to say that the place burnt down during the works, which is unfortunate but it has happened. There was no party wall agreement, which is extremely unfortunate. More sinisterly, when my constituent went to see the planning officer, she discovered, as did I, that every single HMO application in that tight little suburban backwater is considered individually. There is no consideration under planning law of the cumulative impact—what I would call the saturation—in these cases.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

My hon. Friend could be describing a situation far from Ealing, on Birches Head Road in Stoke-on-Trent. The frustrating thing with all this is that they are considered as individual applications. Does he agree that when companies make it known at the outset that they intend to buy up one, two, three, four or even five properties in small residential areas, that ought to be taken into consideration?

[Stephen Pound]

I have never knowingly disagreed with my hon. Friend ever since I took part in his by-election campaign, which was a success—that probably had nothing to do with my involvement. I absolutely agree with him. Let us get one thing straight: the Mayor of London and most strategic planning authorities recognise that there is a place and a role for HMOs, and London councils are quite keen on the idea. There is a recognition that HMOs can provide low-cost housing for people, particularly as starter homes. I have no problem with that. The issue is the fact that there is no lateral linkage. At the very least, the law should require companies that are linked—circuitously or laterally—to declare that they are the same company, and we should consider the cumulative impact of applications.

Mr Hanson, if you were building a block that would accommodate 40 or 50 people, you would have to go through an entirely different planning regime. There would have to be section 106 provision, a community infrastructure levy, an impact assessment and consideration of sewerage, light, water, education, health—all the surrounding issues—and rightly so, because they would have an impact on the local community. You would have to look at the local school provision and health provision. But with multiple HMOs that is not the case. They can spring up like toadstools after a spring rain. They can come up all over Perivale and there is no consideration of what will happen to Selborne Primary School, Perivale Primary School or St John Fisher Primary School. There is no consideration of what will happen to the Hillview surgery, the medical centre. That cannot be right—

[Andrew Lewer (Northampton South) (Con)]

rose—

[Stephen Pound]

And I am sure the hon. Gentleman will tell me why it cannot be right.

[Andrew Lewer]

I thank the hon. Gentleman for allowing me to intervene. The relocation of the University of Northampton has caused a surge in planning applications for HMOs and a lot of unease among the residents of Far Cotton. Although Northampton Borough Council has a policy of restricting HMO density to 15% within any given area, that has been complicated by planning appeal decisions and a rise in unlicensed HMOs in the area. The community accepts that some change will take place; it is the scale that has caused the problem, as he has explained. How would his proposal assist this problem?

[Stephen Pound]

I seem to have struck a nerve. This issue is not unique to Perivale. Perivale may be unique, but in this matter it is not, quite clearly. The point is that at the moment local residents are profoundly disturbed because they see the character of their area changing and there is nothing that the planning officers can do. Last Sunday week, Councillor Tariq Mahmood, a local councillor, and I met the residents in the street, in Wyresdale Crescent, and to my horror I discovered that three local residents—families I have known for years—were selling up and moving out because they could not stand the character of their street changing from a quiet residential backwater into a row of houses in multiple occupation, and of course that then accelerates the process. Those three sell up, and before we know where we are we have a constant row of them.

I am not implying for a moment that the people who live in HMOs have riotous parties all night. This is about the number of people. There are issues of parking and refuse collection, as well as the drain and demand on local services. When Councillor Mahmood and I and the other two Perivale ward councillors, Councillors Charan Sharma and Munir Ahmed, went to see the chief planning officer at Ealing, David Scourfield, he said in effect, “My hands are tied; there is very little I can do,” and he referred to an article 4 direction, which I will come on to in a moment. Despite the fact that it is a total and utter waste of time and a complete irrelevance, it happens to be statute law and therefore I shall refer to it.

In the situation that I have described, what recourse is left for local residents? One of the residents has done an enormous amount of investigation and discovered that five of the properties, each one registered with a different company, are in fact all related to the same company. They all come back to the same addresses, in two cases outside the United Kingdom, and even outside the continent of Europe. Why could it not be a legal requirement for people to say that when making these multiple applications? If one company—David Hanson plc of north Wales, for example—decided to build 50 HMOs in Perivale, it would have to declare it. You would also have to declare it to the House authorities, Mr Hanson, but that is neither here nor there. However, at the moment companies do not have to declare that, because each application is considered individually.

The draft London plan, to which I referred earlier, does recognise the importance. It says in “(H12) 4.12.7”:

“Houses in multiple occupation (HMOs) are an important part of London’s housing offer, reducing pressure on other elements of the housing stock. Their quality can, however, give rise to concern.”

