Private rented property licensing Click to get info
Under a property licensing scheme, licensable addresses must hold a property licence to be legally let to private tenants. For a licence to be granted, the local authority must be satisfied, among other matters, that the licence holder (usually the landlord) and anyone else involved in the management of the property meets a ‘fit and proper person’ test. All granted property licences impose a set of conditions on the licence holder about the letting, management, occupation and condition of the rented property.
Under Government legislation, many Houses in Multiple Occupation (HMOs) are required to hold a property licence. This ‘Mandatory HMO Licensing’ applies to houses that accommodate 5 or more tenants forming 2 or more households. In addition, all converted flats and some purpose-built flats that are occupied by 5 or more tenants forming 2 or more households also require a Mandatory HMO Licence.
Local authorities can also require that other privately rented properties are licensed by designating ‘Selective Licensing’ and/or ‘Additional Licensing’ schemes that cover all or part of their area. Like Mandatory Licensing, above, under Part 2 of the Housing Act 2004, Additional Licensing applies only to certain HMOs. Selective Licensing, under Part 3, applies to other residential accommodation, falling outside of Part 2, which are rented to single family households.
Waltham Forest already has a Selective Licence scheme in place. This borough-wide scheme began on 1 April 2015 and is due to expire on 31 March 2020.
Our proposals Click to get info
We are now proposing to introduce two private rented property licensing schemes:
A Selective Licensing scheme across all wards in Waltham Forest (except Hatch Lane and Endlebury where the proportion of private sector housing is below the national average and therefore they do not meet the criteria for inclusion) from 1 April 2020 after its current scheme comes to an end on 31 March 2020: Under this scheme, most privately rented homes that are rented to single family households or to no more than two unrelated people would require a Selective Licence.
A borough-wide ‘Additional Licensing’ scheme: The Additional Licensing scheme would cover ALL eligible HMOs that are not within the scope of Mandatory HMO Licensing where tenants share some basic facilities or amenities such as a kitchen or bathroom. This is proposed to apply across all of Waltham Forest and will ensure that all HMOs are licensed.
The pre-conditions for designating an area as subject to Additional or Selective Licensing are different and we have explained in the evidence document for this consultation why we think they are met.
The following table summarises the different schemes:
|Scheme||Definition||Area of the borough||Being consulted on?|
|Mandatory Licensing of houses in multiple occupation (HMOs)||
Houses, converted flats and some purpose-built flats that have 5 or more persons forming 2 or more households, where households share facilities such as a kitchen or bathroom
(Please note, only purpose-built flats that are occupied by 5 or more persons forming 2 or more households, where there are less than 3 flats in the building/block, fall within the scope of Mandatory HMO Licensing)
|Borough wide||No – this is a national legal requirement|
|Selective Licensing||Properties rented to single households or two unrelated people||All wards except Endlebury and Hatch Lane (where the proportion of private sector housing is below the national average and therefore, they do not meet the criteria for inclusion)||Yes|
|Additional Licensing||All HMOs not covered by Mandatory HMO Licensing where there is sharing of some basic facilities or amenities such as a kitchen or bathroom||Borough wide||Yes|
The reasons for proposing private rented property licensing Click to get info
Waltham Forest Council’s priorities include ensuring that residents have a choice of safe, good quality and well-maintained accommodation and have a good quality of life.
We recognise that private rented properties play a valuable role in providing housing for residents of the borough. A predicted 37 per cent or 39,685 of Waltham Forest’s homes are now privately rented. Just under 6,000 of these properties are estimated to be HMOs (subject to either Mandatory Licensing or the proposed Additional HMO Licensing). The remainder would be subject to the proposed Selective Licensing (except properties in Endlebury and Hatch Lane wards).
Many landlords operating in the borough take their responsibilities very seriously and provide well managed, rented homes that are maintained to a good standard. However, there are widespread issues of disrepair and housing hazards in the private rented sector and poorly-managed properties giving rise to significant ASB problems compared to homes in other sectors.
Licensing can help to improve the condition and management of privately rented property and reduce anti-social behaviour by requiring landlords to register their property with the Council and meet certain property management conditions. This ensures the regulation of privately rented accommodation and enables the Council to audit and inspect licensed properties and target properties and landlords that are not licensed or meeting their licence conditions.
We have issued more than 25,000 licences under our existing Selective Licensing scheme. Through targeted enforcement, licensing helps to deter criminal landlords. We have achieved nearly 100 successful prosecutions for a range of housing offences and issued more than 90 civil penalties for identified breaches of housing law. Our officers have been involved in 80 action days and more than 200 multi-agency operations targeting poorly-managed properties. They have helped to improve over 3,000 privately rented properties and have held landlords to account for failure to license or breaches of licence conditions.
