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RESOLVED:
 
1. 
Approved a statutory consultation exercise on proposals
to introduce:
 
1) 
A Selective Landlord Licensing scheme, covering all
wards in the borough, with the exception of Haggerston, Hoxton East and Shoreditch, Hoxton West
and Woodberry Down, based on the criterion of poor housing
conditions in privately rented homes (non-HMOs).
 
2) 
An Additional Licensing Scheme for Houses in Multiple
Occupation (HMOs), covering all wards of the borough, and would
apply to HMO dwellings that are not covered by the national HMO
mandatory licensing scheme.
 
2. 
Noted that once the consultation has been carried out,
a further report with the finalised outcomes of the consultation,
together with any recommendations in relation to designation of
discretionary property licensing schemes, will come before Cabinet
for approval.
 
REASONS FOR DECISION
 
Landlord Licensing is a regulatory scheme
implemented by local authorities to ensure that landlords meet
certain standards in managing and maintaining rental properties.
The aim is to improve housing conditions, protect tenants, and
promote responsible property management. Landlord licensing comes
under three main categories:
 
· 
Mandatory Licensing applies to larger HMOs, specifically those
occupied by five or more people forming two or more households
sharing facilities. This is a national requirement under the
Housing Act 2004 and is designed to ensure that larger HMOs meet
safety and management standards.
 
· 
Additional Licensing is a discretionary scheme that allows local
authorities to extend licensing requirements to smaller HMOs that
are not covered by mandatory licensing, specifically those occupied
by three or four persons living in two or more separate households.
This scheme may be introduced where there is evidence of poor
management and housing conditions in HMOs that are not already
subject to national licensing requirements.
 
· 
Selective Licensing is a discretionary scheme that applies to other
private rented properties within a designated area (not HMOs which
are covered by the mandatory and additional licensing schemes
above). It is introduced in areas with problems such as high levels
of poor property conditions, low housing demand, high levels of
deprivation, or high levels of anti-social behaviour or crime.
 
Licences include legally binding conditions
regulating room sizes, provision of amenities, levels of
occupation, property conditions and property management. Compliance
with these requirements are checked through inspections,
enforcement visits, and reviews of landlord records. Failure to
comply with licensing requirements can result in fines, rent
repayment orders, and bans to landlords to prevent them renting out
properties.
 
During 2018 - 2023 the council operated two
discretionary landlord licensing schemes: a full-borough additional
licensing scheme, and a pilot selective licensing scheme in three
wards (Brownswood, Stoke Newington and
Cazenove), designated under poor
property conditions.
 
Our experience with these schemes has provided
valuable insights into the key factors that contribute to a
successful licensing programme. A well-executed scheme should
include the following:
 
· 
Careful planning, particularly in estimating costs and mitigating
the risk of underestimating the number of licensable
properties.
 
· 
A robust approach to evidence gathering and public consultation to
ensure informed decision-making.
 
· 
Sufficient staffing and resources to ensure the scheme is
well-funded, with the capacity to enforce licensing requirements,
and conduct inspections.
 
· 
Carefully outlining boundaries to target locations with clear,
demonstrable issues, while recognising that challenges may
sometimes span an entire ward.
 
· 
Actively engage with tenants and landlords to improve
communication, ensuring landlords are aware of their
responsibilities and tenants are informed.
 
· 
Alignment with broader community initiatives, ensuring the scheme
supports wider efforts for change, backed by strong political
commitment.
 
· 
Transparent and consistent reporting, providing updates on targets
and outcomes.
 
Houses in Multiple Occupation (HMOs)
 
The demand for HMOs has and continues to grow
due to decreased housing supply and affordability. Nearly half of
private renters in Hackney earn less than £30,000 per annum
and the average rent, including room rental in HMOs, is
£1,850 per month. As a result, for many people, HMOs provide
the only viable housing option.
 
HMOs often house vulnerable residents who have
no other housing options and conditions and management standards in
them are often very poor. The current principal tool for regulating
HMOs is the existing mandatory HMO licensing regime.
 
