Considering the case for additional licencing of houses in multiple occupation

Housing standards and adaptations

Housing Services

City of York Council

December 2020

Contents:	Page
1. Executive summary	4
2. Introduction	5
3. Licensing of Houses in Multiple Occupation
3.1   What is a HMO?	6
3.2   Mandatory licensing	7
3.3   Additional licensing	7
4. Supporting information
4.1    National context	9
4.2    Local context and strategic links	9
4.3    Demographics	11
4.4    Housing in York	11
4.5    HMOs in York - Number and distribution	12
4.6    Property conditions	14
4.7    Energy performance of HMOs	16
4.8    Housing Health and Safety Rating System	17
4.9    Enforcement of HMOs	18
4.10   Impact of Covid-19	20
4.11   HMO licencing conditions	22
4.12   Environmental complaints data	23
4.13   HMO case studies	27
5. Consultation	30
6. Option appraisal and the benefits of additional licensing
6.1   Option appraisal	31
6.2   Benefits of additional licencing	32
7. Impact of licensing	35
8. Conclusion	37

Figure 1.   Housing affordability ratio in York

Figure 2.   Distribution of HMOs in York hotspot density

Figure 3.   Distribution of licenced HMOs hotspot density

Figure 4.   Dwelling age by ward

Figure 5.   Rate of pre 1919 private sector housing by ward

Figure 6.   Percentage of private sector housing with HHSRS hazards

Figure 7.   Estimated number of HHSRS category 1 hazards by tenure

Figure 8.   HMO inspection data for second half of 2018

Figure 9.   HMO inspection data for second half of 2019

Figure 10. HMO inspection data for first half of 2020

Figure 11. HMO renewals data for second half of 2019

Figure 12. HMO renewals data for first half of 2020

Figure 13. ASB complaints  hotspot density

Figure 14. Noise complaints hotspot density

Figure 15. Waste complaints hotspot density

Table 1.   HMOs by ward

Table 2.   EPC rating by ward

Table 3.   EPC data for licenced and un-licenced HMOs

Table 4.   Conditions imposed on licenced HMOs in first six months of licencing

Table 5.   ASB complaints by ward

Table 6.   Noise complaints by ward

Table 7.   Waste complaints by ward

Table 8.   Private rented sector rents 2014-2018

Table 9.   Comparison of rents in areas with and without licences

Table 10. PRS rents during 2017-18

Table 11. Percentage of private sector rent increases 2017-2018

1. EXECUTIVE SUMMARY

York is well known nationally and internationally as a great place to live, work and visit. However, the city is also well known for its high housing costs. Partly due to the problems associated with a lack of affordable housing supply many people look to the city’s private rented sector (PRS) to meet their housing needs. Whilst overall standards in the PRS are good, the sector displays some of the worst conditions.

Houses in multiple occupation (HMOs) are a significant sub-sector of the private rental market. Ongoing pressures within the housing market mean that for many, including a rising proportion of families, the only chance of a decent home is in a properly managed and well regulated, licensed HMO.

The provision of good quality housing for York residents is a key priority. The Council Plan 2019-23, York Health and Wellbeing Strategy 2017-22 and the York and North Yorkshire Housing Strategy 2015-2021 all call for more decent, energy efficient and safe homes that have a positive impact on people’s health and wellbeing. 

The mandatory licensing of larger HMOs in York has been effective in regulating and improving the standard of accommodation offered to let within this sector. Licensing has encouraged a positive interaction with landlords and allowed for any problems presented by each house to be managed on an individual basis through a bespoke set of licence conditions. With over 3,000[1] HMOs in the city only one third are currently regulated through mandatory licencing.

Data shows that HMOs are more typically found in areas closer to the city centre and the two major university complexes, such as Hull Road ward, Guildhall ward, Fishergate ward, Clifton, Heworth ward, Micklegate ward, Osbaldwick and Derwent ward and Fulford and Heslington ward.  Many of these areas have high numbers of older properties where poor conditions are more prevalent. Analysis of energy performance certificate data shows a strong correlation between HMO density and lower EPC ratings.  Likewise, analysis of environmental complaints data shows some correlation between high HMO areas and ASB, noise and waste complaints, though the link could also be due to these areas being typically more densely populated and towards the urban core where such complaints are more prevalent.

Additional licensing targeted at wards with the highest number and concentrations of HMOs in the city would allow for the positive effects of licencing to be extended and for the benefits to be available to all.

Alternatives to extending HMO licencing have been considered but in each case the weaknesses are deemed to outweigh the strengths with none of the alternatives giving a long-term solution to problems within the HMO sector. The benefits of additional licencing to the council include a consistent approach to HMOs in York, improved links with landlords and pro-active and pre-emptive involvement with the sector that minimises reactive work. A case study from the midlands area[2] has shown that the costs associated with licencing have little if any direct impact on rents.

The council believes that licensing all HMOs in targeted areas is essential for bringing about improvements particularly in relation to property condition and energy efficiency in York’s HMO rental stock.

2. Introduction

Access to decent affordable housing is essential to support good health and wellbeing and a good quality of life. Overall, housing standards in York are high - the physical condition of the city’s housing stock is generally good across all sectors and energy efficiency levels are above the national average.

However, this overall positive picture masks disparities both between and within sectors that give rise to some concern. On the whole we find some of the worst conditions within the PRS, which includes a significant proportion of houses in multiple occupation.

Local authorities have an obligation under the Housing Act 2004 to keep housing conditions in their area under review. This includes all tenures of housing, not just stock that may be owned by the local authority.

The council has developed a number of policies and strategies to further its overall approach to property conditions. An assessment of poor housing conditions completed in 2015 forms an important contribution to the full evidence base which underpins these policies and strategies towards improving housing standards.

