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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  • Rob Thomas
    commented 2018-02-26 14:09:15 +0000
    You say that licencing works. What evidence do you have to show that?
    I would point out that a recent Shelter report shows that Newham now has the highest rate of people in temporary accommodation in the country.

    When every landlord has to pay £750 per property in licence fees, who do you think will end up paying this extra cost? When any business sees an increase in its costs, it will attempt to pass these onto its customers. Also, as regulations have increased, more landlords have decided it is no longer worth renting out property, so they are selling up. As a result, their tenants become homeless. This is madness, hurting tenants and you at Generation Rent are cheering it on. You are clearly economic illiterates.

    You never once seem to acknowledge that the rental market is just that – a marketplace where tenants have a choice. The greatest power tenants have is the power to decide where to spend their rent. But landlords also have a choice. They are not charities, they are businesses and if you load them with too many costs and too much regulation, they will take their capital elsewhere, driving up rents and reducing tenant choice.

    Let me give you just one example of crazy regulation. The government has announced it wants to introduce minimum bedroom sizes in private properties. Sounds reasonable? Well, consider where a tenant and a landlord have an agreement where the tenant has taken a small room (perhaps because he/she is on a tight budget or doesn’t spend much time in their room). You have now made that tenancy illegal and the tenant will be made homeless – well done! I’m sure life on the streets is much better than in a small bedroom.

    We have a housing crisis in this country because governments have prevented adequate new housing through tight planning restrictions – all these regulations in the PRS can do nothing but make this crisis worse, with the biggest losers being the tenants who will face less choice and higher rents. So well done Generation Rent, possibly the dumbest lobby group in the country.