Here is the issue: quality. Quality is not an issue, because building enforcement can apply in these cases, but more importantly, the fire brigade has to certify. Therefore, there is the certification process and the licensing process, but that does not solve the problem. Why does it not solve the problem? It is partly because planning permission is not required in order to be a licensed HMO. Even worse, in London there is actually a numerical limit on the number of HMO licences that a local authority can give—I cannot speak for Reading, Stoke or Northampton. That means that once that ceiling is reached, the pressure of withholding a licence cannot be used by a council to make a difference. That seems to be an anomalous situation. I can understand why and how it has come about, but it is not helping the people of Perivale, and I do not think it is helping the people of Stoke, Northampton or Reading either.

The article 4 directions are what are normally flagged up. They are normally considered to be

“backstop powers to require developers to apply for planning permission for HMO conversions”.

Councils may use them

“in cases where they have concerns about the impact of a concentration of HMOs on local objectives in an area.”

Marvellous! That is music to my ears—absolutely delightful. This is where the council has backstop powers where there is a concern about the impact of a concentration of HMOs. Sadly, all is not well. It might appear good, but this is the curate’s egg. There might be a good bit, but most of it is completely rotten.

The plan continues:

“A council has to give 12 months’ notice before it can use an Article 4 Direction”—

meaning that the powers have no use whatsoever

“for reacting swiftly or efficiently”.

It goes on:

“If a council cannot wait 12 months to use an Article 4 Direction because it would risk the best interests of their residents…they must pay compensation costs.”

I need hardly say that local authorities are under unprecedented financial pressure and simply to take the risk of having to pay in these particular cases would be untenable.

Equally:

“If a council uses an Article 4 direction, it will not necessarily prohibit the development or change of use.”

What use is it? That is ridiculous. It is as much use as a chocolate teapot. I see no more purpose in it whatsoever. It simply means that local people may have an opportunity to make representations and the elected representatives can decide on the development’s merits, but after the horse has bolted.

Article 4 directions must be reduced to get rid of the 12-month notice period and the compensation provisions. These are handcuffs. These are a ball and chain on local councils. It is impossible for a serious, sensible and concerned local council to actually act in the ambit of the article 4 direction, if 12 months’ notice must be given, plus the concentration provision. It simply makes no sense whatsoever. I believe that the Local Government Association has made representations to the Minister and her Secretary of State on this matter.

Planning law has to balance the two priorities. In the case of HMOs, I think we tended to look at it through the prism of student accommodation, or accommodation in some rundown, old areas, where it seemed to be a regeneration and gentrifying tool—in some cases it was; in some cases it was not. In the case of Perivale, it seems to me that someone has constructed a financial algorithm that says, “Because house prices here are lower than in the rest of west London, for the moment, where you can buy a three-bedroom suburban house for under £700,000”—that might raise eyebrows in Stoke but, believe me, it is pretty good value for money in west London—“if that is split into six units, you will get about £1,000 a month in rent.” Do the maths, as they say. It will work out as a very profitable arrangement. One of the people behind these companies is based in Brooklyn, New York, which is not normally closely linked with the London borough of Ealing, let alone Perivale. That suggests to me that this is a straightforward financial consideration that someone has made.

I am in no way opposed to people making a few honest bob. Good luck to them. I am quite new Labour about this. I think that people should be able to make money, but not at the expense of suffering constituents and residents, who wake up in the morning to find that what was their home—their parent’s home, in many cases—their neighbourhood and their area have changed utterly beyond recognition. What about the people moving in there? The young professionals or students moving into an HMO in Perivale are not going to be welcomed, wanted, liked or loved; it is going to be damn difficult for them.

What worries me most of all, however, is the fact that people look to their local authority, just as they look to us as Members of Parliament, to protect and defend their rights and interests. We must do that. The law should work for people, not against them. In this case, by tightening up an article 4 direction and maybe having a look at some of the other regulations within the use classes order, we can solve this problem. Now is the right time to solve this problem, because the national planning policy framework is subject to consultation at the moment.

I want my hon. Friend the Member for Reading East (Matt Rodda) to make a brief speech. Mr Hanson. I hope that I have not been overly emotional, but I cannot stress too strongly the impact of this sort of development on quiet, decent, ordinary suburban people, who have not asked for this, do not want it and cannot endure it much longer. I look to the Government to come to their rescue.

[David Hanson (in the Chair)]

I will call Mr Rodda to speak, but we must remember that the debate finishes at 4.30 pm and the Minister has to respond.

16:19

[Matt Rodda (Reading East) (Lab)]

Thank you, Mr Hanson, for the opportunity to speak briefly in the debate. I welcome the work of my hon. Friend the Member for Ealing North (Stephen Pound) on this important issue and I congratulate him on securing the debate. I want to speak briefly in support of the hon. Member for Northampton South (Andrew Lewer) and also my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell), and make two points.

