•  0115 9502639

EMPO’s response to Nottingham City Council’s Additional Licensing Consultation

Article by Adeela Ahmed on May 04, 2013 View in browser

EMPO’s response to Nottingham City Council’s Additional Licensing Consultation

Question 4: Write use the space below for any comments you may have about: the proposal to implement an additional licensing scheme, the proposed designation area, license fee and conditions or any other views.

OVERVIEW

East  Midlands  Property  Owners  (EMPO)  is  the  leading regional  landlord association representing and supporting landlords across the East Midlands. We provide  landlords,  letting  agents  and  property  investors  with  the  advice, knowledge and tools necessary to be more professional in terms of landlord and housing management.

EMPO is frustrated and disappointed with the lack of any invitation for early or mid  term  consultation  by  Nottingham  City  Council  (NCC)  with  regards  to  this proposal.  We  are  scathing  in  our  view  on  why  NCC  is not  able  to  enforce standards within existing legislative frameworks. Rather than imposing upon the large majority of good landlord’s costly additional obligations. It will be the case under  this  proposal  that  good  landlords  end  up  effectively  paying  for  the problems that have  been caused by the  non-compliant landlords, on  whom we think it is more appropriate to concentrate.

What we find absolutely baffling about this proposal to regulate smaller HMOs is that the overall HMO numbers are in decline, particularly the largest segment in the  city;  student  HMOs.  This  decline  is  being  fueled  and  encouraged  by  the councils much lauded approach to the development ofcity centre purpose built student blocks. There are already 45 blocks operating in Nottingham with at least another 15 in development. Presently there are 4500 bed spaces available with at least another 1500 coming online by 2014/15. With this all going on one has to ask  the  question  “Why  is  the  council  proposing  to  implement  a  costly  and widespread  regulation  within  a  declining  HMO  housing  sector.  When  public money  could otherwise  be  better  spent  on  real  priorities such  as  closing down criminal  landlords  and  or  policing  the  problems  that  will  arise  from  the  shift  of population into the city?”

EMPO  believes  additional  licensing  will  not  have  the  ability  to  make  non-compliant  landlords  comply.  The  assumption  those  landlords  who,  in  the  past, have  shown  no  willingness  to  comply  with  current  regulations  directed  at  gas, electrical  and  anti  social  behaviour  (ASB)  are  then going  to  comply  with  any additional regulations is sheer fantasy.

.Non compliant landlords are criminal landlords. The armory of legislation already in place is broadly criminal legislation, and  therefore should be actively utilized and enforced by NCC against these criminal landlords.

We  have  seen  how  a  lack  of  enforcement  activity  under  Article  4  legislation introduced  into  Nottingham  in  March  2012  is  allowing  landlords  to  operate illegally and therefore making a nonsense of the legislation.

There  are  a  growing  number  of  local  authorities  –  such  as  Bournemouth, Manchester,  Leeds  and  Westminster  who  are  rejecting licensing  in  favour  of progressing  with  local  landlord  accreditation  schemes.  These  schemes  allow landlords  to  self-regulate  and  local  authorities  to concentrate  their  efforts  on tackling criminal landlords. This is a position supported by EMPO, which has long argued that local authorities have enough powers todeal with issues relating to the private rented sector, and that licensing is another layer of bureaucracy that simply will not work.

NCC Executive Board Document – 18th December 2012

The  claims  in  this  document  that  additional  licensing  will  provide  the  following benefits:

  • an  opportunity  to  effectively  influence  higher  standards  of  HMO accommodation  and  to ensure  effective  management  through  more extensive control;
  • and lead  to  higher  levels  of  customer  satisfaction  with  private  rented sector accommodation within the city.

This is simply not true. There is very little evidence, if any at all, confirming since the  introduction  of  mandatory  licensing  there  has  been  higher  standards  or  an improvement in the management of HMOs. On the contrary, there are still large numbers of 5 bed HMOs in the city that have not been licensed. Those that have been  licensed  under  the  mandatory  licensing  scheme  continue  to  present problems  in  relation  to  the  standard  and  management of  those  properties  as clearly illustrated in the council own complaints database.