Councils have an obligation to enforce certain statutory minimum standards in housing and have powers that they can use to do this, while further non-mandatory powers are available to the Authority under the Housing Act 2004.

In line with our strategic ambitions to improve people’s quality of life, we are focussed on utilising what tools and resources we have to tackle poor housing standards in York. To this end, this report explores the case for introducing additional licensing of HMOs in the PRS, where we know some of the worst housing standards can be found.

The York and North Yorkshire Housing Strategy recognises that, amongst other things, there are limited affordable housing options available in the city making it clear that the PRS will need to play a greater role in meeting housing needs going forward.

Landlord licensing is part of a wider set of measures to enable landlords in York to provide good quality housing within their communities and additional licensing can help alleviate the poor housing conditions and management in the HMO sector by setting and maintaining minimum standards across the city in the most vulnerable sector of York’s private rental market.

Ensuring standards are maintained delivers a wide range of positive outcomes not just for individuals but for society as a whole including:

· Fewer homes that pose a risk to health and wellbeing

· Improved outcomes for families and young people

· More independence for older or vulnerable households

· Lower carbon emissions, improved energy efficiency and reduced fuel poverty

· Less anti-social behaviour

· Neighbourhoods that are more cohesive, attractive and economically vibrant

Additional licensing would require all private landlords with new HMOs to apply for a licence for each property and meet certain property and management standards before they can be let to tenants.  Existing HMOs would be given set periods, outlined in our implementation policy to comply with certain conditions where they related to structural work.

3. Licensing of Houses in Multiple Occupation

The Housing Act 2004 has given councils the power to introduce additional licensing of HMOs, those which fall outside of the mandatory HMO licensing definition to improve conditions for tenants and the local community in certain circumstances.

3.1 What is an HMO?

A HMO is defined in Sections 254 and 257 of the Housing Act 2004. A HMO can be a building or part of a building if it is:

· Occupied by persons who form more than one household, and where those persons share (or lack) one or more basic amenities, such as a WC, personal washing and cooking facilities.

· A converted building containing one or more units of accommodation that do not consist entirely of self-contained flats. (There is no requirement that the occupiers share facilities)

· A converted building consisting entirely of self-contained flats, where the building work undertaken in connection with the conversion did not comply with the 1991 Building Regulations and more than one third of the flats are occupied under short tenancies.

The HMO must be occupied by more than one household:

· As their only or main residence;

· As a refuge by persons escaping domestic violence; or

· During term time by students.

In all cases:

· Occupation of the living accommodation must be the only use of that accommodation; and

· Rents are payable or other considerations are provided.

Under the Housing Act 2004, a householdcomprises:

· A single person;

· Co-habiting couples (whether or not of the opposite sex); or

· A family (including foster children and children being cared for) and current domestic employees.

Bed and breakfast and hostel accommodation occupied by individuals as their main and permanent address are also considered to be an HMO.

Certain types of buildings will not be HMOs for the purpose of the Housing Act. They are:

· Buildings, or parts of buildings, occupied by no more than two households, each of which comprise a single person only (for example, two person house or flat shares);

· Buildings occupied by a resident landlord with up to two tenants;

· Buildings managed or owned by a public sector body, such as the police, local authority, registered social landlords, fire and rescue authority and the NHS;

· Buildings occupied by religious communities;

· Student halls of residence where the education establishment has signed up to an Approved Code of Practice; and

· Buildings occupied entirely by freeholders or long leaseholders.

3.2 Mandatory licensing

Under the Housing Act 2004 certain types of HMO were defined as licensable. For these HMOs there was an obligation on the landlord to apply to the local authority, where the HMO is located, for a licence. Local authorities, therefore, must be in a position to manage the application for licences. Originally, licensable HMOs were those comprising three or more storeys with five or more residents living as two or more households that share some facilities. From 1 October 2018 the definition of a mandatory licensable HMO changed and the rule regarding 3 or more storeys was removed. All properties that meet the following criteria are therefore require a mandatory HMO licence:

· It is occupied by five or more persons; Is occupied by persons living in two or more separate households; and meets

· The standard test under section 254(2) of the Act;

· The self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats; or the converted building test under section 254(4) of the Act.

The total number of licensable HMOs of this nature within York using this definition is estimated to be 1,050. The council currently has issued 1030 licenses for mandatory HMOs and 14 new applications waiting to be determined. Figure 9 below provides the profile of licensed HMOs across the city.

Despite this intervention by the Government there will still be an estimated 2,000 HMOs in York that will not be subject to licensing provisions.

3.3 Additional licensing

In April 2015 the Secretary of State for Communities and Local Government gave Local Authorities general approval regarding the approval steps for additional and selective licensing designations in England.

When considering the introduction of an Additional licensing Scheme councils must proceed through the statutory process as laid out in Section 56 and 57 and the guidance issued under the Housing Act 2004: Licensing of Houses in Multiple Occupation and Selective Licensing of Other Residential Accommodation (England) General Approval 2015.

Section 56 of the Act places requirements upon councils when considering a designation for additional licensing of HMOs, in that councils must:

· Consider that a significant proportion of the HMOs of that description in the area are being managed sufficiently ineffectively as to give rise, or likely to give rise, to one or more particular problems either for those occupying the HMOs or for members of the public;

· Take reasonable steps to consult with persons who are likely to be affected and consider any representations made in accordance with the consultation and not withdrawn; and

· Have regard to any information regarding the extent to which any codes of practice approved under section 233 have been complied with by persons managing HMOs in the area (these codes relate to University managed accommodation).

