Agenda item

The Panel considered the report of the Scrutiny Manager concerning Southampton City Council’s approach to enforcement of the private rented sector.

The Panel received the following representations:

Steven Hayes-Arter, Service Manager for Private Sector Housing and Port Health, Southampton City Council outlined the Council’s approach to enforcement. Key points raised in the presentation included the following:

·  Reactive inspection of properties using Housing Act 2004 Part 1 powers (HHSRS) - only where tenants have made complaints or raised issues. This includes HMOs (not covered by licensing) and all other private rented accommodation.

·  All work is carried out across two teams – Private Sector Housing and HMO Licensing. The PSH Team consists of 3.5 FTE, the HMO Licensing Team of consists of 6.5 FTE funded by licence fees. Therefore there are ten FTE covering enforcement of a sector of approximately 28,000 properties.

·  Demand for services and lack of resources means that all PSH service requests are triaged. Aninspection is only carried out where a likelihood of significant hazard (Cat 1, HHSRS) is identified.

·  There were only 489 complaints in 2022/23 and 2,180 complaints since 2019/20. Only 88 of the complaints led to an inspection in 2022/23 (18%).

·  In 2022/23 only six enforcement notices were served by the PSH Team and 72 in total since 2019/20.Notices are generally issued after required work is not completed. No Civil Penalty Notices (CPNs) were issued by the City Council.

·  There is a legal requirement for local authorities to license larger HMOs in their area, namely all HMOs with five or more residents from two or more households. In the City there are between 2300- 2500 mandatory HMOs, which require licensing every five years, out of approximately 6000-7000 HMOs.

·  The majority of the HMOs are situated within the central wards of the City, predominantly in Bevois, Bargate & Portswood.

·  Regulations impose certain mandatory conditions that HMOs and licence holders must meet. Southampton City Council has its own published HMO standards that cover all HMOs in the City, including those not requiring licensing.

·  Every HMO is inspected prior to a licence being issued by either a City Council HMO surveyor or an Accredited independent Surveyor (CIEH or RICS certified).

·  Failure to comply with any condition is a breach of the licence and can result in enforcement action and ultimately the revocation of the licence. Fifteen HMO landlords have been prosecuted since 2014, but none for eight years.

·  Southampton City Council has also operated three additional HMO licensing schemes in certain wards within the City over the past ten years. Additional licensing schemes allow local authorities to licence smaller HMOs, and ‘cluster flats’ within purpose-built student blocks, any HMO with three or more persons forming two or more households. Schemes have covered the four central wards of Bevois, Bargate, Portswood and Swaythling and also the western wards of Shirley, Freemantle, Bassett and Millbrook. The most recent scheme covering the central wards ended on 30^th September 2023. Additional schemes can only run for five years and run on a ‘cost recovery’ basis.Schemes must meet with prescribed conditions set out in the Housing Act 2004.

·  The first designation was made in 2013 in central wards. The majority of the evidence used for justification of the scheme came from a 2008/9 Stock Condition and HMO survey of the City. That scheme resulted in about 3600 licensed premises and at the end of five years the compliance rate with conditions was at 62%.

·  The second designation in western wards was introduced in 2015. Only 600 premises were licensed by the end of that scheme in 2020. Compliance rates were very high at 80%.

·  The third designation was introduced in Autumn 2018 covering the same central four wards as the first scheme.Overall compliance was very high, ending at approx. 90%. Success of the scheme however makes further designations less easy to justify. In order to satisfy the legal tests, a robust case is needed to show that licensing is the most effective tool to ensure sufficient management of HMOs.

·  Previous additional licensing has captured about 2800 HMOs across the city. (Mostly within the central spine). In conjunction with mandatory licensing it has resulted in about 5000 HMOs out of the estimated 6000-7000 in the City being covered by licensing.

·  HMO licensing is an effective tool in managing the condition and impact of HMOs. In Southampton, licensing of HMOs has led to a 75% reduction in complaints from tenants relating to their conditions over the past ten years.

·  Southampton City Council is proposing a further additional designation in 2024 to capture the majority of the City’s HMOs (in eight wards) to keep standards high. Designation would capture between 2800-3000 HMOs including all of the Purpose-Built Student accommodation blocks.

·  Ideally Southampton City Council would have new data sets for the City from a more recent stock condition survey to support the case for a new designation. So far this has not been commissioned due to costs of about £500,000 far exceeding budget of £125,000.

·  Selective Licensing can be used separately or in parallel with additional HMO licensing. It would require legal tests to be met, which are similar but not the same as for additional HMO licensing. It is more challenging to gather evidence, as lots of data is required, and ideally a stock condition survey is needed.

·  It has the potential to target parts of the sector that are otherwise hard to reach or engage with, such as the smaller non-HMO market.

·  It can also be used to raise income for private sector housing enforcement work and lead to increased enforcement activity. Whilst resource intensive and costly to set up, there are options to ‘outsource’.

·  About 20,000 private rented properties are not covered by HMO licensing schemes. No landlord registration is required so that sector can slip under the radar of the Council.

·  Selective licensing can target some or all of these, depending on the ambition of a local authority. Larger schemes capturing more than 20% of the sector require Secretary of State approval but small schemes do not. Many local authorities start small, targeting a small number of wards.

·  In Southampton the wards most likely to meet the criteria would be the central areas. This could mean certain wards would require all PSH & HMOs to be licensed.

·  Selective licensing could therefore be a useful tool to tackle the sector in the city.

·  There are future plans and challenges. New guidance on damp and mould and changes to HHSRS; Current and future work programme around high-rise fire safety; Renters Reform Bill will see biggest shake up in years to private renting; Increased focus on rent repayment orders and decent homes standard extended to PRS likely to see increased demand on PSH team resources. The abolition of s21 evictions may also result in an increase in complaints due to tenants being more confident to report issues.

·  The Renters Reform Bill will introduce Decent Homes Standards likely to be implemented in late 2024. New powers will be granted to require landlords to make properties decent. The expectation is that local authorities will prioritise private rented sector enforcement. Many houses will not meet the standards and demand for inspection and assessment will probably be high.

·  Government will be publishing new operating and enforcement guidance for local authorities with the potential for significant impact on the PSH Team and Southampton City Council’s resources. Ideally additional funding will be made available to resource this work.

·  Standards are at risk of falling if enforcement of the sector is not prioritised appropriately. The service therefore needs to be effectively resourced and all available enforcement tools need to be considered.

·  Future additional HMO licensing and selective licensing within the City are the most appropriate tools currently available and need to be considered.

Cecilia Kovacs, Southampton Tenants Union, outlined the tenants’ views. Key points raised in the presentation included the following:

·  The Tenants Union support licensing of all the private rented sector in Southampton, not just HMOs.

·  However, licensing is not enough. Tenants need an outlet to report disrepair.

·  Timescales currently can mean tenants in homes with disrepair can be susceptible to prolonged danger of harm and health issues, even death. Legal support is inaccessible.

·  The Tenants Union offered to help capture issues in Southampton in support of a future stock conditions survey or selective or additional licensing schemes.

Rogel Bell, South Hampshire Chair, iHOWZ and Liz Mackenzie, Regional Representative, NRLA, outlined the landlords’ views. Key points raised in the presentations included:

·  The Southampton City Council enforcement team is constructive and helpful.

·  The HMO licensing schemes have driven bad landlords out of the market.

·  Enforcement has been adequate and the use of Chartered Surveyors is valued.

·  More resources to enforce licensing schemes, standards and conditions would be beneficial.

·  iHowz would welcome selective licensing schemes in Southampton.  There is a need for more landlords to become accredited with reputable landlord associations to raise standards.