Portsmouth Tightens HMO Rules
As expected, Portsmouth Councillors have voted to implement new, stricter HMO standards and enforcement policies applicable to existing licensed HMO's starting today (1st Dec 2022) and to extend this to ALL HMOs in the city by September next year (2023).
The Good News First
We have long argued that Licensing schemes historically have a high cost for the good landlords who participate but allow the rogues to continue to operate below the radar, as Council resources focus on administration of the Licensing scheme and have no time to proactively seek out the bad guys and enforce against them. We have also objected to the fact that current rules drive out small HMO landlords and the properties are often snapped up by developers who turn them into 'Super HMOs' which upsets councillors and increases pressure 'to do something about HMOs' - which creates a vicious circle making the problems ever worse for the good landlords out there.
The good news is that our concerns appear to have been listened to and council staff came up with a cleverly drafted proposal which used the (debatable) evidence from the consultation to justify the scheme that councillors had tasked them with creating, whilst presenting it in a way that impacted existing good landlords least.
How did they do that? Well, the new standards which become operational on December 1st 2022 differentiate between 'existing' HMOs and new or altered HMOs. This means that a landlord with a property that has been operating satisfactorily for many years as an HMO will be allowed to continue to do so whilst those that are new to market or have been substantially altered or extended will feel the full force of the new regulations - having said that, the new standards are more stringent (see HPC document below) so we need to see how they operate. We already know of one property that has been licensed since 2006 and inspected many times without issue, in which the kitchen is 1 square metre larger than the new rules specify but the lounge is 1 square meter smaller - so we wait to see how these rules are applied.
Add to this the proposal that 'accredited landlords' will get a lighter touch - details of which have yet to be finalised but we are hoping it means that some of the policing of the scheme will be left to the accreditation body, so for example, the PLEASE SEND COPIES OF YOUR GAS SAFETY CERT WITHIN 14 DAYS OR RISK A £5,000 FINE letters will not be sent (and note, under the new enforcement policy, getting away with a fine of just £5,000 looks like a lucky escape!) by PCC and accredited landlords not being constantly monitored by PCC will allow staff there to concentrate on the less expert landlords.
What Does The New Scheme Look Like
Much detail will need to be defined in the months ahead, and the people at PCC have agreed to come and discuss some of these at our January meeting (so do make sure it is in your diary) but this is what we can tell you today:
- All HMOs in the city not currently licensed will need to get a licence in September 2023
- A licence will be 1-year, 2.5 year or 5-year and will need to be renewed on expiry.
- We hope that accredited landlords will be able to opt for a 5-year licence without debate
- All other applicants will have the length of their licence determined by how a checklist, a tick in every box shows you have a well-managed property, and you get a 5-year licence, less than that and you get a shorter one with a higher level of scrutiny and more licence conditions...
Full details of the scheme along with all of the supporting documents can be seen here: Agenda item - Additional Licensing of Houses in Multiple Occupation Portsmouth City Council
New Space And Amenity Rules
The rules on what is acceptable in terms of space and amenities in HMO's has been ratcheted up - we have said many times that improving standards is good, but it does increase rents as the cost of alterations need to be recovered and if a property needs to reduce its occupancy, the costs need to be spread between fewer people.
Our friends at Hampshire Property Consultants have produced the following summary of the major changes which will impact HMO landlords:
Our Objections
We hoped, in our deputation to Cabinet (where the decision was made), that we could convey the impact a scheme would have on the local housing market. Sadly, it fell on deaf ears - some councillors interpreted our concerns as a threat and others thought our objections misplaced and ill-informed.
This is what we said:
"As the Association representing local landlords in the Portsmouth area, it will be no surprise that we object to the introduction of Licensing schemes for HMOs. We did so in 2012 prior to the last round of Additional Licensing, we cited the failure of the last scheme to achieve any benefit as a reason not to proceed with the consultation and now, as you decide whether to do it again, we see it is a very expensive sledgehammer to crack a very rare nut (and the problem you seek to address is not a nut anyway).
Last time you identified 3,000 HMOs, we believe there are now less than 2,800 in the city of which 1,400 are larger and already licensed. The premise, of all of the proposals before you, is that there are 4,800 unlicenced HMOs in the city – we challenge that basic assumption as there is no evidence to support it and argue the costs involved are not justified for such a small sector of the housing market.
We commend those involved for setting a target start date of September 2023. If the Renters Reform Bill is drafted as proposed and passes through Parliament this year as planned, Licensing will be unnecessary and may even be removed as an option – we recommend that resources are not committed prior to publication of the Bill.
We also congratulate the Officer team on the new standards document – this will be the 1st time in 10 years they produced a standards document with any form of review or approval, which considering so many decisions are based on it, has been scandalous.