Criteria to be met before introducing
discretionary licensing schemes:
 
Any discretionary licensing scheme proposed by
a local authority must meet specific statutory criteria as set out
in the Housing Act 2004. Schemes must be evidence-based and
targeted at addressing specific issues.
 
Additional Licensing Schemes
 
Of the 6,038 HMO properties in Hackney, 540
larger HMOs are covered by the current Mandatory Licensing scheme,
and 4,041 HMOs may come under the additional licensing. There are a
further 1,457 HMOs that are currently unlicensed and may
potentially come under the additional scheme. If the proposed
scheme comes into effect, we will investigate these to determine
whether they require a licence.
 
Before making an additional licensing
designation, the Council must:
 
· 
Consider that a significant proportion of the HMOs covered are
being poorly managed such as to cause problems for occupiers or
members of the public. HMOs in Hackney meet this criterion as our
recently commissioned Tenure Intelligence data report (Appendix 1)
shows that there are 1,818 HMO properties that are likely to have
at least one serious hazard. This represents 23% of the HMO
population in Hackney, and is double the PRS national average
(10%). De Beauviour (142) and Stoke
Newington (140) have the highest number of HMOs with serious
hazards.
 
· 
Consider whether there are any other courses of action that might
provide alternatives to licensing or would assist licensing in
dealing with such problems. This criterion will be evidenced in the
public consultation documents. 
 
· 
Consult persons likely to be affected by the designation.
 
Selective Licensing Schemes
 
Requirements in the Housing Act 2004 for a
selective licensing scheme are designed to ensure that the scheme
is evidence-based and targeted at addressing specific issues.
 
A local housing authority may only make a
designation if the area to be considered has a high proportion of
property in the private rented sector. In England this is 19% of
the total housing stock. Our data shows that all wards in Hackney
exceed this threshold, with an average of 31.60% (39,493) of
dwellings in the private rented sector. The lowest proportion of
PRS in any ward is 25.2% (Kings Park), while the highest is 45%
(Dalston), further highlighting the
widespread reliance on private renting across the borough.
 
A local authority must demonstrate that the
proposed licensing scheme addresses one or more of the
following:
 
· 
Poor housing conditions.
· 
Anti-social behaviour.
· 
Low housing demand.
· 
Deprivation.
· 
Crime.
· 
High migration levels.
 
The Housing Act 2004 also requires the local
authority to demonstrate the following outcomes as part of its
process of delivering a selective licensing initiative: 
 
· 
Ensure that the exercise of the power is consistent with their
overall Housing Strategy. 
 
· 
Adopt a coordinated approach in connection with dealing with
homelessness, empty properties and anti-social behaviour affecting
the private rented sector as regards combining licensing with other
action taken by them or others. 
 
· 
Consider whether there are any other courses of action available to
them (of whatever nature) that might provide an effective method of
achieving the objectives that the designation would be intended to
achieve. 
 
· 
Consider that the making of the designation, when combined with
other measures taken by the authority alone or with other persons,
will significantly assist them to resolve the problem identified
(whether or not they take any other course of action as
well). 
 
· 
Take reasonable steps to consult persons who are likely to be
affected by the designations and consider any representations
made.
 
General Approval 2024
 
With effect from 23 December 2024, a new
General Approval came into force and local authorities in England
are no longer required to obtain confirmation from the Secretary of
State before implementing a selective licensing scheme of any size.
The local authority must, however, still satisfy all statutory
requirements contained in Part 3 of the Housing Act 2004. To
support local accountability and transparency, local authorities
are also requested to:
 
· 
Include the Mayor of London in the consultation on the proposed
designation, where applicable.
 
· 
Provide MHCLG with data on their selective licensing scheme(s),
upon commencement of the scheme, and on the scheme end date or
within 12 weeks of scheme end date.
 
· 
Publish the outcome of any selective licensing review(s) undertaken
pursuant to their legal duty to review the operation of schemes
under section 84(3) of the Act of their website.
 
The Council’s proposals meet the
required criteria set out in the legislation for both additional
and selective licensing schemes, including demonstrating a clear
link between poor property conditions, significant levels of
privately retained housing and issues such as deprivation and
anti-social behaviour. The evidence supports the need for
intervention, and our proposed licensing scheme is a proportionate
and targeted response to these challenges.
 
