Purpose

To update Cabinet as to consultation results
and to seek approval for designation of an Additional Licensing
Scheme.

Content

The Cabinet considered
a report of the Director of Economy and Place which sought approval
to implement an Additional Licensing Scheme for 3 and 4 person
Houses of Multiple Occupation (HMO) across the whole Borough of
Rochdale.
 
The Head of Strategic
Housing (Property) was in attendance to
present the report and to address the questions and the comments of
the Cabinet Members.
 
The Officer informed
that, in December 2023, Cabinet had approved the decision to
commence a formal consultation on proposals for an Additional
Licensing scheme for three and four person HMOs. The formal
consultation ran for 13 weeks from 15th April 2024 and
ended on 15th July 2024. Details regarding the
consultation were included in section 4 of this report.
 
 
Resolved:

1.   
That the designation of an Additional Licensing Scheme under
Section 56(1) of the Housing Act 2004 across the whole Borough of
Rochdale be agreed;

2.   
That the Directors of Economy & Place and Resources be
authorised, in consultation with the Portfolio Holder for
Regenerations & Housing and the Assistant Director of Legal
& Governance:

 (i) To
charge the fees for the Additional Licensing Scheme as detailed in
section 4 of the report;

(ii) To require the proposed Licence Conditions for the Scheme as
detailed in Appendix 2 of the report.
 
Reason for
decision:
Rochdale Borough has
approximately 16,688 households living in private rented property
(ONS 2021 Census). The majority of that stock is traditional build
older stock, with a high proportion of terraced dwellings which naturally have a far higher rate of
disrepair and require higher levels of investment. Typically the level of hazards present are 25%
higher in these types of stock (DA4101 Health &
Safety of Dwellings, ONS 2021).
 
In Rochdale, the
private rented sector accounts for 18% of households, reflecting an
increase in over 5000 properties between 2011 and 2021.
 
The last additional
licensing scheme expired in 2016 and since then the apparent
nationwide housing and cost of living crisis have taken their toll
on Rochdale. The availability and affordability of accommodation is
as stark a situation as it has ever been, forcing residents to
accept substandard accommodation as their only viable options.
 
The range of demand on
the private rented sector is also at an all-time high. As well as increased demand from would-be home buyers who
struggle to get a foothold in the market through unaffordable
mortgages and high costs of living, increased demand for homeless
accommodation due to the economic down turn, coupled with increases
in demand from asylum and supported accommodation, combine to form
a situation where the highest bidder wins and the availability of
quality, affordable accommodation is at an all-time low.
 
Current evidence
demonstrates that in certain sectors of the Private Rented Sector
market, notably within HMOs that housing standards are declining,
with many landlords not adhering to
their legal responsibilities and leaving occupants in poor,
unsanitary and unsafe accommodation.
 
The designation of a
new HMO Additional Licensing Scheme will allow Housing Standards
Officers the ability to utilise a range of additional inspection
and enforcement powers not currently available to them.
 
In addition to raising
housing standards and dealing with problematic HMOs within local
communities it will help contribute towards balancing good quality
supply with demand to help stabilise rents and encourage good
quality management, to establish longer terms lets and lower
turnover.
 
With circa 90,000
homes and a population in the region of 223,000 in Rochdale, the
demand for affordable accommodation is higher than ever before and
in view of the nationwide and locally affecting housing crisis,
there is a distinct lack of available private rental accommodation.
With house prices at record levels and the inevitable hike in rents
to meet cost of living and mortgage rate increases, Houses in
Multiple Occupation, more than ever, will provide a valuable source
of much needed affordable accommodation. However, the Council must
promote and enforce a good quality of accommodation which the introduction of an
Additional Licensing Scheme for HMOs will contribute towards.
 
HMO's unfortunately
provide some of the poorest quality housing in the Borough
currently; with issues of disrepair, overcrowding, waste
accumulation, poor maintenance and issues of anti-social behaviour
affecting local residents. This can often stem from the nature in
which they are occupied, by unrelated
individuals sharing amenities within the accommodation.
These properties require proper management to maintain effective
tenancies and to ensure improvement of stock within local
communities.
 
Over the past 5 years
the amount of private tenant complaints dealt with by the
Council’s Housing Standards team has risen from 279 to 518
across all property types. A significant proportion of these are
from HMO properties where mandatory licensing does not apply, but
which would be captured by Additional Licensing
and conditions. Typically HMO
tenants are often the most vulnerable members of society and are
less likely to engage of their own volition.
 
Of those HMOs
the Council is aware of and has inspected in
the Borough from 2016 to present were found to contain
category 1 hazards. Almost all the HMOs failed to provide
appropriate fire safety. Fire alarm systems were either lacking
entirely or not kept up to standard. Fire doors were either missing
entirely or poorly maintained. General wear and tear are greater in
“bedsit style” HMOs, given the high turnover of tenants
and heavy use of shared facilities. It has been evidenced that
landlords are not maintaining
properties, either through lack of proper / regular property
inspections, or because of a lack of regard to the effects these
defects have on the tenants.
 
