Agenda item

Further to Minute No. 53(2) of the meeting of the Improving Places Select Commission held on 26h March, 2014 and Minute No. 236 of the meeting of the Cabinet held on 9th April, 2014, consideration was given to a report presented by the Strategic Director of Neighbourhood and Adult Services, which provided details of the consultation feedback about the proposed selective licensing scheme for landlords of private rented housing and included recommendations based on the responses, comments and representations made. The report stated that approximately two-thirds of residents’ responses had expressed their support for a mandatory selective licensing scheme, although local landlords expressed opinions against such regulation.

The scheme was under consideration because of the Council’s wish to secure an effective and efficient way of dealing with the issues which occur with private rented sector housing. The proposals consulted upon were that Selective Licensing designations under the Housing Act 2004 should be introduced in three areas of the Borough:-

- Rotherham Central (including the Town Centre, Canklow, South Central and Boston Castle, Eastwood and Masbrough)

- Dinnington

- Maltby South East

The report, which included options for the introduction of either a mandatory selective licensing scheme or a voluntary local scheme, is intended to be submitted for further consideration at the meeting of the Cabinet to be held on Wednesday, 24th September, 2014. Consideration was continuing as to which approach would be the preferred way forward to ensure the objectives of the proposal would be achieved.

The Select Commission’s discussion of this issue included the following salient matters:-

: the scrutiny review of housing in the private rented sector (2012);

: the range of legislative powers available, which enable the Council to fulfil its responsibility to take action against irresponsible housing landlords (eg: HHSRS enforcement; management orders; compulsory purchase of property);

: the Council’s previous attempt to introduce a voluntary licensing scheme had not succeeded because of a low level of take-up by landlords and an over-reliance on the Borough Council to resource the sceme;

: the key elements of a mandatory scheme (eg: areas of low housing demand and high turn-over of tenants and where there is a high incidence of anti-social behaviour linked to rented housing);

: the various consultation meetings held, responses received and online communications received, about the proposed licensing scheme;

: the consultation responses received from residents showed that a large majority of residents were in favour of a selective licensing scheme; by contrast, the responses showed that the vast majority of landlords were not in favour of such a scheme;

: the Council’s dialogue and engagement with residents, with landlords and with landlords’ associations;

: the Council’s dialogue and engagement with managing/lettings agents (who act on behalf of landlords) and the responsibility of such agents for maintaining acceptable housing standards;

: the legal requirement, embedded in central Government guidance, for the Council to consider any other course of action that might provide an effective method of achieving the objectives;

: details of the landlord-led voluntary quality landlord scheme (as described in the report); it was noted that this scheme was initiated by landlords’ organisations and, if implemented, would be administered on a commercial basis by a third party and not by this Council;

: the number of responses received as part of the consultation process and the validity of the conclusions drawn from those responses;

: consideration of the proposed fee to be payable by licensed landlords; the business case for the scheme contains an estimated cost of £687 for a landlord, for a licence lasting five years; the fee would be for administrative purposes and not profit-making;

: the Council’s enforcement resources for a mandatory scheme are likely to be two full-time equivalent enforcement officer posts (and there may be other costs incurred); on this basis, a recurring annual cost of £70,000 was being estimated; this cost should be compared against the current cost to the Council (and to other public sector services) of dealing with residents’ complaints about the standards of private rented sector housing and with the consequences of the problems posed by irresponsible landlords;

: the analysis of the ethnic background of people who had responded to the consultation;

: the relative merits of introducing a licensing scheme in a selective, local area and of introducing a scheme which covers the whole Borough area;

: the possibility of the Council’s eventual decision, to introduce either a mandatory or a voluntary licensing scheme, being the subject of a legal challenge;

: alternative means of ensuring that landlords will register with the licensing scheme to be introduced and will remain registered in the future;

: if a Borough-wide voluntary scheme was introduced by the landlords’ organisations, the Council would require its performance to be monitored utilising a set of key measures including take-up in both the prioritised areas and throughout the Borough area;  variance from those success indicators would result in further consideration of the possible introduction of a mandatory scheme;

: the licensing scheme will include education and training for landlords, as well as inspections of properties; such a scheme may prevent the spread of housing blight and also provide assistance in reducing the level of homelessness in the Borough, for example, by means of earlier identification of empty properties available for occupation;

: whether the information in the register of licensed landlords will be made available for tenants and prospective tenants;

: questioning the impact of the licensing scheme upon housing rents (the possibility of a consequent increase in rents was acknowledged); questioning whether the licensing scheme would be necessary if landlords were required to utilise authorised lettings/management agents; the possibility of the scheme including discounted fees for landlords who utilise managing agents was discussed; currently, there was no registration scheme for lettings/management agents.

In conclusion, the Improving Places Select Commission acknowledged that the Council has a duty to try and resolve the issues affecting private rented sector housing in the areas highlighted in the report. Accordingly, the Select Commission both recognises the benefits of a mandatory licensing scheme and understands that currently there are reasons to consider the introduction of a voluntary local scheme.

Resolved:- (1) That the report be received and its contents noted.

(2) That, insofar as the Improving Places Select Commission is concerned, the introduction of a landlord-led voluntary quality landlord scheme is the preferred option. *** see footnote below

(Councillor Wallis declared a personal interest in the above item, as the owner-occupier of residential premises in one of the areas which was the subject of public consultation in respect of the proposed licensing scheme)

*** footnote

At the subsequent meeting of the Improving Places Select Commission, held on 16th September 2014, the following amendments were made to the above minute, by the deletion of resolution (2) above and the insertion of the following two resolutions:-

(2) That the Select Commission agrees that there was a need for action with regard to private sector rented properties in the areas identified by officers.

(3) That where there was legal advice that the Local Authority had to pursue a voluntary scheme that be the first course of action, however, should that fail the Select Commission would wish to see the Council move to a mandatory scheme as quickly as possible.