The new document is a vast improvement in terms of presentation and clarity over previous versions – however it is still prescriptive which we believe to be beyond the remit of a Local Authority, a theory we will test rigorously in the courts at the earliest opportunity. ("Some councils misunderstand the status of local HMO standards and apply them as a prescriptive set of requirements rather than guidance that needs to be interpreted with a degree of flexibility." - Manchester CC V Archie Maddan).
One other outcome of being too prescriptive is the document rapidly becomes out of date – for example the version you are being asked to approve today ignores the recent change in Carbon Monoxide regulations and prescribes an illegal implementation of sensors/alarms.
The current space and amenity proposals encourage properties with very small bedrooms, small kitchens and large lounges – which is completely opposite to what most tenants want and request and will sadly drive the market toward yet more 'Super HMOs'. Do you really want that?
We hope that any future updates are reviewed / approved and clearly documented – you must not allow a repeat of the confusion of recent years with randomly changing standards, multiple versions on the internet, etc.
Members believe schemes like this to be self-funding. That may be true in terms of administration and some of the cost of enforcement. We suggest that other departments be tasked with identifying additional workload due to Licensing as we know from experience the indirect costs are significant – especially Housing Options, legal and planning. For our part, we will be encouraging our members to make it clear that when they evict, that they instruct tenants that they are selling because of PCC / LibDem rule changes as we are wrongly being portrayed as the bad guys.
Success of a scheme such as this depends on recruiting and training to the appropriate levels. Whilst the current team is much better trained than previously, there are NO fully qualified EHO's and we are aware that finding new recruits with current salary banding is VERY difficult. Would a more focused solution based around current resources and additional formal training be more likely to yield the results you seek? (There is a national shortage of trained staff to operate schemes like this. (For evidence google 'shortage of Environmental Health Officers'))
If a scheme is introduced, especially given the hardships PCC will face staffing it, we request that the Southampton solution of allowing private / 3rd party property inspections rather than having to wait until PCC resources allow (in the last scheme, some properties were never inspected even though the landlords involved had paid the full fee).
If implemented, this scheme – as was the case with the last scheme – will remove the cheapest rooms from the local market. This will impact the poor and vulnerable most and that will have direct costs for PCC. It will also discourage many small landlords from offering HMO accommodation – many have left already as market rents for families are high and taxes, interest rates, disaggregation and energy costs are having a massive impact. Licencing will be the final straw. At our member breakfast last week one long term member said that he will be evicting 2 lady tenants, both in their 50's, both in the same property for 13 years as they are the 2 most recent arrivals, as he will be reducing the number in the house so it is no longer an HMO. This is not an extreme example – we have a member who has already taken the decision to close his 16 HMOs currently student let as they are no longer worth the extra management overhead. You need to appreciate the management and admin overhead a licensing scheme has for landlords – many will just walk away given all the other recent changes.
We request that any property granted a licence should automatically be granted C3/C4 status for the duration of the licence so that currently empty houses can be occupied – this would be a real benefit of Licensing and would restore the flexibility currently missing from the Portsmouth housing sector since you introduced the Article 4 Direction.
As made clear in Appendix 9, this scheme does nothing to make the city safer, to reduce income deprivation or poverty, equality, diversity, carbon emissions, energy use, climate change mitigation, air quality, the natural environment or WASTE MANAGEMENT! And has a negative impact on employment opportunities and the local economy. Para 6.6.2 states "that as many as 40FTE additional officers will be required to deliver the scheme" – surely any new initiative of this scale ought to achieve more than simply ensuring each resident has space for 'an occasional table' (Standards Doc, page 41). This Impact Assessment also fails to mention a number of risks that were included in the consultation version and how they might be ameliorated.
In the consultation, 76% of respondents did not live in an HMO. We accept many have issues - but doubt any have been into said properties or have any view on the amenity or space standards within, whilst the HMO landlords who responded are the experts in this sector but have sadly been marginalised by the structure and lack of appropriate weighting in the survey.
We know you are keen to raise standards in this sector – not that evidence suggests that the issues your constituents raise have anything to do with HMO tenant space or amenities. We will comply with the rules – but increasing standards increase costs which is reflected in rent – so please be prepared for the cost to PCC and the heartache for those affected as the most vulnerable in the city find themselves priced out of the Private Rental Sector.
With that in mind, we reiterate our request that you do not proceed until the Renters Reform Bill is published as we are sure that will change the regulatory landscape in this area.
Signed on behalf of the 500 members on the PDPLA by all the current committee: Alice Ibbotson, Allan Wadsworth, Alwin Oliver, Anthony Athill, Charlotte Walker, Joe Chamberlain, Julian Lloyd, Malcolm Drew, Martin Silman, Martyn Winfield, Sarah Goodman, Simon Davidson & Warren Somerset"