Section 57 provides further considerations for councils in that they should ensure that:

· Exercising the designation is consistent with the authority’s overall housing strategy;

· Seek to adopt a coordinated approach in connection with dealing with homelessness, empty properties and anti-social behaviour affecting the PRS as regards combining licensing with other action taken by them or others; and

· Consider whether there are any other courses of action available to them (of whatever nature) that might provide an effective method of dealing with the problem or problems in question; and

· That making the designation will significantly assist them to deal with the problem or problems (whether or not they take any other course of action as well).

The General Approval provides the condition that any consultation period for the proposed designation should not be less than 10 weeks.

The guidance for the general approval also provides examples of properties being managed “sufficiently ineffectively” including:

· Those whose external condition and curtilage (including yards and gardens) adversely impact upon the general character and amenity of the area in which they are located;

· Those whose internal condition, such as poor amenities, overcrowding etc. adversely impact upon the health, safety and welfare of the occupiers and the landlords of these properties are failing to take appropriate steps to address the issues;

· Those where there is a significant and persistent problem of anti-social behaviour affecting other residents and/or the local community and the landlords of the HMOs are not taking reasonable and lawful steps to eliminate or reduce the problems; and

· Those where the lack of management or poor management skills or practices are otherwise adversely impacting upon the welfare, health and safety of residents and/or impacting upon the wider community.

Under section 60(2) of the Act the time must be no later than five years after the date on which the designation comes into force.

4. Supporting information

4.1 National context

The Office of National Statistics (ONS) projects there will be a population increase in the UK of 11 million people over the next two decades. The English Housing Survey (EHS) 2018/19 reported that the PRS accounts for 4.6 million or 19.9% of all households, representing a doubling in proportion since the 1990s.

A large proportion of the growth has come from families with children, who now make up nearly a third of private renting households nationally. Almost half of renters are aged 35 and over and nearly a third of renters expect to be renting for the rest of their lives. Only 6% of renters say it is their preferred choice of housing.

Generally speaking, property conditions in the private rented sector are worse than any other tenure. A third of privately rented homes do not meet the government’s Decent Homes Standard, while around one in 7 contain a hazard posing a serious danger to the health and safety of renters, much higher than rates in the owner occupied and social rented sectors.

Between 1998/99 and 2018/19, the proportion of private renters living in overcrowded accommodation increased from 3% to 6%. This compares to 1% of owner occupiers and 8% of social renters.

In 2018/19, the average (mean) rent (excluding services but including Housing Benefit) for households in the social sector was £102 compared with £200 per week in the PRS, a difference of £98 per week.

4.2 Local context - Strategic links

The Council Plan 2019-23 sets out the council’s overall strategic approach to services in York. With a clear vision to “improve peoples’ quality of life”, the council aims to deliver across eight objectives:

· Create a cleaner and greener city

· Well paid jobs and an inclusive economy

· Getting around sustainably

· Good health and wellbeing

· Safe communities and culture for all

· Create homes and world class infrastructure

· A better start for children and young people

· An open and effective council

The York Health and Wellbeing Strategy 2017-22 recognises that creating health, wealth and happiness requires more than simply managing people`s health problems. The health and wealth being of people can be improved if people have jobs, good housing and are connected to families and communities.

The York and North Yorkshire Housing Strategy 2015-21 vision is to “enable more new homes and for all housing to be of a quality, type and size which meets the needs of our communities and supports economic growth." Beneath this vision are number of key priorities, the most notable being:

· Increase the supply ofgood quality housing across all tenures and locations

· Ensure the housing stock reflects local needs

· Ensure new homes are of good design and environmental quality regardless of tenure

· Make best use of our existing stock and ensure it is a decent quality.

· Ensure all homes have a positive impact on health and wellbeing and are affordable to run

York private sector housing strategy 2016-21 sets out five strategic objectives designed to improve the condition and management of owner-occupied and PRS homes:  These include:

· Encourage and support owner occupiers to maintain safe homes, free from Cat 1 hazards

· Encourage, support and regulate private landlords and agents to provide safe and well managed properties, free from Cat 1 hazards. Inform and support tenants about what they can expect

· Maximise use of the existing housing stock to increase the supply of decent affordable homes

· Enable more sustainable homes by increasing energy efficiency and reducing fuel poverty

The strategy states that investing in our homes and ensuring standards are maintained delivers a wide range of positive outcomes not just for us personally but for the city as a whole including:

· Fewer homes that pose a risk to health and well being

· Improved outcomes for families and young people

· Lower carbon emissions improved energy efficiency and reduced fuel poverty

· More independence for older or vulnerable households

· Less anti-social behaviour relating to derelict or nuisance properties

· Less poverty and communities that are more cohesive, attractive and economically vibrant

The council’s Housing Standards and Adaptations team (the team) play a key role in regulating the private housing sector through education, persuasion and enforcement activities. The team are responsible for ensuring properties and landlords in the PRS meet minimum legal requirements.

The service has been working with landlords to improve conditions within the HMO stock of the city through the national mandatory HMO licensing scheme as well as statutory regulatory functions relating to maintaining minimum standards in properties in the rented sector.

A variety of interventions have been used in York to tackle problems in the HMO stock in the city. These range from providing advice and support to landlords and tenants through to the use of legislative powers to raise standards within HMOs.   

The primary driver for all of the work carried out by the team is the protection of the health, safety and welfare of residents living in HMO`s whether it is acting in an advisory role or regulatory role through enforcement. Where serious breaches occur legal action has been taken which has led to convictions and formal action. The outcome of this work is a healthier and safer environment in which people live.

The team works with a range of internal services including Housing options, Planning and Community Safety. The team contribute to the council’s corporate objectives and there are also strong links with external agencies including in particular North Yorkshire Police and Fire and Rescue services, HMRC and UK Border Agency.

