Private Landlord Licensing

Debate between Stephen Timms and Melanie Onn

Wednesday 15th November 2017 Westminster Hall

[Stephen Timms]

In Newham, the register is open to the public. There are wider lessons to be learned from the impact of the scheme. My focus is to seek the Minister’s support for reauthorising the scheme rather than bringing it to an end on 31 December.

The scheme has led to the recovery of £3.1 million of due council tax; the identification and stopping of £300,000 of housing benefit fraud; and the issuing of 61 rent repayment orders leading to a further £380,000 in reclaimed benefits. It is not surprising that there is such strong public support for the scheme. Some 89% of residents agree and 33% agree strongly that continuing the scheme will improve the conditions and the management of private rented sector properties.

The scheme handles the problem of disrepair in the private rented sector in a fair, proportionate and effective way. The response depends on the nature of the disrepair. In some cases, the tenant will be advised by the council’s housing team on how to tackle whatever the problem is. In other cases, a letter will go to the landlord with a reminder of their responsibilities. For more serious cases, an improvement notice will be served. Only if all else has failed and the landlord fails to comply will prosecution of the landlord be considered. It is a very graduated response.

The private rented sector in the London Borough of Newham, as in the constituency of my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss), has grown very rapidly: it contains 51,000 properties —46% of the total, a far higher proportion than 15 or 20 years ago. There is no question but that most landlords are responsible and law-abiding, and for such landlords the scheme is light-touch and not intrusive, apart from a modest fee. The Secretary of State is right to recognise that, in a minority of cases, poor practice is a serious problem; the Newham scheme has proved an effective response. Licence holders are required to prevent overcrowding, antisocial behaviour, rubbish in front gardens and noise nuisance—problems that occur in a small minority of cases but that disproportionately affect the vicinity. Landlords are also required to manage homes well and keep them safe and in good repair.

I assure the Minister that the scheme is not a gratuitous tax on landlords. I understand that there may well be concerns about that, but the licence fee simply covers the scheme’s administrative costs. If the scheme is reauthorised, as I hope it will be, those who apply at the start will pay just £400—less than £7 per month over the five years of the licence’s validity. That fee is also tax-deductible as a legitimate business expense.

[Melanie Onn (Great Grimsby) (Lab)]

I joined the enforcement actions of Newham Council yesterday morning, and it was alarming to see the conditions that people were living in. A £400 fee to be part of the scheme does not seem a great deal of money as a proportion of the income that landlords receive; a three-bedroom property that I saw yesterday was being let for about £1,800 per month.

[Stephen Timms]

My hon. Friend is absolutely right. Licensing also supports good landlords by preventing them from being undercut by people who own properties but do not look after them properly or keep them safe. The levels of rent in my borough are exactly as she states.

Selective licensing already exists for houses in multiple occupation, but unfortunately that is not enough. Problems in the private sector are not confined to HMOs; properties can move very quickly from single family occupancy to multiple occupancy, and the line between the two is often rather thin. The Newham scheme allows that to be monitored much more effectively, particularly as licensing requires landlords to provide copies of tenancy agreements and safety certificates.

The scheme has been successful and effective in safeguarding renters in my constituency over the past five years. The Minister and I agree on the need for Government action to protect renters against the small minority of landlords whose practice is poor. I urge him to maintain, not weaken, the protection for renters in our part of London and to reauthorise the Newham private rented sector licensing scheme.