Licensing Consultation in Southwark

Reply to the comment left by "Philipp Brunstrop" at "29/10/2014 - 23:30":

Hi Philip,

On balance I do disgree with most of your points, not really much of a surprise.

The weakness of current powers is that they are all reactive. In almost every case we rely on a complaint or a referral from other agencies or departments to initiate action.

The effect of this is that a substantial number of tenants who are frightened or intimidated never get a chance to have any redress against their landlords.

Every day there is harassment, forcible eviction, forced overcrowding, dangerous property conditions reported to this council. There are a group of landlords who simply shrug off the tiny penalties imposed for contravention of the regulations.

The real power of licensing is that it allows the Council to be proactive and take action against the bad landlords from the outset. Licensing is not a perfect power, few are, but it has some key features that will have a marked and robust effect on those who really should not be allowed to let homes, particularly to vulnerable and desperate people.

The fit and proper test is a real game changer for regulating the rogues and it is not set by the council, it relies on the judiciary and courts to activate it.

Our problem is that we know who we have had regulatory dealings with, but there are those who stay under the radar by frightening their residents into silence. These landlords tend to let bedsits and shared houses all over the Borough but until we have some form of power to inspect and regulate this will not be dealt with.

I am sorry but there is a link between property related ASB incidence and the density of low rent PRS property.

For the vast majority of ethical and effective landlords we understand there is a burden from licensing which is why we have tried to draft the most tailored and simple proposal that is consistent with achieving our objectives.

When I meet landlords they really want the bottom of the market to be regulated better and the competition from the rogues to be removed or at least reduced. Our proposal if adopted will lead to a clearer minimum standard for letting and this will have the most effect at the bottom of the market.

In an ideal world I would have proposed a licensing scheme where only bad landlords would be obliged to license, however after months of analysis and thinking about how to use this power and all the others it is simply impossible to find any valid method to differentiate between good and bad.

Can anyone seriously think of a way to get the regulatory effect without the process of licensing ?

Our intention is to focus as much as possible on the problems, which is why our proposal is not like any other. This is why we have limited the selective area to the highest incidence of ASB.

The costs of licensing is about the amount of money required to run the scheme, we can't use it for anything else. The point of tying fees to number of bedrooms is that it is entirely fair in that the more rooms you rent the more licence fees you are expected to pay..

We have asked tenants in the consultation if they think they still want licensing if it costs them a set amount in rent increase every week. I think most tenants would gladly pay a pound a week to improve standards.

"Can anyone seriously think of a way to get the regulatory effect without the process of licensing ?" "...simply impossible to find any valid method to differentiate between good and bad [landlords]". How about utilising schemes already in places such as Southwark's own accreditation scheme, or acknowledging the schemes run by NLA etc. Add to this the requirement for all landlords to submit information relating to their properties, tenancies, and evidence that their property complies with fire and health and safety requirements (gas safety, electrics and so on), tenancy deposit schemes and that the landlord belongs to a landlord association of which Southwark Council approve. From the experience of the Council officers, do they not agree that the groups of rogue landlords you mention above could not and would not comply with this and would therefore indicate to the Council where their efforts should lie to start? Further a a code of practice could be drawn up that any Southwark landlord must abide by in order to let property in the area, to ensure you receive all information you need, otherwise further steps can be taken by Southwark Council to investigate the landlords concerned. As with licensing you would then receive information on ALL landlords in the borough, along with the addresses of their properties, and those properties that do not appear on your register you could individually identify as a) council tenants or b) owner occupiers, using online tools. Those who flag up as PRS, could then be individually visited and, as they are not licensed Southwark would have powers to fine the landlord an amount to include all their costs in investigating and bringing the action.

This action I would applaud.

Otherwise I do not understand how licensing will bring to your attention the type of landlords you are after. Surely it is only landlords like myself who will be first to come forward to register, and not those rogue landlords? You will then be so busy dealing with the deluge of applications, that it could leave even less time to deal with the rogue landlords who remain hidden as they do not protect deposits etc and therefore do not come to your attention as a landlord. Even their tenants will deny there any problems, as you describe above, for fear of retaliation.

Rogues landlords in Southwark eh who'd thought it possible?

