Landlord licensing works - yet the government is delaying renewal of the most successful scheme

Since the east London borough of Newham introduced mandatory borough-wide licensing of all private landlords in 2013, improvements in the sector have been indisputable. Criminal landlords are being driven out of the borough, standards and safety in the sector have improved and enforcement has dramatically increased.

Yet with the scheme due to expire on 31 December 2017, government is now more than four weeks overdue in making a decision on approval of a new, five-year scheme, to start in the new year.

As the first English local authority to introduce borough-wide licensing, Newham has led the way in enforcing against the worst behaviour and conditions in the PRS. The case for licensing is overwhelming:

1. Licensing is the best system currently available to improve the PRS and support renters

  • Under licensing, landlords are required to register any properties they rent with the council and must agree to comply with a set of conditions
  • Any breaches can lead to the licence's duration being cut, the licence being revoked, legal action and fines
  • Tenants and the council can claim back up to 12 months' of rent (or benefit) paid while a property was unlicensed, using rent repayment orders

2. Licensing has provided the tools for a dramatic increase in prosecutions of rogue landlords

  • Since the scheme began, there have been 1,217 prosecutions of criminal landlords in Newham
  • Without licensing, taking action against criminal landlords is bureaucratic and slow. Newham’s prosecutions alone accounted for 70% of all prosecutions of landlords in London last year
  • The worst landlords have been stopped from operating altogether, with 28 banned outright by the council

3. Licensing has seen other benefits to the local authority and the area

  • Over £3 million of Council Tax has been recovered since the scheme's introduction
  • 25 letting agents have been fined or prosecuted
  • The council has recovered £380,000 of housing benefit paid to 61 unlicensed landlords

4. There is overwhelming support for licensing across the borough and the city

  • Polling by ORS found that 81% of Newham residents agree that the current scheme has been effective in improving the condition and management of rented homes 
  • 89% agree that continuing the licensing scheme would improve conditions and management of rented homes 
  • 90% of residents agree with the general proposals for licensing
  • The London Mayor, Fire Brigade, and neighbouring boroughs have all expressed support for the scheme

Although the council put in the new application in July, and guidance states that a response should be received within 8 weeks, the government has yet to reply.

This delay is particularly frustrating because it means there will almost certainly be a gap in provision between the old and the new schemes, should the application be approved.

With nearly half of Newham's residents renting from a private landlord, and evidence of widespread overcrowding, poor conditions, and bad management, licensing has been vital in helping the council start to get to grips with the endemic housing problems that residents face.

Now that Parliament is back from recess, Government should recognise the major steps that Newham has made in improving its private rented sector.

This means providing them with the tools to continue that work, by approving the new scheme and showing a firm commitment to tenants. 

There are an estimated 795,000 unsafe private rented homes in England. A decision to renew Newham's scheme would give other councils the confidence to adopt their own licensing schemes and start improving many more renters' lives. A decision to block the scheme would not only risk letting the criminals back into Newham's rental sector, but also stifle wider efforts to tackle poor housing conditions.

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