Since 2016 there has been a 46% rise in private tenant
complaints, with increased public concern relating to the rise in
HMOs within the Borough, which has been evidenced by rising member
casework.
 
Through the work of
the Housing Standards team, there is clear evidence that a
significant number of these smaller HMOs seriously fall short of
the fire safety requirements, are overcrowded and lack suitable
management arrangements.
 
Cabinet approved the
decision to commence a formal consultation on proposals for an
Additional Licensing scheme for three and four person HMOs. The
formal consultation ran for 13 weeks from 15th April
2024 and ended on 15th July 2024. Details regarding the
consultation are included in section 4 of this report.
 
The introduction of a
borough wide Additional Licensing scheme, will provide a clear set of prescribed
conditions and expectations, will aim to bring about consistency in
the way HMOs are managed and will directly tackle problems such as
poor property management, poor property condition and overcrowding.
Further benefits should include a reduction in complaints and
problems associated with HMOs, protection of the health, safety and
welfare of tenants, reduction in negative impacts from HMOs for the
wider community and improved management and property condition
within shared accommodation.
 
Alternatives
considered and rejected:
The alternative
decision open to Cabinet was not to consult, not to consider
implementing Additional Licensing and not to utilise the full range
of enforcement powers available to the Authority to resolve much
needed housing standards issues within the Borough.
 
Practical alternatives to Additional Licensing must be
considered with regard to s.57 (4) of the Housing Act 2004
(‘the Act’) as a Local Housing Authority may not make a
designation to implement Additional Licensing unless i) it has considered whether there are any other
courses of action available (of whatever nature) that might provide
an effective method of dealing with the problem or problems in
question and ii) it considers that making the designation will
significantly assist them to deal with the problem or problems
(whether or not they take any other course of action as
well).
 
The alternatives to
implementation of Additional Licensing would principally be to
introduce Selective Licensing either as a stand-alone tool or in
concert with Additional Licensing; pursue Civil Penalties for
breaches of legislation and regulation (further detail is contained
in Appendix 1).
 
A civil penalty
can be issued as an alternative to
prosecution for each separate breach of the Houses in Multiple
Occupation management regulations. A civil penalty can only be imposed as an alternate to prosecution,
and is currently used by the Council in line with published
policies. However, it is a reactive enforcement tool which
principally deals with after-the-event issues retroactively dealing
with housing standards rather than setting of standards in advance
and allowing consequent investigation where required.
 
Selective Licensing
can apply to any rented property within a set area, whereas
mandatory and additional licensing only apply to houses in multiple
occupation. Selective licensing may only be granted if the area
meets one or more conditions (such as low housing demand,
significant and persistent ASB, poor housing conditions, high
levels of migration, crime or
deprivation).
 
Selective Licensing
applying to any rented property is judged to place an unnecessarily
high burden on all landlords in
Rochdale. The rationale for pursuing Additional Licensing is
specifically to target HMO rental properties where risk to
inhabitants is typically significantly higher than single household
rentals.
 
HMOs that are poorly managed and badly maintained can put an
extra burden on local services and have a negative impact on the
area, as well as potentially posing safety risks to inhabitants.
That is why additional considerations apply to the management,
maintenance and construction of HMOs.
 
Significantly Additional Licensing will bring more
properties under the regulatory and investigative abilities of the
Council, as currently without Additional Licensing powers of
investigation and entry are inhibited. Selective Licensing on its
own would not afford the same ability to investigate, monitor and
regulate the specific cohort of HMOs as a particularised housing type.
 
Selective Licensing
does not target the problems identified (see Appendix 1) in the
same way that Additional Licensing would and creating an
administrative burden to licence all properties within a given area
would create unachievable capacity demands for the service and
place an unnecessary burden on landlords. 
 
The Council believe
that introduction Additional HMO Licensing will help to
i) improve property conditions within
these HMOs ii) improvement management standards and iii) ensure
residents will be afforded the same protection as people in
mandatory licensed HMOs.
 
The Council would
expect benefits of an HMO-targeted Additional Licence scheme to
include:
 

o  
As with mandatory licensing, additional licensing will bring a
significant number of properties to the Council’s attention
that would otherwise have gone undetected. The use of civil
penalties only would not allow for this, neither does it place a
legal duty on landlords being
“fit and proper persons”.
 

o  
A wider understanding from HMO landlords and agents of expected
management standards, which would not be achieved through use of
civil penalties alone which is a far more reactive enforcement
measure.
 

o  
Diligent private landlords would benefit
from not having to compete with poorly managed properties that do
not meet the standards.
 

o  
Licensing will require absentee or unprofessional landlords to employ a professional management
approach to actively manage their properties and ensure suitable
arrangements are in place to deal with any problems that arise.
 

o  
Improved management and improved conditions of privately rented
accommodation will provide quality and choice for residents.
 

o  
The better protection of the health, safety and welfare of tenants
through improved safety standards within the HMO.
 

o  
A reduction in the negative impacts for tenants of HMOs.
 

o  
Reduction in the negative impacts from HMOs that will benefit the
whole community (unlike Selective Licencing
which would not be Boroughwide).