Christiana Okwara, Brian Davis, and Johanna Ashley

These three conspired to unlawfully evict a man from his Southwark council flat (23 years a tenant) over £18 worth of rent arrears and destroy his possessions, including memory sticks holding thousands of hours of work, before then covering up their wrongdoing. In a swingeing ruling, a High Court judge found that Southwark housing officers entered into a conspiracy to “harm” the man, known only as AA, by securing his eviction from his flat in Peckham, south London, and then conceal their actions from investigators.

see the independent.co.uk

It seems reasonable to stop those 3 individuals from getting licenses in the future so can we have written undertaking from Southwark that (at least) these 3 people named above would never be granted licenses under fit & proper rules should a scheme come in, it'll make a great example of how licensing works in protecting tenants from rogue LL's.

For all we know they've left the council and have set up a letting agency already or have their own PRS portfolio, it as after all their field of expertise. I think its safe to assume they'll stay in the same sector and borough in order to make a living. They might even pop up as consultants to an RSL, TMO, ALMO, University or other public body with rental housing - what happens then? As we’ve seen the existing public body structure failed to curb their unlawful behaviour such is the skill they have in circumnavigating the procedures.

It’ll be nice to see some public condemnation of these three given the horrendous treatement of the tenant. Time to show some teeth and give decent PRS LL's an example of the power of your scheme, you'll get them flocking.

Reply to the comment left by "John Daley" at "30/10/2014 - 15:44":

Hi John

Thanks for your reply. I do respect the fact that you are engaging in this debate.

Nevertheless, I am convinced you are wrong. I understand that you have a huge vested interest in the Scheme (you were paid to write it!). I only hope that your consultation process, whilst clearly biased, is sincere enough to maybe listen to the arguments against blanket licensing and consider revising your proposals in response to factual argument.

Before addressing your specific points and then hopefully offering some positive suggestions, I wanted to point out that there is a fundamental question here of where to draw the line between state control + regulation and personal freedoms + privacy.

Your proposal for blanket licensing of the PRS demonstrates a paternalistic / nanny state approach. You want to register, inspect, and license thousands of private homes to transfer authority and control away from private individuals and to Council officers. You know that the cost, admin burden and intrusion of this will fall overwhelmingly on good landlords + tenants and already decent homes. But your view is that imposing on the many is desirable if it helps to unearth and squeeze out the few criminals.

You also believe that even private homes that are safe and where tenants are genuinely satisfied should be checked and made to comply with new Southwark housing standards that go beyond national statutory requirements. This is a view that government "knows best”. You will argue that private individuals interacting in the private rental market will not (in general) result in private rental homes (particularly at the cheaper end of the market) meeting the quality standards that Southwark's officers and some politicians want.

These political philosophy questions of individual freedom vs. general good; of state control vs. free market form a long lasting and valid debate. What concerns me is that the consultation document ignores this debate. It does not even mention that licensing and inspecting thousands of houses is a major intrusion into people homes and lives.

We all want truly criminal landlords dealt with and we all accept that all housing (private and social) should have minimum standards. However, I believe that the PRS is working well and providing Southwark's residents with decent homes and good housing options. I believe good landlords and tenants should have their privacy respected and the Council should only be looking to intrude and take control where there are genuine problems / exploitation etc.

John, can you confirm that a key motivation of your Scheme is to give more control to the Council over the lives of others (principally landlords and residents living in the cheaper third of Southwark’s private rental market)? And that you accept that your Scheme will impose on thousands of residents’ privacy?

Turning to your points:

1. Southwark’s enforcement approach under the current status quo does not have to be solely reactive. Enforcement officers have the right to inspect and appraise under HHSRS any private home. Southwark could therefore target types of rental housing (such as smaller HMOs) in targeted areas. Southwark already can use council tax or voter registration data to identify HMOs. Or they could target houses with rubbish strewn outside for inspections and appropriate enforcement action. Or they could do a flyer campaign explaining that they are targeting poor housing standards in that area and ask residents to anonymously report problems or concerns to the Council via a web link or telephone number.

These are “pro-active” suggestions that would help you to unearth “under the radar” bad landlords and housing problems (probably more effectively than licensing since “under the radar” landlords will not register for licensing (as per Scotland and Newham) so you are still going to have to unearth them Scheme or no Scheme).

