Selective Licensing of Landlords

Andrew Stephenson Excerpts

Wednesday 3rd July 2013 Westminster Hall

[Graham Jones]

Those are obviously two further issues, on top of the issue that is being discussed today. I certainly would call for a review to consider those two aspects of housing market renewal or housing regeneration. Obviously, on the grants issue, all Governments must now face up to the economic reality of Government expenditure. In the future, that issue may be a consideration, but I would like to focus today on the selective licensing aspect as a part-way answer to that shortfall in funding, which my authority certainly used to receive.

According to the Hyndburn stock condition survey, 78% of the stock in Haslingden and Hyndburn is pre-1919, compared with the national average of 45%. Entire streets are almost exclusively owned by landlords, to the extent that people are conscious of what I will describe as “landlorded” areas, where renting but more particularly buying is avoided. In my constituency, 15% of the stock is privately rented—that is the old figure; the percentage is rising, as it is nationally—compared with the national figure of 11%. However, when we zoom in on the poorer areas, we find much higher concentrations of privately rented properties in particularly poor condition, which are often owned by a small number of individuals. According to the last Hyndburn borough council stock survey, 26.6% of private rented properties had category 1 hazards. That is the highest rate of any form of tenure. If we zoom in on the Spring Hill and Scaitcliffe areas, the rate rises to 52.4%. If we looked at specific neighbourhoods or streets, it would be considerably higher still.

Despite the existence of legal powers and the duty on councils to enforce the housing health and safety rating system, there is still a high number of non-decent and dangerous homes. Hyndburn council has had the deepest budgetary cuts. It was surpassed in percentage terms only by Great Yarmouth and neighbouring Burnley. The figure was 16.9%, making it particularly difficult to employ staff to do such work. The reality across the UK is that councils do not have the resources to enforce and prosecute when it comes to the housing health and safety rating system. Extending the scope of selective licensing would in part resolve that.

[Andrew Stephenson (Pendle) (Con)]

I congratulate the hon. Gentleman on securing this debate on a very important topic. As he will know, my constituency faces similar housing challenges to his. There are well over 1,000 empty properties and similar problems with rogue landlords. I know that he is very keen on selective licensing, but does he not agree with me that voluntary landlord accreditation schemes, such as the one operated by Pendle borough council, can deliver the same kind of results as he hopes to achieve through the extension of the selective licensing regime?

[Graham Jones]

In part, I share the hon. Gentleman’s ambition for voluntary accreditation schemes. In Hyndburn—in the wider constituency—there are 2,500 to 3,000 empty properties. I find that the accreditation schemes go some of the way and encourage those who wish to participate and to provide a tenanted property of a decent standard, but the rogues or poor landlords or long-distance landlords do not want to be accredited and do not participate in such schemes, and they are the people who are the target of any action to try to improve a neighbourhood, a particular property or the conditions for an individual or a family. Accreditation schemes have a role to play and can offer advantages, such as discounts in the licensing scheme; accreditations are often a passport to a reduced licence fee. There we have a reason to have an accreditation scheme, and such a scheme does encourage higher standards. But when it comes to minimum standards, we have to go further. One sits above the other, I believe.

The work load of the council in dealing with private landlords and the sector is disproportionately large because of the size of the rented sector in the constituency of the hon. Member for Pendle (Andrew Stephenson) and in Haslingden and Hyndburn. Adding simple standards to a licence would be no great burden to the scheme, either financially or in terms of time spent on inspections, with the licence fee funding the extended enforcement activities of environmental health officers and landlord accreditation officers within the scheme.

I shall now deal with the effect that poor-quality homes have on the housing market, which is an important and neglected aspect of this matter. Poor-quality housing is one of the most visible social problems where it is prevalent, and unfortunately in many areas there are large concentrations of extremely poor privately rented properties. As well as the individual tragedy for the young family or particularly the young children in those properties being forced to live in unacceptable conditions, poor landlords cause wider degeneration issues. Streets and neighbourhoods quickly go into decline. While the south of the country and other high-demand areas are suffering a housing crisis of under-supply and high rents, low-demand areas are suffering an altogether different housing crisis—a crisis of substandard accommodation and unwanted properties to let, which are often abandoned. It is the mark of a civilised society that landlords provide tenants, and crucially their children, with basic elements to a property, such as double-glazed windows, a decent heating system, good insulation, safe electrics, and a reasonably modern kitchen and bathroom, which we would all expect in a property in which we lived.

People do not wish to live in sub-standard housing. Tackling low-demand and anti-social behaviour is important in itself, but it is not enough. Low-demand areas turn quickly into streets full of voids, as in my constituency and the constituencies of the hon. Member for Pendle and other hon. Members. Streets are effectively abandoned, which brings down the whole neighbourhood for a generation. The old ways of regeneration through Government grants have gone, for the time being. We must accept the economic times in which we live, and such a licensing scheme is an answer to that reality—a change for the future.

Standards should be another basis for selective licensing, because they fit with the original purpose of the powers, as defined in the 2004 Act. Poor housing standards are hugely damaging to the housing market in an area. They result in people living in areas they no longer wish to be in, lead to negative equity for innocent owner-occupier neighbours, and explain in part why one in 13 properties stands empty in my constituency. There needs to be recognition that undesirable, poor-quality private sector housing is a cause, as well as a symptom, of low demand and weak markets. Making such a change would complement the original aims of selective licensing. The Minister might be able to point to many examples where that is not the case, but I would make a powerful case—one that I am sure he would accept—that in too many areas poor standards are a reality and local authorities should be allowed to license landlords and bring housing up to a reasonable standard. I hope that he will not respond by simply restating that local authorities already have such legal powers; he must recognise that there are problems in the private rented sector that are not being resolved in the existing framework.

These are austere times, when Government programmes for deprived neighbourhoods have all but run dry. Driving up conditions through selective licensing could rebalance housing markets and provide prospective residents and tenants with greater confidence. Cash-strapped town halls need new, more value-driven solutions to the problems of poor housing; a modified 2004 Act might just provide them. Selective licensing was brought in to deal specifically with the problems of declining neighbourhoods, and now it must be extended to meet that ambition.

In conclusion, the private rented sector cannot be seen in isolation from the wider housing market and owner-occupation. Aspiration cannot be removed from whole neighbourhoods. Tenanted families should have the right to a property we ourselves would call a home: double-glazed windows; a decent heating system; good insulation; safe electrics; and a modern kitchen and bathroom. If we make a very small change in the law, we could begin to tackle endemic poor standards in the private rented sector, which would, importantly, give the young children of the future the hope of a better life—a decent life—away from squalor and, more crucially, begin seriously to tackle low demand and regenerate some of England and Wales’s most deprived areas.