No evidence has been submitted supporting the claimthat licensing will lead to or  has  lead  to  greater  customer  satisfaction  in  the PRS.  As  the  voice  for landlords in Nottingham EMPO are aware large numbers of tenants, even those that  live  in  mandatory  licensable  properties,  have  no  knowledge  that  licensing even exists. In our view licensing has not given the council any greater powers above those that exist already in housing legislation.

The council cites in this document ASB is a major driver for introducing additional licensing  across  Nottingham.  While  providing  little specific  or  robust  evidence through their much lauded flare complaints databasethis problem is actually an issue within non-mandatory HMOs. In fact during thelast 18 months the council has featured regular articles in the Nottingham Arrow publication stating a decline in  ASB  and  crime  in  Nottingham.  We  remind  the  council  the  complaints  data provided as part of this consultation is required to address the key precondition laid  down  in  the  Housing  Act  2004,  namely  linking  perceived  problems  with HMOs that are not subject to mandatory licensing.

Sadly ASB is a growing UK wide societal problem arising from people failing to take ownership of their responsibilities in terms of integrating, respecting others and taking pride in their communities. We strongly believe the council is trying to use additional licensing as a fix to cure all of society’s problems.

We remind the council that matters raised in the document concerning the poor condition and disrepair of HMOs, have to be addressed via the Housing Health & Safety Rating System (HHSRS). The Housing Act 2004  stipulates that generally license conditions should not be relied on where the use of HHSRS powers can be  enforced.  If  there  are  issues  regarding  unsightly  appearance  they  can  be addressed  by  notices  served  under  section  215  of  the  Town  and  Country Planning Act.

We must remind the council that issues around waste and refuse in the vicinity of HMOs  is  something  that  can  be  dealt  with  by  other  powers  and  perhaps  by  a common sense approach such as an improved council refuse service especially when students come and go at the beginning and end  of the academic year. A recent claim by a spokesman from NCC stating Nottingham was the cleanest city in the UK begs the question why this is an issue being relied upon to introduce an additional licensing scheme.

We  remind  the  council  that  issues  around  noise  complaints  can  be  dealt  with under  the  Environmental  Protection  Act  1990  and  the Regulation  of  Noise  Act 1996.  Nuisance  law  is  criminal  law,  and  appropriate measures  including prosecution of the offender can be taken in the last resort to prevent the nuisance from re-occurring.


In fact since mandatory licensing was introduced in2006, no review or report has been  commissioned  by  NCC  to  illustrate  the  effectiveness  or  impact  of  the scheme.  Despite  Communities  and  Local  Government  (CLG)  guidelines  on additional  licensing,  that  a  review  of the  existing mandatory  licensing  scheme must be done before additional licensing is introduced.


NCC Proposal for Additional Licensing Document 25 February to May 20th2013


There  is  no  relevant  evidence  put  forward  to  support  the  proposal;  with  the statistics quoted in the consultation being “irrelevant” “spurious” and “misleading.” The examples relating to the number of gas and electrical safety checks do not include  the  overall   numbers  of  HMOs  involved;  therefore  making  them meaningless  as  statistically  some  landlords  will  bring  forward  inspections  to ensure re-inspection does not occur. The examples relating to category 1 and 2 hazards  are  equally  meaningless  as  there  is  no  detail  on  the  total  number  of landlords and HMOs these hazards relate to. Other key elements of the proposal such  as  the  financial  model  are  lacking  in  detail  and  fail  to  achieve  value  for money for the tax payer.


The proposal does not contain any measurable aims or objectives or a clear exit strategy  once  the  licensing  scheme  lapses  in  five  years.  Providing  a  simplistic questionnaire as part of the consultation is outrageous and does not represent a serious attempt to consult with stakeholders in this debate. Proper consultation means  the  whole  aspect  for  the  reasons  for  considering  additional  licensing should  be  broken  down  to  examine  the  real  issues  impacting  communities.  As well as the individual areas to which the scheme isto be applied. Only then can justification  be  given  to  the  validity  of  additional  licensing  as  a  definite  tool  to solve these issues.


