London’s private rented sector currently includes more than one million households, many of whom are living in unsafe, insecure or unaffordable conditions. Nearly 20% of private rented accommodation in the city does not meet basic housing standards, and councils are being held back from addressing this due to central government intervention, new research has found.

In their latest report published today, London’s think tank, Centre for London, call for ‘selective property licensing’ to be more widely used to protect tenants in the private rented sector. This is when landlords of private accommodation are required to obtain a license from their council in order to rent out their property, meeting certain minimum standards to do so.

The report recommends:

• The government should restore the power to design and implement selective licensing schemes to local authorities, irrespective of scheme size. Councils know their own areas – and how to tackle the housing issues within them – best. Councils in London have already been successful in improving housing conditions through selective licensing.
• That the government’s ‘Property Portal’ national landlord register works in tandem with selective licensing schemes, rather than replace them. As they fulfil different functions, it is possible for a national landlord register and selective local licensing to complement each other. The former should be open by design, adaptable and effective for local authorities, to save time in identifying landlords, and concentrate council resources on enforcement.
• That the government invest in the local authority housing enforcement workforce. They should increase funding for apprenticeships and graduate traineeships, as well as exploring the potential for a Housing Skills Centre to train future enforcement staff.

Although there are already successful examples of property licensing schemes in the capital, the Centre argue that its usage in London is being held back by central government legislation. Currently, the Secretary of State for Housing has to sign-off selective licensing schemes that cover more than 20 per cent of a borough. This leads to councils having to spend hundreds of thousands of pounds, and years of officer time to get their applications approved.

The government’s own newly-tabled Renters Reform Bill aims to improve the private rented sector with added regulation. In particular, their plan for a ‘Property Portal’, or a national landlord register, would allow renters to check whether their landlords are complying with legal requirements. We support this and the Bill’s broader aim of enforcing higher standards in the rental market, but the report is clear that any such Portal could not replace selective properly licensing. Instead, it should be seen as a complementary measure, that works alongside it.

The Centre’s research found that licensing schemes are able go beyond the scope of the proposed national landlord register, providing more meaningful protections to tenants. Licensing schemes let councils set standards with legal force to improve people’s homes. An example of this is the ability to enter privately rented properties without notice to carry out inspections. Where a national landlord register could only provide basic information about all privately rented properties and their landlords, selective property licensing schemes give access to more granular technical details and larger amounts of information about landlords.

Criteria for licences can include having a gas safety certificate, or landlords sharing details of their criminal record. Landlords’ fees are calculated to fund more staff to run and enforce the scheme. Evidence shows that they result in higher property standards and lower anti-social behaviour in areas they have been implemented.

With high demand and not enough homes, too many Londoners are living in homes which are unsuitable for them. This is made worse because local authorities don’t have the tools they need to tackle rogue landlords in their area, and maintain adequate housing standards. More than half of London’s renters have experienced their landlord failing to make essential repairs.

Local authorities should be supported by central government to use selective licencing to enforce high standards and protect tenants. This would be one of the most effective ways of tackling inadequate housing conditions in London’s private rented sector.

Jon Tabbush, Senior Researcher at Centre for London said:

“The Renters Reform Bill has the potential to be the biggest step forward for tenants’ rights in a generation, but it won’t be enough by itself to tackle the worsening problems within London’s private rented sector.

Our research highlights the value of central government and councils working together to identify rogue landlords, and strengthening the enforcement capacity to deal with them.

With more and more Londoners having to enter the rental market to live in the city, making sure people can do so in safe and secure conditions is crucial for preserving London’s future.”

 Cllr Khevyn Limbajee, Cabinet Member for Community Safety at Waltham Forest Council, said:
 
“Too many private rental tenants in London experience unsafe conditions in their homes. Waltham Forest’s property licensing schemes have resulted in the improvement of thousands of properties and protected people against problems including disrepair and dampness, falsified gas safety certificates, and dangerous building work.

This research underlines the importance of large-scale property licensing schemes in providing local authorities with the regulatory framework to intervene to improve standards and management practices in the private rented sector at the level that is required.

Despite these successes, under current rules we must apply to the Secretary of State every five years to renew the schemes. This takes up time, money, and resources that could be better focused on directly helping tenants and landlords.”

Rokhsana Fiaz OBE, Mayor of Newham said:

“We know that London is in the grip of an ongoing housing crisis and Newham’s residents are at the sharp edge, that’s why I welcome this incisive report published by the Centre for London and their welcomed recommendations.

In our borough, too many of our residents are suffering in the face of a catastrophic housing crisis due to unaffordable homes, high rents and insecurity facing renters.  We have 37,000 people on our housing list, 7000 households in temporary accommodation and over half of our residents now live in the private rented sector making them especially vulnerable in the face of the cost of living crisis.

This report and its recommendations are welcomed to drive forward dealing with the crisis facing us.”

 Deputy Mayor for Housing and Residential Development, Tom Copley, said:

“This is just one of the ways in which Government have been letting renters down, with too many Londoners living in unsafe and unhealthy privately rented homes.

That’s why the Mayor and I are working with Government to reinstate London councils’ ability to make their own decisions about licensing schemes, with a role for the Mayor in creating both a more transparent system for landlords and better protections for private renters. This important research helps us to make the case for this. The Mayor is also once again urging Government to take action to make rents more affordable in London, including by giving him the power to introduce a two-year rent freeze and devolve the power to implement rent control.

If we are to continue building a better London for everyone, it’s essential that we continue to stand up for and empower renters. We’re doing everything we can in London, but we need the Government to step up and work with us to crack down on rogue landlords and improve conditions in the sector.”

ENDS

Notes to editors

• Centre for London is London’s think tank. A voice for all London is, and could be. We’re fiercely independent and consistently influential. Our vision is a London that’s successful and sustainable. A global city that works for all Londoners.
• This report was made possible with the support of the London Borough of Newham, the London Borough of Waltham Forest and the Greater London Authority.