2. Furthermore, effective reactive response to PRS housing problems is not wrong. By effectively responding to complaints, tip offs, information from other authorities then Southwark can actually deal with houses and landlords where there is a higher probability of there being an issue that requires their intervention. This means enforcement is targeted. That is likely to be much more effective and useful than simply inspecting every shared home and every rented home in certain “selective areas” house just because it falls inside the Scheme.

Again by saying you want the Scheme to allow the Council to be “proactive”, I think you really mean that you want the Council to take more direct control over the PRS to be able to directly shape its developments and characteristics.

3. Your assertion that there is a group of landlords that “shrug” off penalties worries me. I sense this is more propaganda myth than fact. The Council already has tremendous enforcement powers (see appendix 4 of your consultation document). Please explain me how a bad landlord shrugs off a closure order or a demolition order or a criminal prosecution?

Maybe what you are saying is that you do not think that the Courts impose large enough fines or penalties on housing offenses? This may be an opinion with some merit. However, remember that the Courts operate under sentencing guidelines provided by our elected Parliament. If you / Southwark consider sentencing too lenient, then you should lobby central government to introduce new housing related criminal offenses and / or sentencing guidelines. Southwark could also use the civil Courts.

To try to introduce a licensing Scheme to intentional circumvent Parliament and our independent Judiciary is dangerously undemocratic and an abuse of process.

4. Your assertion that landlords you meet want the “rogues” dealt with is probably true. Most people (even landlords!) want criminals put out of business. However, the idea that good landlords fear “competition” from criminal landlords is nonsense. Good landlords want good tenants and their number 1 fear is renting to bad tenants (some of who are also criminal and rogue). They also fear excessive regulation and fees. Just look at landlord forums such as property118. There are no forum treads on how criminal landlords are threatening good landlords’ rental businesses!

The vast majority of private sector landlords, even at the lower end of the market, strive and invest to maintain and improve their properties (which are their capital investment). Evidence for this can be found in this documentary from the early1960s on housing in Camberwell (in Southwark). It proudly shows shinny Council housing and compares it favorably with dirty decaying period housing stock. Since then the mostly private owned period housing stock in Camberwell has been renovated and maintained, whilst the mostly Council owned estates deteriorated to the point that many blocks in the Camberwell area have been demolished over the last 10 years having lasted only 40 – 50 years (e.g. Heygate estate).

5. You assert that there is a link between property related ASB incidence and density of low rent PRS property. However, repeatedly asserting it does not make something true!

The only thing that your “statistical” analysis appears to show is a correlation between housing density per se and ASB incidence. This is hardly surprising - effectively you just saying that more people means more ASB incidence. Your analysis does not establish a statistically significant correlation between low rent PRS and ASB incidence. And it certainly does not prove causation. Furthermore in the areas designated for elective licensing areas you are not going to only license “low rent” PRS houses. You are going to license all PRS homes – despite you admitting in the consultation that you could not correlate (or link) PRS housing density to ASB incidence.

Newham Council also claimed that PRS homes had on average a higher incidence of ASB. This claim was shown to be false when, after licensing was introduced, they discovered that they had underestimated the size of the PRS by circa 20%. With 20% more private homes accounting for the same amount of ASB incidents, there was no longer a link between PRS and ASB. I don’t think Newman Council cared – by the time he truth came out they already had their desired licensing.

Further in the areas designated for elective licensing areas you are not going to only license “low rent” PRS houses. You are going to license all PRS homes – despite you admitting in the consultation that you could not correlate (or link) PRS housing density to ASB incidence.

The truth is that you have intentionally “worked” the data to try to create an impression of a link between ASB incidence and the PRS. The sole purpose of this is to try to manufacture a legal basis under the Housing Act 2004 upon which to hang your selective licensing Scheme.

You have also mined your data on regulatory activity to try to create a case for your proposal for Borough wide additional licensing. Viewed objectively the data shows that over the last three years the number of regulatory notices issued on private sector rental properties has declined (including on the HMO sector), whilst at the same time compliance with these notices has significantly improved. This suggests that despite the growth in the PRS over the last few years, standards and compliance (even in HMOs) have been improving. This argues against additional licensing across the whole Borough and instead a better focus on the small number of dangerous dwellings / criminal operators.