The relationship with private landlords and letting agents within the city and other stakeholders has developed over the years and events are held to inform landlords and agents of key issues that may affect them. The service also meets with letting agents, college domestic bursars and other strategic partners on a regular basis. Since 2016 it has been a legal requirement for all licence holders to hold a recognised training qualification as a condition of HMO licensing. Following receipt of a successful bid to the MHCLG the team is now able to offer online training to all landlords.

Despite the above many landlords remain disengaged until formal action is pursued by the council.

4.3 Demographics

York’s population increased from 190,800 in 2008 to almost 210,000 in 2018, a rise of over 10%.  Almost 1 in 4 (23%) of all residents in York are aged 18-29, a much higher proportion than many other cities. Since 2001 the proportion of people in this age group rose by over 30%. Like the national picture, younger households are more likely to rent privately than older households; in 2017 those in the 25 to 34 years age group in York’s PRS represented the largest group (35%).

A significant factor in York’s relatively young age profile is the presence of two large universities which together host around 22,000 students each year. Whilst both universities seek to offer purpose built student accommodation, this is not yet sufficient to meet all needs so many look instead to York’s PRS.

4.4 Housing in York

Around 85% of the 89,590[3] households in York are in the private sector, either owner-occupied (68% - 60,999 households) or privately rented (17.5% - 15,671 households). Virtually all the rest (15% - 13,439 households) are let as either social or ‘affordable’ rent by the council or registered social landlords (RSLs).

There are significant pressures within York’s housing market as demand outstrips supply. For many of the past 10 years the supply of new homes has fallen short of identified need. A significant minority of households face a worsening of affordability as the cost of home ownership and private rents rise faster than local incomes. In 2019 Centre for Cities[4] found that York’s housing affordability ratio stood at 9.05.

Fig 1. Housing affordability to earnings ratio

High housing costs have placed additional pressure on social and affordable rented accommodation let by the council and local RSLs. There are currently around 1,500 households on the council’s housing waiting list hoping to secure one of the small number of social and affordable rented homes that become available each year. A shortage of affordable accommodation pushes further demand pressures onto the PRS, including HMOs.

PRS accommodation meets a diverse range of needs. It provides a flexible option for those who do not wish to buy, face barriers to buying or are saving for a deposit. It offers a range of shared accommodation for smaller households and is increasingly used by a growing number of families. With rising costs and limited social rented homes the sector looks set to remain an important source of housing for the foreseeable future.

In line with national trends, the PRS in York has seen considerable overall growth over the past 20 years. In 2001 the sector was reported to be around 10% of total stock and this has increased to 17.5%.[5]

4.5 HMOs in York - Number and distribution

Data shows there are currently 3,076 (19% of PRS) HMOs in York, not including university halls of residence, of which 1,029 are licenced.  The data and hotspot density map below clearly shows a larger concentrations of HMOs in certain wards focussed within close proximity of the city centre and the two major university complexes.

Wards with the highest number of HMOs (i.e. over 100) include Hull Road, Guildhall, Fishergate, Heworth, Micklegate, Clifton, and Osbaldwick and Derwent.

Wards with the highest concentrations of HMOs (i.e. over 10%) include Hull Road, Guildhall, Fishergate and Fulford and Heslington.

Table 1. HMOs by ward

Fig 2.  Distribution of HMOs - Hotspot Density

Fig 3. Distribution of licenced HMOs – Hotspot density

Planning policy in the form of an Article 4 Directive has been developed by the council to create and sustain ‘mixed and balanced communities’, by encouraging the spread of sustainable and viable options for accommodation across the city. Notwithstanding, it is clear from the data above that the city does have several areas where HMOs within the PRS are substantial in number.

The council must consider if a significant proportion of the HMOs in the area are being managed sufficiently ineffectively as to give rise to, or be likely to give rise to, one or more particular problems either for those occupying the HMOs or for members of the public.

4.6 Property conditions

Information concerning the HMO stock in the city has historically been built up from operational records, however, landlords and agents are most reticent to provide the council with data unless specifically required to do so. Additional licensing would enable the collection of more detailed and accurate information about the HMO stock. This is one of the less apparent benefits of licensing.

The figures below provide relevant information regarding the stock and conditions in the PRS as reported in the 2015 assessment of housing conditions.

As previously described, MHCLG guidance provides examples of properties being managed “sufficiently ineffectively” and includes;

· those where the external condition and curtilage (including yards and gardens) adversely impacts upon the general character and amenity of the area in which they are located; and

· where the internal condition, such as poor amenities, overcrowding etc. adversely impact upon the health, safety and welfare of the occupiers; and

· where landlords of these properties are failing to take appropriate steps to address the issues.

It is well reported that poor housing conditions, including overcrowding and homelessness, are associated with property age and the effect of such conditions have a direct impact on health including in particular, cardiovascular diseases, respiratory conditions and mental health problems.

The age of dwellings in the PRS is therefore an important consideration as there is a direct correlation between property age and conditions - the worse conditions are generally present in older stock types. Figure 4 shows the dwelling age profile by ward which provides a means of identifying areas with properties of certain ages; for example, Guildhall, Micklegate, Clifton, Fishergate wards exhibit above average concentrations of pre-1919 and private-rented properties; sectors known to be problematic in condition terms.

Fig 4. Dwelling age by ward

Fig 5. Rates of pre-1919 housing by ward

4.7 Energy Performance of HMOs

Analysis of Energy Performance Certificate (EPC) data shown below appears to show a strong correlation between wards with higher numbers of HMOs and prevalence of lower ratings (i.e. below D) both for licenced and un-licenced HMOs. 

Table 2. EPC ratings by ward – licenced and un-licenced HMOs

Table 3. EPC data for licenced and un-licenced HMOs in York

4.8 Housing health and safety rating system (HHSRS)

The HHSRS provides the minimum standard for housing, in that a property should be free from a Category 1 hazard. There are 29 criteria for assessing hazards in a property and typically hazards arise from faults or deficiencies in the dwelling which could cause harm.

