Will Selective Licensing Schemes Survive the Renters (Reform) Bill?

A Row Of Terraced House Rooftops 2022 03 08 00 06 52 Utc

The Renters (Reform) Bill completed its most recent legislative stage in the House of Commons last Wednesday (24th April) with around 200 amendments and is now set to progress to the House of Lords.

The headline issue across much of the Media has, understandably, been the proposed ban on section 21 repossession notices - so called ‘No fault evictions’. However, one non Government sponsored amendment (‘New Clause’ NC1 at page 28) which also went forward (moved by 47 MPs, 10 of whom declared a “relevant interest”) was a clause that would repeal Part 3 of the Housing Act 2004 which gives Local Authorities the power to set up area based Selective Licensing schemes.

The ‘Members Explanatory Note’ to the amendment states: “This new clause would remove the ability of local housing authorities to designate areas as subject to selective licensing.”

The previous assurances given by the Government that Selective Licensing would be reviewed prior to the setting up of the proposed national landlord portal, under an enacted Renters’ Reform law, appeared to have been insufficient.

In an explanation of why he voted against the reform bill, reported in Landlordzone, Conservative MP Andrew Mangnall is quoted as saying of Selective Licensing that it “is an additional cost to landlords which will now be added to the property portal and redress scheme, and they shouldn’t have to pay twice for much the same thing” because councils would be able to access the new portal thus making all such licensing schemes ‘redundant’.

He was also quoted as saying “The inability to operate your own personal property as an individual might wish, will only result in large swathes of the PRS [private rented sector] throwing up their hands and selling their properties.”

But, there is also another side to the Selective Licensing equation that shouldn’t be ignored. The Chartered Institute of Environmental Health (CIEH), just before the bill was debated, “urged” MPs not to accept the amendment repealing Part 3 of the 2004 Act.

Louise Hosking, Executive Director of Environmental Health at CIEH, said “We strongly disagree with suggestions that the proposed Property Portal removes the need for selective licensing schemes. Licensing provides a means for local authorities to inspect privately rented housing using enforceable conditions and to identify and resolve problems without the need for tenants to have complained. The Property Portal would collect valuable information but would not replace this service. The Renters (Reform) Bill should be used as an opportunity to remove unnecessary barriers to local authorities using licensing schemes to improve housing standards.”

Hosking’s statement is underlined by a 2023 Government report just on the HHSRS hazard of Damp and Mould alone, in the PRS (there are 29 HHSRS hazards in total). 309 councils were asked (all 309 responded) to provide data on the issue in their areas. As a factor affecting enforcement against just this one hazard, 60% of those 309 councils reported that staff capacity/retention had either “the “highest or second highest impact on enforcement action relating to Damp and Mould”. The implication being that licensing allows councils to focus scarce resources on proactive enforcement rather than simply rely on tenant complaints.

However, it seems as though the Government has taken on board the position of CIEH and the Housing Minister, Jacob Young MP, has (re)confirmed that a review of Selective Licensing will take place to look at potential overlaps between the Property Portal and licensing schemes. It may also be that licensing fee levels could be lowered and the size of any given proposed licensing scheme designations could be reduced.

One certainty, at least, is that the debate over Selective Licensing isn’t done and dusted yet.

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