Clearly this obvious conclusion does not suit your pre-decided ambition to hand more control of Southwark’s PRS to the Council. As such you have deliberately selected the year 2010/11, when regulatory activity was incredibly low, and then calculated alarmist % increase figures by comparing your very low base number with the more normal (but still low in absolute terms) regulatory activity in the following years.

For example in 2011/12 Southwark only prosecuted two landlords. In 2013/14 you prosecuted a record 12 landlords. This is 12 landlords out of a PRS in Souithwark that comprises of 28,500+ propertioes. Most people would say that a max variation of 10 prosecutions in a year over the last 3 years is not surprising and that it is good that Southwark are using their powers to prosecute a few more criminal landlords and this might help to explain the improving compliance with regulatory notices in the PRS and the improving standards. You did not draw these positives inferences from the data. Instead you took the very low base of number 2 and calculated than 12 is 500% higher than 2. You then quote several times in the document that prosecutions of PRS landlords have increased by over 500% in recent years. You have deliberately highlighting this meaningless, alarmist percentage figure as evidence that the PRS is failing, when the truth is the underlying data sows the opposite.

Your reliance on statistical trickery and false scaremongering suggests to me that you don’t have a valid case for additional or selective licensing. I suspect you know that (after all you must know that you have manipulated your data). I also suspect that Southwark council (and yourself) want more licensing simply because you believe that the Council should exert more control and oversight of privately rented homes.

6. The fact that the licensing fee will be spent by the Council on the Scheme is irrelevant. It still represents millions of pounds of additional revenue for the Council which means more jobs, more consultancy work, bigger department, more status. Companies seek to make profits; bureaucracies seek to expand by increasing revenue and spending.

7. The scheme will cost significantly more that £1 per week. The reason is because on top of the licensing fee there is also considerable admin cost associated with licensing. Then there are some expensive and unnecessary new standards (kitchen door viewing panels in large HMOs) and PAT testing for all rented homes in selective licensing areas. Then there is the effect of licensing on discouraging landlords from supplying homes in Southwark. Take all this together and I estimate that tenants of additional and selective licensable homes will face an extra cost of £3 per week. This means your Scheme will cost Southwark’s poorer and more vulnerable tenants an extra £156 per year. I don’t believe this is helping them. I believe this is harming them and will cause instances of homelessly amongst single persons.

In terms of a positive suggestion (as promised) I believe that Southwark should offer all landlords (and particularly HMO landlords) a voluntary accreditation scheme for themselves (or their managers) and their properties. I suspect for you the word “voluntary” in relation to the PRS is anathema! However, it could work if promoted correctly. Give landlords the chance to work with the Council to get their properties and themselves accredited. This would provide them with a good value way of getting a seal of approval that would help with marketing and attracting good tenants, advertising with Universities etc. It was also allow the Council Tenant Relation Officers to better liaise with these landlords in relation to landlord / tenant disputes. These landlords could also be encouraged to inform the Council of the unfair competition that you speak of from sub standard rentals. You could also combine this scheme with a more focused campaign against unaccredited HMOs etc. The Council’s housing department could work with planning enforcement and social services to target particular locations or types of privately rented houses and carry out inspections.

Southwark should speak to Lewisham and Lambeth. There is a lot more than can be done to work with landlords to raise standards and to target enforcement to eliminate criminality and ASB without your indiscriminate and disproportionate licensing Scheme. Please look at the real evidence and facts and consider reining back your proposed Scheme.

Great points Philipp - re the enforcement & prosecution of the 12 do you have any names or a list of the charges? If i was a council getting tough driving out rogues i would publish full details to show others in the sector you mean business and what happens when you don't make the grade, i did try to find out who the 130+ Newham had prosecuted under their selective licensing scheme were as the court service couldn't find these cases. A quick call to the legal team at Newham and they admitted most if not all of the 130 cases were prosecuted for things other than breaches of the 2004 Housing act - the rational behind getting the new powers seems at odds with the outcomes!