The first point is about the sheer proliferation of HMOs in urban Britain today. In my experience as a former councillor and now as an MP for a town in the country some way from London, the scale is quite significant and might not be fully recognised by all colleagues. Some 28% of the housing in Reading is now privately rented, and a significant proportion are HMOs. The typical issues that we face in our town may well be familiar to colleagues representing similar sorts of towns with similar street layouts. We have a lot of Victorian and 1920s housing. We have a limited amount of street space for parking—it is not like a rural area, with driveways or land at the side of buildings. One of the big challenges that we face—I suspect that other hon. Members may face it in their constituencies—is the sheer volume of cars generated by HMOs, in what are already densely populated areas.

The second serious and practical problem is the large number of additional refuse bins that are created. That might sound like a mundane matter, but as my hon. Friend the Member for Ealing North pointed out, a sudden change in the housing ownership on a quiet street can dramatically alter its appearance. It can be quite disturbing for local residents to suddenly see large numbers of new bins popping up in front gardens and large numbers of cars. The other issue is that many small front gardens become overgrown and much less attractive. It can be quite a dramatic change for residents who are used to living in a settled urban environment—and who are often from a range of age groups, from young couples and single people to elderly people—to suddenly have a proliferation of very often temporary residents who are unable to stay in the area for long and, as a result, unfortunately unable to put down roots.

I would also like to speak up for the residents in HMOs and to consider things from their perspective, because part of the issue is the wider lack of housing supply in the country, particularly in hotspot areas. I do not know about Northampton, but I suspect that, like us, it may face a chronic lack of housing. Part of the problem is that there is just not enough affordable housing for young people and people moving into these areas. Although this is not quite at the rates found in the constituency of my hon. Friend the Member for Ealing North, I know someone who recently had to pay £300,000 for a two-bedroom terraced house in Reading town centre. That is pretty expensive. What we really need is more affordable housing to buy and more affordable council housing to rent.

I urge the Government to look into this. The article 4 directions offer some ability for local councils to intervene, but they are wholly inadequate. If the Minister can comment on that and suggest ways of enhancing legislation, I will be extremely grateful.

16:20

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

It is a pleasure to serve under your chairmanship, Mr Hanson.

I congratulate the hon. Member for Ealing North (Stephen Pound) on securing this important debate. I welcome the wide-ranging discussion and recognise many of the concerns about the impact of houses in multiple occupation, or HMOs, in certain areas.

I thought it would be helpful if I set out clearly the wide range of housing and planning controls that exist to control both the creation and operation of HMOs. I hope this will demonstrate that local authorities have an effective array of tools to ensure that any adverse impacts from HMOs can be properly addressed. Before discussing those controls in detail, it is important to acknowledge the wider context: the pressing national need to increase the supply of all types of housing.

As we set out in the housing White Paper, the Government are determined to boost the supply of housing and, over the longer term, create a more efficient housing market where outcomes more closely match the needs of all households. Our actions are already delivering success. Since 2010, we have delivered more than 357,000 new affordable homes, and around one quarter of them are in London.

The Prime Minister recently announced an additional £2 billion funding for affordable housing, which will increase the affordable homes programme budget to over £9 billion. The new funding will support councils and housing associations to build more affordable homes where they are needed most—where families are struggling with rental costs, and some are at risk of homelessness. But there is more to do.

The Government recently published a revision of the national planning policy framework for consultation, which implements around 80 reforms announced last year. It will ensure that planning remains locally led and that all local communities get the homes and infrastructure they need. It represents an ambitious step forward in our aim to tackle the housing crisis by bringing forward more land for housing in the right places. The consultation runs until 10 May at 11.45, that is 23.45—

[Stephen Pound]

A quarter to midnight!

[Mrs Wheeler]

At 23.45.

Subject to being properly planned, constructed and managed, the provision of additional HMOs can make a small but important contribution to housing supply in some areas. That is particularly true for those entering the market for the first time.

One final point of introduction: hon. Members will appreciate that because of the Secretary of State’s role in the planning process, I cannot comment on specific cases raised today. I apologise to the hon. Gentleman that my comments will therefore cover the issues in general. I hope, none the less, to reassure hon. Members that the Government take proper control of HMOs seriously.

HMOs play an important role in the private rented sector. They provide a cheaper alternative to other private rented accommodation and flexibility. However, they sometimes pose greater management challenges than single household accommodation. That is why mandatory licensing of HMOs was introduced in 2004 for properties with three or more storeys that are occupied by five or more people. Since its introduction over a decade ago, it has been successful in raising standards and enabling local authorities to tackle overcrowded conditions and poor management practices. However, significant growth in the private rented sector means that some smaller properties are being converted for use as HMOs. Those HMOs do not legally require a licence at the minute, and there are sometimes problems with standards. To address that, we are extending mandatory licensing, which we expect to come into force in October 2018.