Statutory Consultation
 
Before implementing a discretionary licensing
scheme, the local authority must conduct a statutory public
consultation, which must run for at least 10-weeks. Stakeholders,
including landlords, tenants, residents and local businesses must
be given the opportunity to provide feedback. The authority must
consider the responses and demonstrate how feedback has influenced
the final proposal.
 
The Council is proposing a 12-week
consultation and, with external consultancy support, will develop
and implement a comprehensive consultation and engagement strategy
(see Appendix 2 for the proposed consultation and engagement
strategy).
 
Following the consultation, responses will be
reviewed and analysed. A consultation report summarising the
findings and the council’s response will be prepared.
 
The final proposal, incorporating stakeholder
feedback and any revisions, will then be submitted to Cabinet for
approval to implement the designations. If approved by Cabinet,
implementation of the scheme(s) can commence following a statutory
three-month cooling-off period to allow for final preparations and
communication with affected parties.
 
Proposals
 
The Council has appointed an independent
consultant to review a thorough evidence base for discretionary
licensing. The proposed designation is based on this evidence (see
Appendix 1).
 
The Council considered eleven selective
licensing scheme options, ranging from using a single designation
based on one criterion (poor housing), to more complex schemes
using up to three designations based on multiple criteria,
including poor housing conditions, ASB and deprivation.  The number of wards included in the options ranged
from seven to a full-Borough scheme encompassing all 21 wards.
 
Having carefully considered the evidence and
the strengths and weaknesses of all options, it is recommended that
the Council consults residents and stakeholders on a scheme
consisting of one designation.
 
This proposed designation consists of 17 wards
and is based on the criterion of poor housing conditions in
privately rented homes. The scheme would cover 26,520 properties,
76% of Hackney’s PRS. Haggerston,
Hoxton East and Shoreditch, Hoxton West and Woodberry Down are not
included in the proposed designations as the evidence base does not
currently support a scheme covering these wards.
 
Officers agree with this proposed designation
and intend to consult stakeholders on this option. It is important
that the criteria for making a designation is evidence based and
robust. It is also important that the designation is simple, clear
and easy to understand, and that outcomes are achievable and
measurable - something that may be more difficult to achieve with
other criteria.
 
It is recognised that whilst the four wards of
Haggerston, Hoxton East and Shoreditch,
Hoxton West and Woodberry Down are not included in the proposals,
there will still be privately rented properties experiencing poor
standards in these wards. There is however insufficient evidence to
justify including these wards in the discretionary licensing scheme
proposals due to the lower numbers of identified problems which
is  supported by the evidence base.
These issues can be addressed using existing powers and provisions.
The very purpose of selective licensing is that it is
‘selective’, targeting the areas that need intervention
the most. The four wards that are excluded from the selective
licensing scheme will be kept under review.
 
Methodology
 
The Council have worked with Metastreet Ltd who have developed a stock modelling
approach based on metadata and machine learning to provide insights
about the prevalence and distribution of a range of housing
factors. The Tenure Intelligence (Ti)
approach has been used by a number of councils to understand their
housing stock and relationships with key social, environmental and
economic stressors. The housing models are developed using unique
property reference numbers (UPRN) as keys, which provide detailed
analysis at the property level. Data records used to form the
foundation of this data include:
 
· 
Council tax.
· 
Housing benefit.
· 
Electoral register.
· 
Private housing complaints and interventions records.
· 
Other council interventions records.
· 
ASB complaints.
 
For each criteria, metadata was used to
evidence the quantity and significance of the issue.
 
Evidence
 
% of PRS Stock Criterion - The
stock profile analysis carried out by Metastreet indicates that Hackney’s PRS
comprises 31.60% (39,493) of the borough's housing stock. This data
provides evidence that all wards within the borough exceed the
national average of 19% and can therefore be considered as having a
significant level of privately rented accommodation within its
overall housing stock. All wards within Hackney could therefore be
considered for the inclusion within a selective licensing scheme in
the borough under this criteria. However, a borough-wide
designation is not being proposed. The reason for this approach is
set out in 4.22-4.25.
 