In short, a dwelling should be able to supply the basic needs for the everyday life of the range of households who could normally be expected to live in a dwelling of that size and type. The dwelling should not contain any deficiency that might give rise to a hazard which interferes with, or puts at risk, the health or safety, or even the lives, of the occupants.

The council is under a duty to take action in the case of Category 1 hazards and if necessary it may carry out any necessary remedial work and reclaim the costs. The council has a power (discretion) to take action in the case of all Category 2 hazards (i.e. those which carry lower risks).

Figure 6 below shows the number of hazards, grouped into major hazard categories, in York compared to England as a whole, across the private sector housing stock (owner occupied and privately rented)[6]. Compared to England, York has a similar level of dwellings with category 1 hazards, although there are higher rates of falls on stairs. Around 15% of all private dwellings in York have a category 1 hazard.

There are an estimated 12,920 category 1 hazards in York’s private sector stock, of which over 4,194 (32%) are within the privately rented sector.

Fig 6. Percentage of private sector stock with HHSRS hazards

Fig 7.  Estimated number of category 1 hazards in York by tenure

The two main hazards in the private rented sector are falls on stairs (2,015 hazards) and excess cold (1,088 hazards).

4.9 Enforcement of HMOs

The reason why landlords of HMOs have a tougher regime to deal with is because of all of the problems that can arise in this type of accommodation. Although there are many well managed and trouble free HMOs, generally most are at the lower end of the scale. Tenants, especially those renting a room in a shared house, are often unable to afford anything more. Frequently they will be on housing benefit and because they are unrelated but living in close proximity, studies have shown that there are far more likely to be problems with HMOs.

The council has always taken a positive approach in dealing with concerns about HMOs and concentrates on four main areas of enforcement:

· Unlicensed HMOs

· Non-compliance of licence conditions

· Management

· Health and Safety

Under the Housing Act 2004 the council is responsible for administering the mandatory licensing scheme described earlier in this report. Where the council suspects there is an unlicensed HMO it has powers to inspect without providing any notice to the occupants or the owner. Once a property has been found to be operating without a licence the council will instigate a formal investigation and decide, based on a range of risk factors, what course of action is appropriate.

In cases of poor management the council has powers under the Management of Houses in Multiple Occupation (England) Regulations 2006. The general principle of the regulations is to protect the health, safety and welfare of occupants by requiring landlords and managers of HMOs to comply with certain duties.

Effective management procedures should take account of the characteristics of the residents, including age, vulnerability, disabilities or dependencies. It may be necessary to make special provision for individuals such as providing written information in large print or in another language.

Effective management also relies in part on residents being fully aware of their responsibilities. They should be made aware that they are either required by regulation or by the terms of the tenancy agreement not to act in a way that obstructs the manager, or causes nuisance or annoyance to neighbours, and also be made aware of the consequences if they do not comply with this.

HHSRS applies to HMOs as any other housing accommodation and the council is required to keep property conditions ‘under review’. The application of HHSRS in HMOs is a reactive approach as the council relies upon residents and tenants to complain so that it is aware of issues.

In the case of licensed HMOs the council is required to carry out a HHSRS inspection once every five years. This is very much reactive. More recently with austerity, resources have resulted in reactive services taking priority.

During the period 1 October 2018 to 30 September 2020 the council’s housing standards team received 872 service requests including empty property enquiries.  Of these, 698 related to private sector housing conditions and tenancy relations. 156 of these were dealt with by the technical support team relating to HMO general advice including advice on the HMO licencing process. 542 were passed to the HMO enforcement team of which 63 related to tenancy advice matters and 415 related to housing conditions such as damp and mould, overcrowding and lack of gas safety certificates.  64 requests related to investigations into potential un-licenced HMOs

The council adopts a robust approach to taking enforcement and has a mechanism to resolve issues either through legal action, which may result in the landlord/licence holder or manager being prosecuted, or through further licensing controls such as revoking a licence and restricting their ability to run HMOs.

Where necessary and appropriate the council will pursue formal action against landlords and agents.

The council also adopts informal measures such as re-inspections, which carry a higher charge for licence renewals or require landlords to employ the services of a competent and professional agent.  This is dependent upon a number of factors but in general terms consideration is given to the following:

• The gravity of the offence alleged;

• The complexity of what is in issue;

• The general record and approach of the person responsible;

• The severity of the consequences for the defendant and others affected; and

• Whether it is in the best interests of the public to deter others from similar failures.

In some cases the breaches found do not always warrant formal action so the council will adopt an informal approach and provide the landlord with a warning or caution. If a landlord fails to heed these warnings about problems then the council has applied enforcement and prosecuted where the problem is serious enough and it would be in the public interest to take such action.

4.10 Impact of COVID-19

The restrictions/changes caused by the Pandemic have been significant in a number of ways including tenants initially being restricted to their homes and using them for the first time as their work/office space; landlords/agents were unable to respond to complaints about repairs during the full lockdown or as lockdown was eased due to the availability of furlough arrangements by their contractors and initially the reduction in the number of proactive inspections carried out by officers compared to the same period last year.

Government guidance issued early on the Pandemic changed the council’s approach to tackling issues advising to take a more informal approach to resolve issues found. Although this increased the workload of officers as it meant that time periods to ensure compliance were reviewed and extended both for licensing conditions and for notices, it enabled officers to still concentrate on the worst conditions in the poorest sector.

Going forward we understand that there are likely to be serious delays in the court system due to the backlog of cases. It is even more important that during this period  that there is a mechanism such as Additional HMO licensing that seeks to bring up to standard the poorest properties by identifying the properties/landlords and working with the sector to ensure compliance.