Reply to the comment left by "chris wright" at "01/11/2014 - 17:21":

Hi Chris

The fact that the Council undertook 12 housing prosecutions last year is, on its own, largely meaningless. We do not know what these prosecutions were for or even if they were successful. The prosecutions suggest that Southwark is getting tougher with criminal landlords. If so then that is good and welcomed by landlords. Also good is the fact that regulatory notices have been declining over the last 3 years and that compliance with these notice has significantly improved. This fits with survey data and anecdotal reports that the big majority of landlords are responsible and are improving their properties and providing tenants with decent homes that they are happy with.

Somehow this positive picture of Southwark's PRS provided by objectively looking at the data is ignored in the consultation document. Instead the prosecution numbers rising from 2 to 12 has been exploited to create propaganda about prosecutions having risen 500%.

This scaremongering presentation of actually good data on the PRS, plus the lack of other real evidence to justify blanket licensing, leads me to conclude that this whole Scheme is much more about the process than the outcome.

Some in Southwark want widespread licensing simply because they do not agree with a large and growing section of housing provision being outside of their direct control and oversight.

Council enforcement officers already have all the powers that they need. Better co-operation with landlords and more data sharing / co-ordination between Council departments would better achieve the stated objectives of improving housing standards, taking out criminal landlords, and tackling private rental sector related ASB.

If the Council is genuinely serious about improving the outcomes in private sector housing they would rein back (or drop) this Scheme and focus on working with landlords (and tenants) to eliminate dangerous dwellings and tackle PRS related ASB.

I assume Southwark during its early consultation phase rejected other proposals in favour of licensing - i wonder if they've published them (rejected ones), I can't see any reference to them in the documents posted online, have you seen anything?

Reply to the comment left by "Yvette Newbury " at "30/10/2014 - 17:02":

Hi Yvette,

We support the LLAS and all the regulatory schemes but the number of members is so low compared to the numbers of landlords that they have practically no effect on the market as a whole. We have introduced accreditation for landlords who supply property to us but this is simply an internal quality control.

If we were to add up all the landlords who are members of an association or recognised by accreditation it is a total of hundreds compared to the number of landlords which are in the region of 25 000.

The key thing is that all the schemes and associations ar voluntary, which is why they have such low membership. There is no way we can make anyone join anything like an accreditation scheme or any kind of registration. The powers of licensing is the only one available that makes the landlord comply with a given minimum standard.

We have a code of practice, the Southwark Rental Standard, however we can find no way to ensure landlords comply with it outside licensing. We can't say ' you must ' do anything unless we have a power in the law to do so. All the voluntary measures have not had any effect on the deterioration of standards and management that is going on.

Whilst we have a fair idea where PRS properties are, we can not take any action on the vast majority without cause or complaint. There must be a power to take action upon.

The experience of Newham is that the vast majority of Landlords licensed of their own free will. The rest have had to be found and after nearly two years they have had considerable success doing so.

Until licensing activates the power to enter and inspect as a licensing condition we have no idea what the condtion and management is like in the vast majority of properties. That is what will have an effect on the PRS in Southwark.

Reply to the comment left by "John Daley" at "04/11/2014 - 14:00":

Hi John

You say

"All the voluntary measures have not had any effect on the deterioration of standards and management that is going on".

But your own data shows that against a backdrop of strong PRS growth, the number of regulatory notices issued against all privately rented houses and HMOs in Southwark have been declining (and represent less that 1% of rented homes) plus compliance with these notices has been improving over the last 3 years. This shows an improvement in standards and compliance.

Where is your factual evidence of a "deterioration of standards and management that is going on". There is no real evidence of this in your document. Just a few anecdotal "case" studies and your alarmist assertions and twisting of data.

It seems you want to pretend Southwark's PRS is much worse than it really is purely to provide justification of imposing more control of private landlords and tenants via licensing.

Accreditation schemes in Southwark have never been promoted or any effort to make them useful or attractive. Southwark has a whole team of Tenant Relations Officers - but not one Landlord relations or liaison officer.

Why do you and Southwark not give any consideration to alternative tools, schemes, collaboration? It can only be because you do not want anything else aside for licensing and so your document completely ignores consideration of alternatives.

As for the idea that Newham landlords signed up and paid their fees "voluntarily" this is poppycock! They signed up because they had too - they did not want to be criminal and they did not want £20K fines.