The Executive Member for Culture and Communities and the Executive Director for Growth and Place submitted a report that sought approval to roll out Selective Landlord Licensing within a proposed area of Newport Ward.
The Housing Act 2004 provided the Council with powers to introduce Selective Landlord Licensing for privately rented properties, in areas experiencing low housing demand and/or significant persistent antisocial behaviour. The purpose of such schemes was to improve standards of property management in the private rented sector. Councils had the option to introduce Selective Landlord Licensing if it was believed that the scheme, along with other measures, would have led to improved social and economic conditions in the area.
Following on from the success of the North Ormesby scheme that was introduced in 2016, at a meeting on 1 October 2018, the Executive Member for Culture and Communities approved the commencement of appropriate consultation that related to the rollout of a Selective Landlord Licensing scheme to part of the Newport Ward.
Newport was experiencing major challenges associated with social and economic decline, that included:
high levels of crime and antisocial behaviour;
high levels of private rented properties and poor living conditions;
high levels of empty properties; and
a transient population.
Consultation on the scheme proposal was carried out over an 11 week period between 12 November 2018 and 28 January 2019. Respondents to the consultation overwhelmingly (80%) agreed that the introduction of Selective Landlord Licensing planned to help tackle some of the issues in the proposed zone. In respect of consultation responses, generally, residents and interested parties were in favour of introducing the scheme and landlords were generally opposed to it. A small consortium of (3) landlords had asked the Council not to implement the scheme in the Newport Ward and had urged the Council to use alternative
powers instead. Two of the landlords from that consortium (Jomast Accommodation Ltd. and Python Properties) had provided written responses to the consultation setting out their objections (see Appendix B of the submitted report).
A representative from Python Properties was in attendance and spoke in objection to the scheme. The representative requested that an alternative to Selective Landlord Licensing be developed by formalising a Public/Private Sector Partnership. In response, the Executive Member for Communities and Culture advised that although approval was sought for the introduction of Selective Landlord Licensing in the proposed area of Newport Ward, it was highly important to involve Python Properties and other landlords in the introduction of the scheme.
A full consultation report was attached at Appendix D of the submitted report.
Other potential decisions and why those had not been recommended
Accreditation Scheme: Accreditation was a mechanism that helped landlords or agents meet agreed standards of competence, skills and knowledge about the business of owning, managing or letting a private rented home.
Due to its voluntary nature many good Landlords joined accreditation schemes voluntarily, however, those schemes were less effective at engaging some of landlords that could have poorer properties that were causing many of the issues. Based on previous experience, it was not considered that an accreditation scheme would have been effective in addressing the issues in Newport. In addition to that, the council would not have been in a position to invest the necessary resources to implement an accreditation scheme.
Enforcement of Housing Standards: The Housing Act 2004 introduced the Housing Health and Safety Rating Scheme (HHSRS), which allowed local authorities to inspect privately rented properties to ensure the condition of that property did not have an adverse effect on the health, safety or welfare of tenants or visitors to that property.
Where necessary the Council would have served statutory enforcement notices to ensure the condition was improved. Whilst that approach did improve property conditions it did not have a concentrated impact in one area. In addition that power did not tackle property management standards. Through the selective licensing designation and associated training advice and support, landlords would have recognised what improvements needed to be made to their properties, reducing the need for action under the HHSRS.
Management Orders: Part 4 of the Housing Act 2004 introduced the use of
Management Orders. The general effect of a Management Order was that the Council took control of the property, although legal ownership did not transfer from the landlord. There were two forms of Management Order, interim and final. Interim lasted for a period of 12 months which could have then been followed by a final Management Order which lasted for a maximum of 5 years.
Once a Management Order was in place the Council took over the management of the property. The occupiers paid their rent to the Council and any repair costs, such as routine repairs or building insurance, were taken from the rent before any surplus was given to the owner (landlord). That power only dealt with individual properties and was resource intensive.
That approach did not present a long term solution to address poor management of privately rented stock as the property was returned to the original owner who would not have necessarily improved their management standards in the interim.
Private Sector Leasing scheme: A Private Sector Leasing Scheme was where the Council took out a lease, normally 3 to 5 years in duration, from a private owner or landlord on their property. The Council then used the property to provide affordable accommodation for homeless families.
There was no guarantee that landlords, especially the worst, would have joined the scheme and the Council could not have compelled them to do so. As with Management Orders the scheme did not address poor management practices as the landlord did not gain experience, advice or training during the lease meaning that once handed back, management standards would have once again been unsatisfactory.
In summary, the alternative options to selective licensing would have required some, if not all, of the investment from the Council and Council Tax Payer.
Selective licensing would have been funded through the cost of licenses paid for by those landlords included in the scheme.
There was no single solution and each alternative would have its limitations. No single intervention, including selective licensing, could have solved the problem and therefore a coordinated strategy was required, which linked a full range of agencies and services using various interventions.
That the results of the consultation be noted and the roll out of Selective Landlord Licensing within the proposed area of Newport Ward be approved.
Implementing the next phase (Newport 1 area) would have allowed the Council to progress with the original implementation plan as set out in the Executive Report that was approved on 9th December 2014.
The introduction of selective licensing was considered to have the potential to make a major contribution to address social and economic issues as part of the Newport Neighbourhood Action Plan.