Selective Licensing of Landlords

Jim Cunningham Excerpts

Wednesday 3rd July 2013 Westminster Hall

[Graham Jones (Hyndburn) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, for what I believe is the first time. During this short debate, I want to make the case to the Minister that the Government should introduce measures to amend selective licensing of private landlords in order to allow local authorities to tackle poor-quality rented housing. They should do so by amending the Housing Act 2004 to create a third reason to bring forward a licensing scheme, adding to that of low demand and/or antisocial behaviour. I am talking about changes that will allow local authorities to add new licence conditions if they so choose.

At the moment, there is a huge problem, which is recognised by hon. Members on both sides of the House. Chronically poor housing persists, and in some areas, such as Haslingden and Hyndburn—my constituency—in huge concentrations. Local authorities are not fully able to enforce the housing standards enshrined in the 2004 Act—notably, the housing health and safety rating system. In itself, that is an inadequate standard that does little to tackle anything but the absolute worst of conditions.

Most local authorities faced with concentrations of poor housing do not have the resources to inspect, report, prosecute and enforce housing standards. Amending the 2004 Act would allow councils to fund, by means of selective licensing schemes, enforcement of decency standards as applicable to the area and as deemed appropriate by the local authority. That would bring the private rented sector into the 21st century. The Local Government Association has come out in support of that approach, and a large number of local authorities support the extension of the selective licensing system to cover qualitative standards in the rental market. That approach would, by the very nature of a selective licensing scheme, focus on areas of particularly poor housing and, crucially, it would meet the original aim of the Act—to improve housing standards.

In Haslingden and Hyndburn, low demand has led to considerable speculative property buying, resulting in a bloated private rented sector. Those areas typically contain old housing stock. They are areas of existing low demand and low value.

[Mr Jim Cunningham (Coventry South) (Lab)]

I totally support what my hon. Friend is saying about a licensing scheme and expanding the abilities of local authorities to help, but does he agree with me that something should happen in addition to that, particularly in relation to poor housing? The Government should consider a return to what we used to call improvement grants, which were abolished by the previous Conservative Government. Also, given that rents are going through the roof, that should be examined.

[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.