However, whilst our existing licensing scheme has enabled us to make progress with property conditions and management practices in the private rented sector, there remains much to do. The evidence base highlights the scale of problems relating to property conditions and ASB in the private rented sector. This indicates that more than 8,000 privately rented homes have a serious housing hazard, that privately rented properties generate a disproportionate level of ASB and HMOs generate a higher level of service demand compared with other tenures. Our current view, which we are consulting about, is that further large-scale Selective Licensing and Additional HMO Licensing are the only viable options that will enable us to continue to address poor housing conditions, management and ASB, and continue the progress made in tackling these issues through the operation of the existing borough-wide licensing scheme.
More information about the impact of the current scheme and the evidence for new schemes is available in the evidence pack, which can be downloaded at the top of this page.
Alternatives to our proposals Click to get info
We have considered the following alternatives to improve property conditions, management and reduce anti-social behaviour associated with privately rented properties:
|Use of Part 1 Housing Act 2004 enforcement powers [HHSRS] and Public Health powers||Formal notices can be served that require improvements to be carried out. Councils can carry out work in default if a notice is not complied with. Landlords also risk being prosecuted if they do not comply with the notice.||Formal action is generally a slow process and most types of notices served can be appealed, which can significantly delay the time period for compliance. These powers do not place any obligation on landlords to be proactive in improving conditions. Work carried out in default can be effective but it is expensive and time consuming to the Council, with the risk that not all costs are recovered. Successful prosecutions do not in themselves secure improvements in property conditions and the Council’s prosecution costs are often not met in full. Further, Part 1 of the 2004 Act does not enable the Council to regulate or improve the management or occupation of privately rented accommodation, just the condition.|
|Voluntary Accreditation schemes facilitate improvement in management practices and standards||For those landlords who take part, accreditation can improve the ability to effectively manage a property.||This requires voluntary landlord engagement and rogue operators are unlikely to attend/engage. In Waltham Forest, there was a poor take up of the voluntary accreditation scheme prior to the implementation of the current Selective Licensing scheme. As of January 2018, only 757 landlords had registered on the London Landlord Accreditation Scheme (as reported by London Property Licensing News), which we estimate represents less than 10% of landlords operating in Waltham Forest.|
|Rely on prosecutions and civil penalties for housing offences||Provides a disincentive to keep properties in poor conditions.||These powers do not place any obligation on landlords to be proactive in improving the condition or management of their properties. Successful prosecutions, or the imposition of civil penalties, do not in themselves secure improvements in property conditions. The absence of large- scale licensing significantly reduces the scope of the Council to impose civil penalties because it is difficult to monitor and identify housing breaches without licensing.|
|Grants to improve sub-standard properties||Grants subsidise improvement works, improving standards and creating benefits for landlords and tenants.||Generally, there are few grants available and the Council has very limited scope to offer grants through successful external funding bids. In the most part, grant awards would fund improvements that the landlord should already be carrying out to meet their legal obligations. Any grant scheme would be discretionary and would rely on voluntary landlord engagement and is highly unlikely to ever be substantial enough to have a notable impact on property conditions.|
|ASB powers||Formal notices can be served that deal with ASB identified at individual properties which, if complied with, would remedy ASB at that location.||Action would generally be taken against the tenant in occupation. These powers do not place any obligation on landlords to be proactive in managing their properties to prevent or reduce the likelihood of ASB occurring.|
We believe that we can only continue to improve property conditions, management and help reduce anti-social behaviour through private rented property licensing. We believe that licensing helps make best use of existing powers mentioned in the table above. For example, by providing the intelligence and resources to conduct audits, inspections and enforcement activity, allowing us to identify bad landlords that have not licensed their property or those who fail to meet property management conditions, and then take enforcement action where appropriate.
More information about the alternatives considered can be found in the evidence pack document, which can be downloaded at the top of this page.
Fees, charges and discounts Click to get info
We propose, as with the existing licensing scheme, that a fee will be charged for a licence. The proposal is to set fees for licence applications taking into account all of our costs in administering and carrying out our licensing functions and carrying out our functions under Chapter 1 of Part 4 Housing Act 2004 (where steps are necessary to make Interim and Final Management Orders). We have not included costs we can recover directly from landlords when undertaking those functions.
We are proposing a reduced fee (Early Bird discount). This is to encourage landlords to comply with their obligation to license their rented homes at the earliest opportunity by making an application within a 3-month window that may be in the lead up to or at the start of the scheme. Charging the full standard fee will start at the end of the 3-month early bird period.
We also propose a discounted rate to properties that come onto the market after the end of the early bird period that have good energy performance ratings certificates (EPC) of C or better (this will include new build properties). This discount will not however apply to properties licensed under the Mandatory HMO scheme but will apply to those falling under the Selective Licensing and Additional HMO Licensing schemes.
We also recognise that landlords may own multiple properties (flats) in the same block or building and propose a discount for those additional properties.
