Selective Licencing : A Sour Pickle

Across the country, we see increasing numbers of councils introducing Selective Licencing applicable to all houses & flats in a designated area. Some councils are imposing licence fees of £900 or more even for the smallest flats, such as in Havering and in North Lincolnshire. These schemes, especially those with higher fees, can be extremely heavy-handed, impacting on tenants' rights as much as on landlords' competitiveness. Some schemes lack respect for sensitivities in multi-ethnic communities, and might readily be viewed as facilitating 'gentrification' or gerrymandering at the expense of the most vulnerable in society. None of the councils in our area have introduced Selective licencing yet, but it is probably only a matter of time.  

It is scandalous that most of these schemes are justified on criteria defined through secondary legislation lacking any parliamentary scrutiny. The criteria for Selective licencing set out originally in the Housing Act 2004 was limited to areas of low housing demand or those suffering significant anti-social behaviour, but it also allowed the secretary of state to define additional conditions. In early 2015, just before he left his Housing role, Eric Pickles introduced "The Selective Licensing of Houses (Additional Conditions) Order 2015" defining 4 more conditions that are now used by councils up and down the country to justify schemes that are, to my mind, really insidious.

I have started a petition on the parliament website aimed at encouraging the current secretary of state to revoke that Order, found here: Revoke The Selective Licensing of Houses (Additional Conditions) Order 2015 - Petitions . So, I kindly ask the readers to sign that if you agree once you've reviewed the issues set out below.

One of the conditions introduced in the 2015 Order allowing Selective licencing is that a significant number of rented properties in the area are occupied by migrants where a scheme is aimed at 'the preservation of the social or economic conditions in the area' and that overcrowding be prevented. The undertone seems to be that Selective licencing can be utilised to reduce the quantity of housing available to migrants in the cheapest neighbourhoods to achieve a lower rate of migration in the borough concerned. This is an open door for any councillor with xenophobic tendencies to push on. The mechanisms by which a Selective licencing scheme might be expected to achieve those aims is totally unclear as the Housing Act 2004 does not really provide those tools. But, at least one Conservative-led council seem to think this 2015 Order gives them the right to undertake precautionary internal inspections of every single rented home in a multi-ethnic neighbourhood at dates and times of the council's choosing with the occupants having no say in the removal of their right to quiet enjoyment of their family home.

The next condition is that the council considers it appropriate to undertake HHSRS inspections of a significant number of homes in the area and that a general improvement in housing conditions will result. However, Part 3 of the Housing Act 2004 does not provide councils with powers of entry for precautionary inspections (unlike with HMOs), but only where entry is 'necessary' which will require grounds relating to each property, such a report by a tenant or neighbour, or poor condition being visible externally. Again, some councils appear to be over-interpreting what powers are construed through the 2015 Order and acting as if the secretary of state unilaterally re-defined Part 3 of the Act granting them additional powers of entry that ignores tenants' rights.

The 2015 Order also allows Selective licencing to be introduced to areas of high crime. How the powers granted to councils through the Housing Act 2004 could possibly have any effect on reducing crime levels is unclear. If crime perpetrated by a tenant comes to the attention of the licencing team then the landlord can be notified, of course, and that might inform a landlord's decision to evict. But, realistically, the Police will not generally be passing on details of crime reports to a council licencing team. And if the expectation is that landlords will evict offenders whenever told about a tenant's unlawful actions by the council then that seems to be extending the judicial process in such a way that is detrimental to tenants' human right with regard to due legal process. At least one draconian council imposes a licence condition that requires landlords to take eviction action whenever deemed appropriate by the council with no option for appeal by either the tenant or the landlord. How that can be construed as lawful is baffling.

The last condition applies where the area has high rates of deprivation and a reduction in deprivation rates is an aim of the scheme. Besides crime and poor housing conditions already covered, deprivation factors councils may give regard to: unemployment rates, average income, health, ease of access to education and training, and the physical environment. It is hard to see how Housing Act 2004 powers can positively affect such factors. Here, the undertone is that 'gentrification' is a legitimate aim of Selective licencing schemes. That is, these schemes can be used to displace lower income households, in particular benefit recipients, from neighbourhoods where re-generation is seen as desirable. That is, making letting in the area less profitable driving a shift to higher rates of owner-occupation, with no regard for the low income tenants displaced. This seems to be a Thatcherite-type policy writ large. And I should note here that councils do not make any extra housing provision to accommodate the displaced when schemes are approved.

That cost of a Selective scheme, both the licence fees and all the work that goes into dealing with the council by landlords and agents, has to be borne through higher rents or reduced maintenance expenditure or a combination of the two. This is detrimental to those living in the designated area in particular, although an increase in local market rents will affect all renters in the town.

The designated areas are normally covering only part of a town or city such that there is a market distortion effect. The landlords with the extra cost burden of properties within the designated area are disadvantaged relative to those with properties in the same local market outside the designated area. The differentiating factor between winners and losers is simply one of geography, and not whether the homes provided are of a higher or lower standard. This will naturally drive lower levels of investment by private sector landlords in the designated areas in favour of other areas locally, so there can be no doubt some tenants will be displaced wherever there is a Selective scheme in favour of owner-occupiers, and rents will rise overall to the detriment most particularly of those on low fixed income as benefit recipients.

Why are so many councils doing this you might wonder. My impression is that councils are increasingly turning to programmes that are categorised as 'self-funding' so that they can be seen to be doing something when core activities are being cut due to budget constraints. This is nothing more than unfounded blind optimism that there is an opportunity to get something for nothing from a 'self-funding' programme, and they won't listen to reason on the real implications.

Again, here is the link to the petition: Revoke The Selective Licensing of Houses (Additional Conditions) Order 2015 - Petitions