Fig 8. HMO inspection data for the second half of 2018 following the implementation of the extension HMO licensing

Inspections	Category 1 Hazards	Category 2 Hazards
117 inspections 16 rooms found to be mis-measured	4 category 1 Hazards 1 lack of natural lighting 3 excess cold 1 suspended Prohibition Notice	86 Category 2 Hazards 74Fire safety 8Fall Hazards 2 Structural collapse 1    Crowding and Space 1  Collision and Entrapment 18 Hazard Awareness Notices

Fig 9. HMO inspection data for the second half of 2019

Fig 10. HMO inspection data for the first half of 2020

Fig 11.  HMO renewals inspection data for the second half of 2019

Fig 12. HMO renewals inspection data for the first half of 2020

4.11 HMO Licence Conditions

The following table outlines the type and number of conditions imposed on HMOs that were licensed during the first six months of licensing after the 1^st October 2018.

All HMOs are issued with standard licence conditions but where the licence holder, or property or management fails to meet a required standard then a specific licence condition is imposed. The table shows the number of HMOs that failed to meet the standards in 2018. The licence holders have all been issued with conditions to ensure that these matters have been resolved. It is expected that should additional HMO licensing is extended to other HMOs then similar levels of issues will be found.

Table 4. Type and number of conditions imposed on licenced HMOs in first six months of licencing.

Standard licence conditions	New HMOs and existing HMOs that have been renewed
The number of properties failing the room size and a condition imposed. NB this could relate to more than one room in the property	58
The number of properties failing to meet  the required level of kitchen facilities for the number of occupants and households	192
The number of properties failing to meet  the required level of bathroom facilities for the number of occupants and households	12
The number of properties failing to meet  the required level of toilet facilities for the number of occupants and households	82
The number of properties failing to provide the level of controllable heating facilities for the number of occupants and households	25
The number of properties failing to meet the required minimum energy efficiency levels and licence conditions imposed	78
The number of properties failing to meet  the required  level of carbon monoxide detection in the house	205
The number of licence holders who fail to meet the required level of training  by attending and passing a recognised training course	312
Total	609

4.12 Environmental complaints data

Analysis of complaints data gives insights into potential correlations between anti-social behaviour, noise and waste complaints and areas with higher numbers and concentrations of HMOs.

There appears to be some correlation between anti-social behaviour complaints and areas with higher numbers of HMOs, though these areas are typically within or adjacent to the urban core where ASB may more typically be found and reported. There appears to be no correlation with ASB and HMOs in Osbaldwick and Derwent ward.

Likewise, there appears to be some correlation between HMO prevalent areas and noise complaints, with five of seven areas with the most HMOs appearing towards the top of the list.  Again though this may not be evidence of a direct causal link as areas with far fewer HMOs also feature in the top 10 wards. The concentration of noise complaints is within or adjacent to the urban core where housing is more densely situated.

Waste complaints are also concentrated within or towards the urban core where wards with the greatest number of HMOs are found, though again some of this could be related to littering and commercial operations within or towards the city centre.

Table 5. Anti-social behaviour complaints by ward Dec 2019 – Oct 2020

Number of Anti-Social Behaviour Complaints by Ward - 16th December 2019 to 16th October 2020
Ward (those with more than 100 HMOs shown in red)	Number of Complaints
Guildhall Ward	58
Westfield Ward	34
Micklegate Ward	21
Holgate Ward	20
Clifton Ward	9
Acomb Ward	7
Heworth Ward	6
Fishergate Ward	5
Haxby & Wigginton Ward	4
Hull Road Ward	4
Huntington & New Earswick Ward	4
Dringhouses & Woodthorpe Ward	3
Strensall Ward	3
Rawcliffe & Clifton Without Ward	2
Rural West York Ward	1
Bishopthorpe Ward	0
Copmanthorpe Ward	0
Fulford & Heslington Ward	0
Heworth Without Ward	0
Osbaldwick & Derwent Ward	0
Wheldrake Ward	0
Total	181

Fig 13. Antisocial behaviour – Hotspot density

Table 6. Noise complaints by ward

Noise Complaints by Ward - 16th December 2019 to 16th October 2020
Ward (those with more than 100 HMOs shown in red)	Number of Complaints
Westfield Ward	350
Guildhall Ward	294
Heworth Ward	294
Holgate Ward	159
Micklegate Ward	148
Hull Road Ward	122
Clifton Ward	114
Rawcliffe & Clifton Without Ward	93
Acomb Ward	88
Fishergate Ward	75
Huntington & New Earswick Ward	63
Dringhouses & Woodthorpe Ward	43
Osbaldwick & Derwent Ward	31
Heworth Without Ward	30
Haxby & Wigginton Ward	27
Strensall Ward	19
Bishopthorpe Ward	15
Rural West York Ward	15
Fulford & Heslington Ward	14
Wheldrake Ward	12
Copmanthorpe Ward	4
Grand Total	2010

Fig 14. Noise complaints – Hotspot density

Table 7. Waste complaints by ward

Waste Complaints by Ward - 16th December 2019 to 16th October 2020
Ward (those with more than 100 HMOs shown in red)	Number of Complaints
Guildhall Ward	111
Micklegate Ward	85
Holgate Ward	75
Clifton Ward	63
Westfield Ward	40
Fishergate Ward	26
Heworth Ward	26
Hull Road Ward	19
Dringhouses & Woodthorpe Ward	15
Rawcliffe & Clifton Without Ward	14
Huntington & New Earswick Ward	10
Osbaldwick & Derwent Ward	9
Acomb Ward	8
Rural West York Ward	7
Haxby & Wigginton Ward	6
Copmanthorpe Ward	5
Strensall Ward	5
Bishopthorpe Ward	4
Fulford & Heslington Ward	4
Heworth Without Ward	3
Wheldrake Ward	1
Grand Total	536
* includes Littering and Dumped Waste

Fig 15. Waste complaints – Hotspot density

4.13 HMO Case studies

The English Housing Survey (EHS), which is an annual survey conducted to “determine people's housing circumstances and the condition and energy efficiency of housing” Department for Communities and Local Government (2014) English Housing Survey – Headline report DCLG February 2015, reported that HMOs are often old, solid wall properties with low levels of insulation and sometimes expensive electric heating systems and….“Section 257 HMOs pose particular problems because they are by definition older, poorly converted properties”.