I am sure you will be pleased to hear, Mr Hanson, that the extended scope of mandatory HMO licensing will cover properties where five or more unrelated tenants share facilities, regardless of the number of floors in the building. We are also creating two new mandatory HMO licence conditions: national minimum sizes for rooms used as sleeping accommodation, and a requirement to comply with council refuse schemes.

[Gareth Snell]

As the Minister is outlining things that the Government are looking to do, would they be willing to consider a saturation limit? As my hon. Friend the Member for Ealing North (Stephen Pound) said, the issue is not necessarily the numbers, but the concentration in certain areas. If the Government were able to entertain that, I am sure she would find cross-party support.

[Mrs Wheeler]

There is not, in fact, a limit on the number of HMO licences a local housing authority can issue, so it can deal with it that way.

Good management of HMOs is important. Before a local housing authority can issue a licence, it must be satisfied that the proposed licence holder or landlord is a fit and proper person. It has to ensure that the landlord has no unspent convictions, has not carried out unlawful discrimination and is not in contravention of housing or landlord and tenant law.

Local authorities have the powers that they need to impose conditions on how landlords manage these properties, and to ensure that they do not cause overcrowding. Conditions can also be included to ensure that landlords maintain the upkeep of properties. The conditions can also make them responsible for such things as antisocial behaviour committed by their tenants. A breach of a licence condition is a criminal offence and a licence holder can receive a substantial fine if convicted. Repeated or substantial breaches of a condition can also result in the licence being revoked. That is a significant penalty.

Licensing HMO properties strengthens a local authority’s enforcement capacity. They have strong powers in the Housing Act 2004 to tackle poor property conditions and overcrowding in HMOs. They can serve improvement notices requiring landlords to carry out works to remedy poor conditions or make prohibition orders to prevent overcrowding. In the most serious cases, where the health and safety of tenants and their families is at significant risk, local authorities are under a duty to take action to combat the problem.

Landlords who fail to comply with an improvement notice or prohibition order are committing a criminal offence. Indeed, failure to apply for a licence is also a criminal offence. We have gone further in tackling rogue landlords by introducing new powers in the Housing and Planning Act 2016 that mean that non-compliant landlords can face a civil penalty of up to £30,000. Furthermore, we have enabled local authorities to keep the income from such fines to support their enforcement capacity.

Ealing, specifically, has been proactive in licensing smaller HMOs by introducing an additional licensing scheme in 2017 to cover HMOs occupied by four people or more. Ealing has gone further in using licensing to raise standards in the sector. It has also introduced selective licensing, which allows it to license all private rented properties in specific parts east of the borough. That is with a view to driving improvements in the quality and management of such properties. Ealing has also previously been successful in securing additional financial support under our rogue landlord funding. Through that, it has carried out more than 1,500 inspections and 30 raids in partnership with the UK Border Agency.

However, I recognise that HMO accommodation can sometimes lead to problems for local residents who live in the vicinity. Many of the problems arise from the intensification of the use of the property. If there is a concentration of HMOs, the cumulative impact can affect neighbours’ amenities. The planning system also has a role to play in controlling such development. Permitted development rights allow a family house to be changed to a small house in multiple occupation for up to six people sharing facilities without a planning application. Where neighbours have concerns, they can alert the planning authority. It is then for the planning authority to determine whether the works are lawful, and if not what, if any, action to take.

I will get to article 4, but I am concerned about the time because the hon. Gentleman probably wants to respond.

[Stephen Pound]

indicated dissent.

[Mrs Wheeler]

The hon. Gentleman does not? That is really kind; I thank him.

I will talk more about enforcement. A landlord who deliberately rents out a house to more than six individuals would be in breach of planning control if they had not obtained planning permission from the local planning authority, so it could take enforcement action.

The Government believe that it is important to tackle breaches of planning control that would have an unacceptable impact on the amenity of an area. Local planning authorities already have a wide range of strong enforcement powers to do so. However, enforcement action can be taken only when a breach has occurred. It cannot be taken in anticipation of a likely breach; although, where a local authority considers that an unauthorised development is likely to occur, it can apply for an injunction to prevent that from happening.

Making full and effective use of all the available powers can also act as a deterrent. Taking action against the unlawful development of houses in multiple occupation in a targeted area, combined with licensing and building regulation enforcement if necessary, can send a strong message to other rogue developers and landlords that they will not be tolerated. However, it is up to planning authorities when and how they use these powers. I am encouraged to learn that the hon. Gentleman recently met the chief planner of Ealing London Borough Council to discuss the local issue. It is best placed to undertake these investigations.

To conclude, I hope that hon. Members are convinced that there are rigorous powers available to local authorities to ensure the control and management of HMOs.

Motion lapsed (Standing Order No. 10(6)).