The NLA’s Head of Policy Chris Norris on the amendments to local councils’ powers to licence landlords and our role in securing the change.
When the outgoing Labour government granted local councils ‘general approval’ in 2010 to introduce selective licensing schemes without first having to have them rubber stamped by central government, it was difficult not to see it as an attempt to lock in a legacy in the wake of a potential change of administration.
What we do know is that since general approval was granted there’s been a proliferation of blanket borough- or city-wide licensing schemes that, with perhaps the exception of Newham, hasn’t actually led to any significant enforcement or improvements for tenants.
Our lobbying efforts
I’d be lying if I said it hasn’t felt like we’ve been banging our heads against a brick wall since 2010, but in September last year, the current Housing Minster invited our input on this matter. The timing couldn’t have been better: we were on the verge of bringing to fruition a body of research which we’d been compiling over the last four years. We published it recently, you can read it here. The Minister was the first to see it.
In it, we outline the boom in the number of blanket licensing schemes since 2010 and highlight a lack of enforcement action being taken by local councils. We also point out a reasonably strong correlation between the political control of a council and their tendency to license landlords. Yes, you’ve guessed it: in other words, this basically means that Labour-led councils have been the biggest beneficiaries of the general approval powers, choosing to license. Conservative-led councils on the other hand have not, instead preferring to work with local landlord communities through education and incentive-based approaches. Perhaps this isn’t that surprising, but the important thing is it serves as proof nonetheless and it’s something that’s strengthened our case no end.
What the changes mean
Since meeting with the Minister and making our case we’ve been waiting with baited breath to see what the outcome would be and naturally we were delighted that he listened.
The changes announced by the Housing Minister will mean that any council that proposes to licence more than 20 per cent of its geographical area or more than 20 per cent of privately rented homes in the local authority area will need to prove it stands up to independent scrutiny. Councils have been their own judges for the past four years and we’ve long argued that the evidence provided to ‘justify’ blanket licensing schemes have been weak and unclear. This approach should now mean that local authorities will focus their activity on areas with the worst problems and, importantly, not adopt a broadbrush approach that will have an adverse impact on good landlords.
Not penalising good landlords or tenants
And this is an important point. In his letter to announce the changes to local councils, the Housing Minister submits that the blanket licensing approach adopted by some has major drawbacks. Such an approach, he says, is disproportionate and unfairly penalises good landlords.
He also notes that the increased cost of licensing shouldered by the majority of good, compliant landlords invariably ends up with the tenant as higher rents. We’ve long been referring to schemes like these as a ‘tenant tax’ so it’s good news that this is being recognised by the powers that be.
In addition, the Minister has expanded the criteria for selective licensing to cover areas experiencing poor property conditions, large amounts of inward migration, a high level of deprivation or high levels of crime. This now accompanies the existing legal criteria of anti-social behaviour and low demand. Again, this should help ensure that local authorities have the right tools to target enforcement action appropriately.
What does the future hold?
Like a bad whiff, blanket licensing schemes have lingered in the background for long enough and this should signify their end – in the short term at least. It’s uncertain what the future will hold especially if Labour form a majority government or we have Labour/Lib Dem coalition. Although, as Stephen Williams MP (another Minister within DCLG) revealed at our recent hustings event, the Liberal Democrats do not support expansive licensing.
But we’re far from done here. Our report also makes the case for local councils to be able to keep hold of proceeds from the enforcement action they carry out, in order to incentivise and help budget for future enforcement action. Currently such funds go directly to the Treasury, so we need to continue our lobbying efforts on this front. Good landlords should not be made to foot the bill; the polluter should be made to pay.
However, in the meantime it represents good news for landlords and for tenants and it vindicates a lot of hard work behind the scenes from the NLA over the last four years. So I’m off for a cigar.