The evidence and experience over the years, in York, is that some of the worst conditions are present in HMOs. The case studies below highlight what we have uncovered in recent years:

Guildhall Ward 

Property A was a converted mid terrace house situated on a main road, which is occupied by five student tenants.  The ground floor comprises two bedrooms, a kitchen/lounge area and a separate WC.  Bedroom 2 was in the middle of the house and sandwiched between bedroom 1, the communal kitchen/lounge area and the hallway.  As a result of this, the bedroom had no outside window and no natural light or fresh ventilation.  It did have a UPVC internal window which opens into the communal kitchen/lounge area, giving no privacy or any fresh air.  In addition this window was also a fire hazard as it did not give a 30 minute fire resistance and was adjacent and looked into a communal kitchen. 

The above hazards were scored under the HHSRS system for lighting and fire hazards, lighting scored a band C Cat 1 hazard, fire scored band F, Cat 2 hazard.  A suspended prohibition notice was served

Clifton Ward

Property B was a converted mid terrace property occupied by 5 tenants who were not a cohesive group. The ground floor comprised two bedrooms, kitchen and bathroom. There were signs of damp in the area between the kitchen and bathroom. The front bedroom showed signs of damp to the front walls, there was no Thermostatic Radiator Value (TRV) on the radiator and the door was an old Pine door.

The second bedroom was tenanted by a male who was away for long periods of time, the bed was positioned in the middle of the room, the door which was old Pine door and was badly damaged. Upstairs in the property there were three further bedrooms, a bathroom and separate WC.

The smallest bedroom at the rear of the property was too small to be used. The front bedroom also showed signs of damp to the front wall and the door on middle bedroom also showed signs of traumatic damage and was an old Pine door.

The separate toilet was very small, cold, with no wash basin and the suspended ceiling was missing. The upstairs bathroom was at the front of the property and when the shower curtain was pulled back from the window area, the state of the wooden sash window was revealed, the bottom wooden frame was hanging off at a 45 degree angle and appeared to be only held in place in one corner, the glass had no support and the condition of the rest of the frame was extremely poor and required immediate repair. This would not have been found had the shower curtain not been moved. On inspection it was found that the property requires updating, redecoration and repair in several places. Notice was served on the landlord. 

Heworth Ward

During an inspection of property C, in addition to fire safety issues, we noted potential structural movement with numerous external and internal cracks in the walls around the ground floor extension housing the shower room and bedroom 2 of the property. We asked to be provided with a structural engineers report to inform of any works which need to be carried out.  It found that the extension was suffering from structural movement and that although the structure was safe, further works were necessary within the next 6 – 12 months to limit the risk of further damage.  The landlord confirmed that they would be undertaking the recommended remedial work in the report within the timescale stated.

Fishergate Ward

Property D was a 1960s open plan house with limited fire safety measures.  Means of escape straight down an open plan staircase linking the first floor landing and the open plan lounge.

Deficiencies found:

· Lack of general 30 min separation

· No interlinked detection

· Ceiling breach in kitchen

· Lack of low level full length railing

Action required:

· Escape windows to four of the six bedrooms

· Fire doors throughout to include removal of an ornate glass pane between the lounge and the kitchen

· Thumb turn on FEP in rear yard as GF bedroom means of escape was to the small enclosed rear yard

· Interlinked detection

· Full length railing to be fitted to reduce the gap at floor level

A Hazard Awareness Notice was served. 

Property E was a large detached property of 23 lets with 35 occupants. The lets comprised of flats, bedsits and bedrooms. The property had three shared kitchens but no communal living accommodation. On inspection the property was found to be run down. One of the bedroom lets was found to be under the 6.51m2 of useable floor space. Also two bedrooms were over the 6.51m² rule but well under 10m² of useable floor space. Six other bedrooms which were all over the 6.51m² rule were looked at due to the lack of a communal living space. Using old guidelines and liaising with other local authorities, we worked out that due to the lack of this communal living space one person should have 10m² of useable floor space, 2 persons should have 15m² of useable floor space and a kitchen area should be at least 3m².

From the initial inspection we had initially found that three of the bedrooms should not have any people using them, one as mentioned was under the 6.51m² useable floor space rule.

We measured the six rooms in question in the presence of the HMO Licence applicants. We found after measuring these rooms a further two rooms were under the 10m² of useable floor space. So in total five letting units were not to be used.

HMO licence conditions were imposed outlining how many people could live in each of the units in the property, that 5 of these units could not be let under the current set-up at the address. We talked with the owners of the property and they are now in the process of converting a large bedroom near one of the large kitchens, to make a large kitchen diner/ living area, to service the needs of the residents in the rooms that were deemed to be unusable. We have stipulated what should be in the new area, i.e. comfortable seating, table and chairs etc.

Hull Road Ward

Property F was a two storey HMO with six bedrooms. One bedroom was below 6.51m2 (not occupied)

Deficiencies found included:

· Lack of fire detection and fire doors

· Built in appliances damaged and broken but not replaced by agent

· Furniture in poor condition and not compliance with The Furniture and Furnishings (Fire Safety) Regulations 1988.

