Ben Reeve Lewis takes a look at an important topic – how the PRS and local authorities should work together.
There is a quandary in housing land that at the moment that mostly only those working in councils would be aware of. The topic of how councils and private landlords work together.
How to work together – the two approaches
On the one hand you have the social lettings agency model, through which councils propose that the best way to control the PRS is to join the club, offer services and inducements that are unique to working with a large statutory body.
Acting a bit like a high street letting agent but with more facilities.
On the other hand you have the “bag ‘em and tag ‘em” approach offered by strict, across the board licensing in the style of Newham Council’s flagship policy.
Both schools of thought are adopted with the same laudable end in mind, ensuring that property standards are raised and the laws surrounding renting are adhered too.
This is the legitimate aim of local authorities who are charged with the enforcement of breaches of the various laws and regulations but the two routes are entirely different animals.
You can’t make friends with your cake AND eat it
The important thing for the casual reader to understand is, you can’t do both. You have to decide.
Because if you go down the strict, blanket licensing route, you can forget building a partnership approach with the PRS community.
Whereas the social lettings agency route is based on building bridges and understanding, the licensing approach is a blunt tool that I would argue damages more than it helps.
I am a tireless supporter and exponent of the social lettings agency model.
Councils need PRS landlords more than they need councils and to entice them over we need to offer a hell of a package that will work for the PRS community. And in the working of it, councils will find it easier to police what is going on.
For some time now Newham, under Sir Robin Wales, has been championing the licensing route, employing more staff and targeting designated areas like a housing version of chemotherapy. That may cure the disease but leave the patient distinctly the worse for wear and open to other infections
Do we need such invasive surgery? I would argue not.
But which if these two routes is holding the most sway in the local authority community?
Which one will they go for?
Well so far schemes have ranged from the avidly social lettings agency approach, to at the other end of the spectrum ‘License the death out of it’ and on the way taking into account the ‘Don’t know’ school of thought and the ‘Mumbling, staring at their shoes hoping the problem will go away’ advocates.
Word is out on the council networks last week that two other London authorities are putting substantial sums of money aside to follow Newham’s example in the coming year, bucking the trend of staff cuts and instead employing more environmental health officers, investigators and prosecutors to build teams using licensing as a way forward.
The start of the snowball?
Councils look to each other for successful procedures and where one goes others soon jump onboard. So does this represent the start of a snowball effect for Newham’s initiative?
Three London councils down? How many will follow? Too early to tell just yet but I can tell you this much, the more that do follow, the less the partnership approach will take root until it gets killed off completely.
Stats and money rule
So what exactly drives these two approaches? For local authorities statistics rule the day and it is far easier to quantify the number of properties and the number of people licensed than it is to quantify the soft outcomes and less proscriptive nature of the lines of communication between local authority and PRS in a working social lettings agency.
Income generation is of course another element of it. This local authority hating government, devise ever more fiendish plans to denude councils of staff and services. So independent income streams are becoming more and more part of the agenda.
Terrible I know but that’s the world we inhabit now.
You can generate income through licensing streams or you can generate income through selling services that only councils can provide.
Legal services, grants, mediation, surveyors, housing benefit hotlines. Again it’s merely a question of which route you choose to achieve your outcome but you cant do both.
Demon or friend?
The licensing route is predicated on a demonisation of PRS landlords, the social lettings agency route recognises that councils, landlords and tenants are all part of the same system and for that system to work there needs to be a broader understanding of needs.
The trouble is the latter approach is a far more unwieldy animal to fit into the tick boxes that keep people in jobs.
For the past couple of years I have been an avid observer of this developing dichotomy from both inside and out. For a while there it was clear in council meeting rooms that the Newham model was seen as an unrealistic eccentricity, a bit of a joke.
Then people in councils started to smile nervously whilst looking on in a kind of amused scepticism, now, with last week’s news that reached my ears it would appear that people are seeing some value in the approach.
Delivering damage
But whilst simultaneously following these developments in the landlord community, reading comments on Landlord Law Blog, Property 118, Property Tribes, Landlord Referencing etc, the places where PRS landlords hang out, a different story emerges.
It is quite evident that Newham have become the anti-Christ, the embodiment of everything bad that landlords think about councils.
This worries me. The damage caused to schemes that are trying to build bridges and work with the PRS carries further than the borough boundaries of Newham and confirms endemic fears of many in the landlord community that councils are simply looking on the PRS as a huge cash cow.
Battle lines are beginning to get drawn and personally, I predict a civil war between town halls and the PRS if blanket licensing becomes the idea virus that it is threatening to become.
Picture by kind permission of Sandra Savage Fisher of QuaLETy
Personally I think the licensing system for HMO in the Midlands where a landlord gets a very big discount for being trained and a member of a landlord’s organization is a good model. I would also expect to get the discount for using an agent that is a member of ARLA.
I cannot see way a licensing system should cost more than the road tax for admin, the road tax systems checks the car has insurance and a MOT, but is very cheap to run. Most of what we pay for Road Tax goes to the government, rather than covering the costs of admin.
I see Newham as a case study in how not to run a licensing system……
I am not convinced of the benefits of licensing systems, however if we must have them, can they be like the Midlands not Newham please.
The bottom line problem with the Newham model as I said in the article, is that it relies on demonising landlords and threats. there are no incentives in there.
Why should anyone want to work with a council like that? Of course they will pay the licensing fee, they have to, but you can say goodbye to an good will or partnership approach.
The scheme you mention Ian seems to have both.
Raising standards or raising money, that is the question?
We see plenty of evidence that licensing is creating “jobs for the boys” but apart from a bit of anti-landlord propaganda based on fining a handful of dodgy dealers I’ve seen no real evidence of standards being raised. It’s not new either, Manchester were the first to bring our licencing “Newham style”. It ran for 5 years and was scrapped. There wasn’t a shred of evidence which I recall which clearly demonstrated that standards were improved, despite the scheme having raised millions, most of which was spent collecting the money and not dealing with the criminal operators who ignored the licensing scheme anyway.
The only incentives for Councils to close down unsafe or over-crowded properties are political, and they don’t due to being under-resourced and because doing so causes them a bigger homelessness issue which creates more expense. Perhaps that’s why Councils continue to refer their homeless to slum operators like the HMOdaddy recently featured on the BBC’s “Meet The Landlords” TV programme?
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Home ownership has become harder to access for many. House sales have halved over the past few years, while house prices have remained relatively stable now a days.