Bad news for rogue landlords as Newham’s property licensing scheme gets the green light

19 December 2017 in Housing and Mayor
The government has given the green light to renew Newham Council’s ground breaking private rented sector licensing scheme, following a long fought campaign by the council.
The decision will come as a relief to the 41,000 households in Newham who rely on the private rented sector, and who feared the scheme could be scrapped.

The decision will also be greeted with relief by local authorities across Britain, who have followed Newham’s successful lead, and introduced their own licensing schemes.

But it’s not all good news, the Secretary of State did not approve the council’s application for a full borough-wide private rented sector licensing scheme. Instead, the government unilaterally excluded one part of the borough, Queen Elizabeth Olympic Park.

This decision means the whole E20 post-code area (three per cent of the borough) will be left without the protection provided by licensing and enforcement.

The government’s unnecessary delay in reaching a decision on Newham’s scheme means there will be a gap of two to three months between the end of the old scheme, and the start of the new. This will leave residents vulnerable, and cause confusion for the majority of decent landlords.

The campaign to retain Newham’s scheme has commanded widespread support from residents, housing charities, neighbouring boroughs, the police, the London Fire Brigade, parliamentarians and the Mayor of London.

Newham was the first authority in the country to introduce borough-wide licensing in 2013, which requires all landlords to licence all properties offered for private rent.

Over the last five years Newham Council has made impressive interventions to protect tenants. In enforcing the licenses the council has uncovered inhuman and unsafe conditions. This has led the council to:
  • Instigate 1,225 prosecutions for housing crimes (60 per cent of all prosecutions in London);
  • Ban 28 of the worst landlords from operating in the borough – forcing them to sell up or hand their properties over to reputable managing agents;
  • Recover over £3.1m a year in unpaid council tax;
  • Serve 2,834 notices to address and tackle serious hazards in rented property.
Despite this success, in 2015 the government introduced a new piece of legislation requiring government permission to introduce widespread selective licensing schemes. The standard of “proof” required to gain approval is onerous, and forces local authorities into a lengthy and costly process, which may deter many councils from applying.

Newham Council remains concerned about the bureaucratic nature of the licensing application process to government, the lengthy delays in receiving a decision by ministers and the significant costs this has forced the council to incur.

Sir Robin Wales, Mayor of Newham, said: “Newham prosecutes more criminal landlords than the rest of London put together and has demonstrated that private rented sector licensing is the most effective way of protecting tenants and driving up standards across the sector.”

“The government has finally recognised  the success of Newham’s scheme, but it is ridiculous that ministers took so long to conclude that protecting tenants and driving up standards is a good thing!

“This democratically elected council should not have been forced to spend so much time, and dedicate so many resources, to justifying something so self-evidently successful.

“Almost half our residents now rely on the private rented sector and they will be relieved that the bulk of our scheme has been given the green light, we hope the government’s decision to exclude E20 does not become a cause for concern.

“Whatever the justification for excluding E20 from the scheme, the government should not be making that decision. Local people showed their overwhelming support for a borough-wide scheme and these decisions should be taken on the ground by local authorities who know their local area rather than ministers sitting in Whitehall.

“If the government is genuinely committed to localism and fixing the broken private rented market, it should remove this bureaucratic  and anti-democratic piece of legislation and let councils get on and introduce the right schemes to protect their private sector tenants from rogue landlords.

“I welcome the Communities and Local Government Committee’s decision to review this legislation as part of its wider examination of the private rented sector.”