Guidance provided by CLG stipulate that robust evidence needs to be gathered to prove the need for a scheme and extensive consultation is needed to seek the views  of  residents  and  landlords  in  the  proposed  areas.  The  promotion  of  this proposal has been a total travesty consisting of a narrow campaign of marketing awareness  through  the  council  website,  a  random  resident  leaflet  drop  and  an advert  in  the  University  Newspaper.  Apparently  there  has  been  no  advertising coverage  in  the  main  local  newspaper  The  Nottingham Evening  Post due  to a long standing dispute between the council and the Nottingham Evening Post.

Furthermore guidance stipulates the council needs to demonstrate that they have tried other strategies to address the problems around smaller HMOs and again there  has  been  a  failure  to  provide  detailed  information  concerning  this  point within the consultation document or any document issued around the proposal.

The implications of this proposal on landlords with properties within these areas are immense. Notwithstanding the cost of applying for the license, any inspection undertaken may result in an enforcement order to alter the property which could run into thousands of pounds and be totally irrelevant to the 'type' of households actually living there.

The cost burden associated with this proposal will be passed onto tenants in the form  of  higher  rents.  Adding  to  the  huge  financial  hardship  many  tenants  are already  experiencing  due  to  welfare  reform  and  increases  in  household  living expenses. Contrary to the NCC claim that this proposal will enable it to achieve its  goals  in  terms  of  housing  the  homeless.  Landlords  who  would  normally consider  housing  benefit,  unemployed  and  homeless  people  in  HMO  style accommodation  will  no  longer  consider  this  as  an  option,  simply  because  the risks  of  rent  arrears  and  ASB  associated  with  them  will  make  such  tenants commercially too risky under this proposal.

This  proposal  will  significantly  impact  the  ability and  appetite  for  investors  to consider Nottingham as being an option for providing rental housing. There is a huge  fear  amongst  landlords  that  the  continued  roll out  of  regulation  and interference  by  NCC  will  make  housing  investment  in the  city  an  unattractive option.

Furthermore  this  proposal  will  do  nothing  to  improve  communities  and  in  fact have the opposite affect as these areas will be regarded as bad areas. Where families  chose  not  to  purchase  property,  property  investors  do  not  invest  and mortgage lenders such as Lloyds and RBS do not lend. If other lenders follow the route  taken  by  Lloyds  and  RBS  we  will  see  more  sellers  struggling  to  sell properties  therefore  further  negatively  impacting  sellers  and  areas  already blighted by Article 4 regulations.

Conclusions

EMPO, believes due process has not been followed and if the scheme is adopted we  will  seriously  consider  subjecting  it  to  a  legal challenge.  The  fact  that  this scheme  will  capture  a  widespread  area  of  Nottingham is  of  particular concern. Particularly  when  by  the  councils  own  admission  they  are  failing  with administration  such  as  processing  licensing  applications  and  conducting inspections in a timely fashion under mandatory licensing.

Year after year we have been informed that both UNIPOL and DASH have had huge positive impacts on housing and in fact last years Nottingham Housing Plan document  applauds  the  success  of  the  accreditation  schemes  covering Nottingham.  Under  this  proposal  the  council  is  now  saying  these  accreditation schemes have not been effective in stemming HMO complaints.

We believe the level of and the way the problems have been  presented in the proposal  do  not  in  any  way  justify  the  imposition  of  additional  HMO  licensing. The  resulting  bureaucratic  procedures  and  costs  would  be  totally  disproportionate to the kind of issues highlighted.

The principle that NCC should adopt is to encourage landlords into accreditation schemes,  and  target  those  that  remain  outside.  Rather  than  focusing  on  a scheme  that  would  capture  good  landlords  while  allowing  criminal  landlords  to continue operating with impunity. This approach would increase the willingness 6for EMPO and Nottingham landlords to  engage.Therefore we ask the council to immediately  reconsider  its  proposal,  leaving  the  route  clear  for  the  majority  of Nottingham’s good landlords to productively work with the council in supporting workable  measures  such  as  the  Nottingham  Standard  to  improve  standards across the private rental sector.

Download this article as a PDF