Improving private sector housing via licensing

Consultation May 2021

We’re consulting now (May to July 2021) about the future of licensing in the private rental sector from June 2022, so we can focus our resources where they’re most needed.

Have your say

All enquiries to: Ed Shaylor, Private Sector Housing Manager
07769 265756
ed.shaylor@lbhf.gov.uk

Summary

The private rented sector in Hammersmith & Fulham is the sixth largest in London, and eighth biggest in the country. It makes up nearly a third of all borough households (according to the 2011 census), a 10% rise since 2001. The 2021 census is expected to show a further increase in the number of privately rented flats and houses in the borough.

To help improve the sector, the council has a Landlords’ Charter, with discounted licence fees for landlords who sign up, or who belong to the London Landlords’ Accreditation Scheme or a recognised landlords’ association.

In 2017 the council introduced two licensing schemes, requiring landlords to apply to the council for a licence. Both expire in June 2022. 

  • One is an additional licence for houses and flats in shared occupation (HMOs) for any lets outside the standard arrangement
  • The other is a selective licence covering rented homes in 128 named streets, to reduce antisocial behaviour in areas where it’s seen to be a problem

The proposal is to continue with Additional HMO Licensing for all HMOs not covered by Mandatory HMO Licensing, and to substantially reduce the number of streets in the Selective Licensing scheme from 128 to 23, in order to focus on busy roads, flats above shops, and roads with a significant private rented sector.

  • Legal background

    In law, H&F Council has to licence shared flats and houses. In October 2018, the definition of dwellings which need that licence widened to include homes under three storeys, if occupied by five or more people living in two or more separate households (in other words, not related to each other). It doesn’t apply to flats in purpose-built blocks of three or more self-contained flats.

    The council can declare the whole, or part, of any area as needing additional HMO licensing if it believes it isn’t being managed well. That could include HMOs occupied by fewer than five people, or flats in purpose-built blocks.

    In areas where antisocial behaviour, crime or sub-standard housing are issues, the council can introduce selective licensing. It might include noise, litter, fly-tipping or pest control. Those changes mainly affect busy roads and flats above shops.

    If the number of privately rented houses and flats in streets chosen for selective licensing is more than 20% of the borough’s total private rentals, approval is needed from government. 

    Before designating roads for additional or selective licensing, the council has to consult residents, tenants, landlords, managing agents and business people in and around the area, and keep everyone informed about the results.

    Some landlords believe licensing has improved standards in the private rented sector, while others don’t think it has made much difference, and is only an extra tax. 

  • Review of 2017-22 Designated Schemes – general issues

    1, The council’s 2015 Housing Strategy set out ways of improving the private rented sector, including the pros and cons of discretionary licensing schemes.

    2, A review found that 11% (128) of streets in the borough account for 26% of the police call-outs, crime, environmental nuisance, litter and fly-tipping, and that there was a link between the private rented sector and antisocial behaviour. Top of the list of concerns were rubbish dumping, rubbish collection and storage, noise, untidy properties and pests or vermin.

    3, There were also worries that smaller multiple occupancy homes were overcrowded or even unsafe.

    4, A decision was made by the council in December 2016 to introduce discretionary property licensing.

    Here are the facts, from June 2017 to March 2021.

    • H&F has 25,800 rented homes (30% of households)
    • The 20% ceiling for selective licensing is therefore 5,164
    • In all, 2,900 selective licences have been issued (71% of the 4,110 target), while 2,800 additional licences have been issued (68% of the target)

    5, Between June 2017 and March 2018, 2,000 licence applications were received after the new scheme was publicised. Licences began to be issued in April 2018, although the sheer number meant there were some delays.  Landlords were told that once they’d applied, they wouldn’t risk being fined.

    6, Where a flat no longer needs a licence before the issue date, landlords are refunded 50% of the fee paid. So far 74 refunds have been made.

    7, The council has simplified the process to speed things up. By 31 March 2021 all licences applied for by the end of 2020 had been processed and issued. From January 2021, applications have been taking less than 12 weeks.

    8, The success of the scheme is partly down to landlords complying with council conditions and minimum standards. Following feedback from landlords, the rules were made clearer.

    9, The new minimum standards and licence conditions are easier to understand and enforce. They can be found on the council website, see Property licensing for landlords and letting agents

    10, A new H&F landlords’ charter was launched in 2017, with landlords who sign up receiving a discount to their licence fee. Around half of licence holders have signed up to the charter, or belong to recognised landlords’ professional associations.

    11, In a 2020 survey of licence holders, a third said the scheme had improved the private rented sector, and 75% said they had made improvements to flats.  However, two thirds of landlords felt that the schemes hadn’t made a difference. A summary is at
    Appendix 2.

    12, Most landlords have complied, with 70% of expected applications received. Officers are working to identify flats which should have been licensed but haven’t been, and will issue enforcement notices.

    13, Since 2017 the council has prosecuted four landlords under the licence schemes, with fines totalling £92,000. It has issued three fixed penalties totalling £25,000, with two prosecutions pending.

    14, Street-level surveys in roads which are part of the current scheme, or could be, have provided valuable information about unlicensed properties and problems with housing conditions, leading to the recommendations in Appendix 4 of streets to include in a new scheme. 

