Purpose

At Cabinet on the 12th February 2025,
the Executive Mayor and Cabinet RESOLVED to
endorse that the Council consider a selective licensing scheme in
the private rented sector and delegated authority to evaluate a
potential scheme and, if appropriate, propose and consult on such a
scheme The scheme is one of the options available to
tackle poor conditions in the private rented
sector.

Authority is also sought, to proceed to public
consultation on the proposal to designate a borough-wide Additional
Housing of Multiple Occupation (HMO) scheme for privately rented
properties in Croydon.  The aim of the
designations is to improve property standards and property
management in the private rented sector (PRS).

Content

RESOLVED:

1.    
To approve the commencement of consultation which
will include residents, partners, the Mayor of London, and those
potentially affected by the proposals to introduce a selective
licensing scheme and an additional HMO scheme for privately rented
properties.

2.    
To agree that the consultation on the proposed
licensing schemes will run for 12 weeks commencing in the middle of
October 2025.

 

Reasons for the decision

At Cabinet on the 12th
February 2025, the Executive Mayor presented a paper outlining the
Council’s intention to consider introducing a selective
licensing scheme to address poor housing conditions in the PRS in
Croydon.  Following a review of the data
and in line with the statutory requirements, the Council is
determined to take action to tackle poor conditions and poor
management that has been identified in privately rented
property.  This report outlines the
conclusions and makes recommendations to proceed to consult on a
discretionary housing licensing scheme/s.

Part of the Mayors Business Plan 2022-2026 supports
the introduction of a selective licensing scheme to improve housing
standards in the PRS and aligns with Outcome 4 “Cleaner,
safer and healthier”, which includes improving housing
standards and tackling anti-social behaviour.

In the last 18 months the Council’s housing
strategy has been published.  The
Housing Strategy 2024 to 2029 sets our plan to improve housing
services, provide safe and affordable homes and meet the needs of
our residents.  The strategy was created
by working closely with Croydon residents and partners, where their
views were at the heart of the strategy. 

The strategy makes a commitment to improve housing
services and meeting the needs of people across the borough,
including in the PRS.  To respond to
this, the Council will use a data driven approach and make the best
use of its powers to improve the Borough’s PRS. This includes
a commitment to consult on options for the introduction of a
landlord licensing scheme on either a boroughwide basis or in
targeted areas of the borough.

Furthermore
the Homelessness and Rough Sleeping Strategy was
agreed in July 2024.  This strategy sets
out the Council’s intention to implement a preventative
approach to homelessness as required by the Homelessness Reduction
Act 2017.  In 2021- 22, 284 evictions
took place in Croydon under Section 21 proceedings

Before proposing a designation and embarking on a
consultation, the Council must identify the problems affecting the
area to which the designation will apply and provide evidence to
demonstrate the existence of the problems. The evidence base is
covered in Section 5 of this report and identifies the presence of
poor property conditions and management in the boroughs private
rented sector.  The issues found meet
the licensing condition of poor property condition and poor
property management. 

The proposed scheme objectives are to:

      
i.         
Improve housing conditions in the PRS by eliminating
poor property standards;

     
ii.         
Improve management standards in PRS properties;

   
iii.         
Increase awareness for tenants of the minimum
standards to be expected in rented accommodation and what their
other rights are when renting in the PRS.

The Council is unable to achieve these objectives
without the introduction of a comprehensive discretionary licensing
scheme/s.  The case for proposing the
introduction of a selective licensing designation has also
considered whether there are any other courses of action available
that would achieve the same objective or objectives as the proposed
scheme, without the need for the designation(s) to be
made.  These were outlined in paragraph
6 of the Statement of Intent and also
section 6 of this report. 

Part 3 of the Housing Act 2004 (the Act) sets out
the framework for licensing private rented properties in a local
housing authority area. Under section 80(1) of the Act a local
housing authority can designate the whole or any part or parts of
its area as subject to selective licensing. Where a selective
licensing designation is made, all properties in the private rented
sector (exemptions apply) which are let or occupied under a
licence, are required to be licensed by the local housing
authority.

Part 2 of the Act sets out the framework for the
discretionary licensing of houses of multiple occupation in a local
housing authority area. Under section 56(1) of the Act a local
housing authority can designate the whole or any part or parts of
its area as subject to additional HMO licensing. Where an
additional HMO licensing designation is made, all HMOs in the
private rented sector (subject to exemptions and meeting the
description of the HMO subject to AHMOL) which are let or occupied
under a licence, are required to be licensed by the local housing
authority.

Every Council in England that designates an area of
their district or an area in their district as subject to selective
licensing under section 80(1) or an additional HMO licensing scheme
under section 56(1) of the Act has the Secretary of State’s
general approval of that designation for the purposes of sections
82(1)(b) and 56(1)(b) of the Act ,so long as they consult for not
less than 10 weeks.  With approval the
consultation is proposed to commence in mid-October. A longer
12 week consultation period is proposed,
to cover the Christmas period.

Alternative options considered

In preparing the case for a discretionary
licensing scheme the Council has considered what other options are
available for it to address the identified problem of poor housing
conditions. It is clear that the impact
of poor housing cannot be effectively overcome by relying on a
complaint driven model and a mandatory HMO licensing
scheme.  The evidence presented supports
the need for a significant number of properties in the private
rented sector need to be inspected in order to determine whether
any of those properties contain category 1 or 2 hazards.The identification of hazards through
inspections will allow the authority to use Part 1 powers of the
Act to detail the serious deficiencies identified and set landlords
and licence holders timescales for taking the appropriate action in
line with the improvement notices or prohibition orders
served.  Where there are situations of
non - compliance the Council would look at the options of work in
default, prosecution or financial penalties.

Other courses of action that individually
or collectively could assist the Council in tackling the poor
property conditions in the Private Rented Property (PRS)
include:

Support the PRS maintaining current service
(incorporating);

Use of Part 1 Housing Act 2004 enforcement powers
and wider enforcement powers such as Public Health powers;

Rely on the impact of prosecutions and civil
penalties for housing offences;

Improvement grants to improve sub-standard
properties;

Targeted use of Interim Management Orders (IMOs) and
Final Management Orders (FMOs);

Informal area action;

Area based voluntary accreditation schemes;

Introduction of area based (part borough) Additional
HMO Licensing [scheme and / or Selective Licensing Scheme;

Introduction of full borough Additional HMO
Licensing scheme and / Selective Licensing Scheme.

The Transform UK feasibility study for
selective licensing made the case that the statutory evidential
requirements for introducing licensing were met.  The evidential test of poor housing conditions was
met in 14 wards.

The feasibility study also made the case
that the statutory evidential requirements for introducing
additional HMO licensing were met. 
Given the prevalence of HMO’s being poorly managed and with a
category one hazard being found in all wards, only one option of a
borough wide scheme was considered.

Having considered the evidence and the
strengths and weaknesses of all options, it is recommended that the
Council consults residents and partners on a selective licensing
scheme covering 14 wards and a borough wide additional HMO
licensing scheme.