Poor Property Condition Criterion
- Predictive modelling has been used to identify properties
within the PRS that are likely to be in poor housing condition. The
Housing Act 2004 uses a Housing Health and Safety Rating System
(HHSRS) to categorise the types of hazards identified at a property
that are likely to cause risk of harm. Our data shows that
approximately 5,241 PRS properties (excluding known HMOs) are
predicted to have at least one serious hazard under the HHSRS (for
further details please see Appendix 1). This represents 15% of the
total PRS stock (excluding HMOs), which is higher than the national
average of 10%. 17 of Hackney’s 21 wards are predicted to
have at least 10% PRS with serious hazards. These 17 wards also
have a high proportion of PRS (more than 19%), therefore meet the
criteria for Poor Housing Conditions. The four wards that do not
meet this criteria are Haggerston,
Hoxton East and Shoreditch, Hoxton West and Woodberry Down.
 
Licensing Fees
 
The fees charged for obtaining a license must
be reasonable and proportionate to cover the costs of administering
and enforcing the scheme, and are not intended to generate a
surplus income for the Authority. The proposed fees aim to balance
the need for effective scheme administration with fairness to
landlords.
 
Exact fees will be determined based on
operational requirements, benchmarking against other London
boroughs operating licensing schemes, Appendix 3, and feedback that
will be received during the consultation process.
 
The Council is proposing, and will consult on,
the following fees:
 
· 
Selective Licence: £925
· 
Additional Licence: £1,400
 
Fees will be a one-time payment, per property
(with potential exemptions for properties with multiple dwellings
under the additional scheme) and are valid for five years. Fees are
expected to be split into two instalments: an initial application
fee payable upon submission, and a final fee due upon approval.
 
The proposed fees reflect the costs of
processing applications, scheme administration and enforcement.
Subject to consultation feedback, discounts may be considered
for:
 
· 
Accredited landlords via the London Landlord Accreditation
Scheme.
· 
HMO properties with multiple dwellings.
· 
EPC rating above C.
 
Local authorities have the power to adjust the
fees for licenses based on the needs and conditions of the service.
Hackney has the option to raise the fees on mandatory licences
annually at its own discretion without any consultation.
 
Timeframe
 
The following timescales provide an
approximate framework that Officers will aim to achieve; however,
they may be subject to change:
 
· 
Cabinet decision to request approval to consult on the two new
licensing schemes: 28 April 2025
 
· 
Consultation Period (if approved by Cabinet): Summer 2025 (12
weeks)
 
· 
Cabinet Decision on potential implementation of both schemes:
Autumn 2025
 
· 
Implementation of selective and additional scheme (subject to
approval) - 3 month cooling off period: Early 2026
 
DETAILS OF ALTERNATIVE OPTIONS CONSIDERED AND
REJECTED
 
Several alternative approaches were considered
before proposing a consultation on discretionary licensing schemes.
These options were assessed for their effectiveness in addressing
issues within the PRS, their alignment with statutory requirements
and their potential impact on tenants, landlords and the wider
community.
 
· 
Do nothing: the option to take no further action above the current
national mandatory HMO licensing scheme was considered and
rejected. While the existing housing enforcement framework
addresses some issues in the PRS, it is insufficient to tackle
widespread non-compliance and poor property standards effectively.
Without discretionary licensing, the council lacks the necessary
tools to proactively address substandard housing conditions and
related issues as described in paragraph 4.12. This option would
fail to meet the council’s strategic housing objectives and
obligations to improve housing standards for residents.
 
· 
Rely solely on reactive enforcement: another option was to rely on
existing enforcement powers under the Housing Act 2004, such as
improvement notices and prohibition orders. However, this approach
is reactive rather than preventative, and would not provide the
structured oversight that licensing schemes can offer. It would
also limit the council’s ability to identify and address
systemic issues in the PRS as mentioned in 6.2-6.7.
 
· 
Implement only additional licensing: limiting the approach to an
additional licensing scheme for HMOs was considered. However, this
option was rejected as it would not address the broader issues
affecting single-household privately rented properties,
particularly in areas of significant poor property standards.