We also know that licence applications relating to Houses in Multiple Occupation are the most expensive to administer. We are committed to inspecting all HMOs in order to assess standards before a licence application is determined.
Inspections to ensure compliance with licensing conditions are also required for properties, especially HMOs, where we have received a complaint or information indicating that there may be a problem with the property. This is expensive but necessary and is reflected in the level of the fees proposed.
We are required to divide any licence fee charged into two parts, an amount representing the costs of processing an application for a licence and the amount of the fees that relate to the costs of operating and enforcing a licensing scheme. In order to keep administrative costs down (which otherwise would increase the overall fees) we will only require payment of the licence fee at the point the licence application is decided. If an application for a licence is not granted we only charge the amount that represents the costs of having processed the application.
The fees have been calculated to meet the full cost of licensing administration. Further information on this can be found in the evidence pack document, which can be downloaded at the top of this page.
Since 1 April 2016, Waltham Forest’s Selective Licence fee has been £650. The proposal is to increase the fee for the new scheme to £700 starting on 1 April 2020.
Proposed charges and fees
|Standard fee||Early bird discount rate (see definition in Evidence Pack)||EPC discount rate - which includes new build properties (see definition in Evidence Pack)||Multiple property discount (see definition in Evidence Pack)|
|Selective Licence||£700 for up to 5 years licence||£450 for up to 5 years licence||£450 for up to 5 years licence||£100 discount per flat in a block for 2nd, 3rd etc. flat after first flat pays full fee|
|Additional Licence (HMOs)||£1000 for up to 5 years licence||£750 for up to 5 years licence||£750 for up to 5 years licence||£100 discount per flat in a block for 2nd, 3rd etc. flat after first flat pays full fee|
Fees levied for Mandatory HMO Licence applications vary depending on the size of the HMO Mandatory HMO Licence fees are not part of this consultation.
Fees in other London boroughs
The following table highlights how these fees compare to other London boroughs that operate similar schemes.
|London borough||Selective Licence||Additional Licence|
|Barking and Dagenham||Currently proposing to increase to £900||£700|
|Croydon||£750||No scheme in place|
|Redbridge||£604||£1,198 to £1,864|
Find out more Click to get info
We encourage you to read the evidence document that supports this consultation and provides further information about the proposed licensing schemes, including:
- details of the current Selective Licensing scheme and its impact
- details of the proposed schemes
- evidence base explaining the reasons for private rented property licensing, including how it will improve property management and conditions and reduce anti-social behaviour
- map of areas proposed for licensing
- details of fees
- licence conditions that landlords and properties will have to meet
- summaries of private rented housing, property conditions and ASB for each ward in the borough
Full details can be found in the evidence pack which can be downloaded at the top of this page.
Take part in the consultation Click to get info
We encouraged all residents, tenants, landlords, agents and businesses in Waltham Forest and neighbouring boroughs to respond to the consultation.
We asked an independent organisation called Public Perspectives to help manage the consultation.
Public meetings were held separately for residents and landlords/ agents/ property professionals on the following dates:
Landlords/ property professionals
- Landlord Forum: Wednesday 6 February (first session at 6pm, second session at 7.30pm)
Waltham Forest Town Hall Council Chamber, Forest Road, E17 4JF.
- Tuesday 19 March: 2pm to 4pm
- Tuesday 19 March: 6pm to 8pm
Waltham Forest Community Hub, 18A Orford Rd, Walthamstow, London E17 9LN.
Resident/ tenant workshops
- Tuesday 26 March: 6pm to 8pm
- Thursday 28 March: 6pm to 8pm
Waltham Forest Community Hub, 18A Orford Rd, Walthamstow, London E17 9LN.
Places are limited and admittance is by ticket only.
We also conducted a doorstep survey with 1,350 randomly selected residents during the consultation period to gather a statistically representative sample of residents’ and tenants’ views about the proposals.
Key stakeholders such as neighbouring boroughs and representative bodies for landlords, property professionals and local residents were also contacted directly and invited to participate in the consultation.
The consultation was open for 12 weeks between Monday 4 February 2019 and Monday 29 April 2019.
Next steps Click to get info
Public Perspectives, the organisation helping us manage the consultation, will produce an independent report of the consultation results. This report, along with other evidence about the impact of the proposals will be considered by Waltham Forest Council’s Cabinet (which is our decision-making committee in respect of these proposals) in July 2019. The report and documentation will be published on the council’s website ahead of the meeting. The decision taken will also be published and available on this website.
Depending on our decision, an application will be made to the Secretary of State for permission to implement a private sector property Selective Licensing scheme once the existing scheme finishes in March 2020.
The borough-wide Additional Licensing scheme for HMOs will be implemented in line with the timetable that will be set out in the report to Cabinet, if a decision to adopt such a scheme is made.