  • Review of 2017-22 schemes - Selective Licensing

    15, The scheme means many properties have been licensed, giving officers information about properties and highlighting unlicensed properties if there are reports of nuisance behaviour.

    16, Problems with antisocial behaviour, noise, poor waste management and public health nuisance are easier to address if specific streets are designated, to target resources.

    17, Powers already exist to deal with antisocial behaviour, noise etc, and these can be used wherever problems crop up.

    18, Out of the 128 streets in the designated area, 10 have not produced any licences and 54 have produced under five. There is little evidence of substantial numbers of unlicensed properties in those streets. So half the streets in the designated area generate less than 10% of the total number of selective licences. With such small numbers, it’s unlikely licensing will make a significant difference, so it is being recommended to remove those streets. See Appendix 3.

    19, New research compares nuisance and antisocial behaviour in streets on the list from 2014-16 and 2017-2020. It has led to a revised list. See Appendix 4

    20, Flats in converted houses and flats above shops which are not regulated properly are top priority.

    21, If multiple occupancy is banned because of terms in a lease, a licence is limited to two years rather than five. In that time, the licence holder is expected to stop using the flat for multiple tenants, or get permission from the freeholder. The same applies to council flats.

    22, Some council flats meant for families have been found to be sub-let to multiple tenants. The council is getting tough on that as they can be a fire risk.

    23, So purpose-built flats are being included in selective licences, except for council tenants, social housing or letting to the leaseholder’s close family or friends who aren’t charged rent.

    A list of council-owned blocks in proposed selective licensing streets is at Appendix 5.

  • Review of 2017-22 schemes - Additional HMO Licensing

    24, It was never intended that all licensed multiple occupancy flats would be inspected, as landlords are expected to stick to minimum standards and up-to-date fire regulations. The new standards are clearer and easier to enforce. They can be found on the council website see Property licensing for landlords and letting agents.

    25, Inspections of licensed HMOs since 2017 have resulted in better fire safety and an end to the use of bedrooms under 6.5 square meters by adult occupiers. Many houses and flats designed as family homes are being used for multiple occupancy, leading to crowding and fire risk.

    26, Most of the 170 inspections of additional licensed HMOs met the rules:

    • Some licence holders were inexperienced, and didn’t fully understand the rules.
    • About 10% lacked basic amenities, such as a kitchen too small for the number of sharers.
    • About 10% are traditional 3 or 4-bedroom houses or flats where the smallest bedroom is less than 6.5sqm; too small to be used by an adult. This often leads to one fewer flat-sharer being allowed.
    • Many landlords have applied for a licence for too many people, meaning that the reception room becomes another bedroom. This should only be allowed if there is a large enough kitchen/living space for socialising.
    • More than 75% have smoke alarms on each floor, complying with minimum standard rules, although the Housing Health and Safety Rating System calls for higher standards of fire detection in shared homes. Many do not have fire doors or heat alarms in the kitchen.
    • Many ex-council flats have been altered, and multiple occupancy licences sought. In some cases, the alterations are unsuitable or unsafe.

    27, These problems can be challenged by officers through the licensing process, to make sure shared accommodation is not only up to scratch, but also safe.

    28, Mandatory HMO licences have been in place since 2006 to license larger properties which potentially pose a higher risk. An inspection would normally be carried out before issuing the licence, but this has been delayed because of the sheer number of applications. 

    29, Some flats of three people are three friends sharing, or a couple and a friend.  These are less likely to be a problem. They could be made exempt, but this would be difficult to implement.

  • Equality Implications

    30, Council data shows that 64% of landlords are White British or other White background; similar to the borough population. Numbers of Asian (8%) and Irish (3%) landlords are smaller, but also match borough profiles. There are very few landlords of Black British, Caribbean or African ethnicity.

    31, Nearly half (45%) of landlords are aged 46-65, with 16% aged 31-45. A fifth of landlords are over 65.

    32, The housing stock of the borough includes many flats and maisonettes, accounting for 73% of all dwellings compared to a London average of 52% and an English average of 21%. The highest concentration of private rented homes is in Avonmore & Brook Green and North End wards (43% of all households).

    33, Some of the proposed streets fall into the 20% most deprived areas in England and most are in the top half. Appendix 7 and Appendix 4 have more details.

    34, The proposed streets mainly cover these wards:

    • Addison and Shepherd’s Bush Green (5 streets)
    • Askew, Avonmore & Brook Green (4)
    • North End (3)
    • Ravenscourt Park, College Park & Old Oak, Fulham Reach, Parson’s Green & Walham and Wormholt & White City (2)
    • Fulham Broadway, Munster and Sands End and Town (1)

    Only Hammersmith Broadway and Palace Riverside have no proposed streets.

  • Underpinning data

    This spreadsheet shows the data on which the proposal to include 23 streets in the Selective Licensing scheme is based.  It compares data for Police and Council ASB reports in every street in the borough, and also fly tipping and noise nuisance reports.  There is commentary from street surveys carried out by officers in the first half of 2021.

    H&F Selective licensing data sheet 2021 compared to 2016 (336 KB xlsx)