· External communal area (rear garden) overgrown and poorly maintained

· Lack of refuse receptacles – Agent advising tenants it’s their responsibility to supply

· Leak to WC and bath (two separate rooms) which had cause water ingress to floor boards and damages floor covering (ongoing and not addressed by Agent)

Conservatory to the rear had rotten windows causing water seepage and infestation of wood lice (potential Excess cold) unable to heat due to drafts around windows.

A Hazard Awareness Notice was served for fire safety and management regulations breaches served for failure to maintain property.

5. Consultation

There is a statutory requirement to consult for a minimum period of 10 weeks on any proposals to designate an area subject to Additional Licensing. The results of the consultation will be considered as part of the development of the proposed structure of any additional licensing scheme.

The consultation will need to demonstrate that it has satisfied the legal requirement to take reasonable steps to consult with those people who may be affected by the designations. This includes neighbouring areas outside of the identified areas.

Subject to Covid restrictions during the consultation period a plan will be been produced setting out how the Council will meet these requirements, in summary this will include the following.

· Online questionnaire tailored to gauge cross section of views on the proposals

· Focus groups with key stakeholder groups, Universities and Student bodies

· Residents and other key organisations such as the Police

· Drop in sessions in various parts of the City

· E-communications through social media and the Council`s website

· Workshops with Landlords and Agents to present the proposals.

6. Option appraisal and the benefits of additional licencing

6.1 Option appraisal

As part of the Option Appraisal process the council must consider;

· whether there are other courses of action available to them that might provide an effective method of dealing with the problem or problems in question;

· that making the designation will significantly assist them to achieve the objective; and

· that making the designation will significantly assist them to deal with the problem or problems in question

Alternative approaches to extending HMO licensing have been considered and evaluated against the strengths of additional licensing. Each approach is a valuable tool for dealing with the problems in the HMO stock. However in each case the weaknesses outweigh the strengths.

The options considered include possible interventions for tackling substandard and ‘problematic’ smaller HMOs in the city as set out below:

Do nothing further:

The Council has already intervened by introducing an Article 4 Directive to manage the numbers of HMOs across the city. By doing nothing more would leave the local housing market to be the driver for landlords carrying out improvements to their properties.

The council would be limited to a basic complaint response service with action by other departments and agencies on a largely ad hoc basis. The option is reactive and relies on the housing market as a driver for landlord-initiated housing improvement across the board. All council services would continue to use their existing enforcement powers.

Informal area action (Proactive inspection programme):

This would be delivered through a non-statutory Action Area, considering parts of the city where there were concentration of poorly managed or maintained properties. The driver for the housing improvement would come from a combination of council activity from different services focussing work in the area and landlord activity (including peer pressure)

Voluntary accreditation:

The council initially supported the Universities in running a Voluntary Code of Practise for landlords to sign up to a set of standards up until 2012. However there were serious weaknesses with the scheme in that there was no supporting inspection programme to ensure that the standards that landlords were signed up were being adhere to. In 2012 with the Universities supporting this scheme brought this to a close and was replaced by the council run voluntary accreditation scheme. This was initially successful, however with the extension of mandatory HMO licensing to HMOs irrespective of the number of storeys the number of landlords dwindled to a level which made it unsustainable and this was brought to a close in 2018. 

Targeted use of Interim Management Orders (IMOs) and Final Management Orders (FMOs).

The Housing Act 2004 gives local authorities powers to use Management Orders for talking comprehensive and serious management failures.

City-wide additional licensing scheme.

Licensing would be extended to all HMOs in the city (in all wards) and would include all smaller multi-occupied properties not currently subjected to Mandatory HMO Licensing irrespective of the evidence relating to housing conditions and the impact that HMOs are having on their residents.

Area-based additional licensing scheme.

Licensing would be introduced in selected wards in the city where there is the highest number and concentration of HMOs and where evidence demonstrates there is the greatest need.

In general, approaches other than additional licencing are judged to have the following limitations:

· Most other schemes are expensive and would require funds being taken from the Council Tax. This seems unfair when many of the problems are due to poor management practices by landlords or agents operating in a buoyant market place. Additional licensing would be self-financing with the fee covering the cost of licensing; the fee will be paid by the applicants and not by the wider community.

· The use of IMOs on individual properties does not appear to give value for money, as the amount of resources being put into one property will mean that other properties cannot be tackled. It is clear from our experience that if this were to be the only sanction available then operating more than a few IMOs at a time would not be feasible given the lack of funding. This approach can also be seen to be heavy handed and can cause problems for the Council when attempting to work with and engage with landlords.

· None of the proposals give a long-term solution to the problems within the HMO sector,

Other schemes will not give the council detailed and accurate information concerning the HMO stock. This is essential in order to undertake meaningful prioritisation and work planning. Such information is not only used in the area of Regulatory Services but is also used and required by colleagues in other services.

6.2 Benefits of additional licensing

We know from experience that there will be a small, and probably vocal, minority of landlords who will never see the overall value of Additional licensing of HMOs. They take an essentially narrow, self-interested view. Their interest is focused on financial returns; their criticism of any form of licensing is couched in terms of ‘unnecessary financial burden’ and ‘pointless bureaucratic interference’.

On the other hand, the majority point-of-view takes a wider perspective on the provision of stock for the housing rental market. This group includes, most landlords and agents.

While the general public may not be directly involved in paying or receiving rent, they also experience the impact that HMOs have on the social and political economy of York. The view that HMO Licensing is instrumental in the improvement of facilities, management and safety in the housing rental market is echoed by a broad cross-section of the city. Licensing is seen as one strand in preventing the long-term decline in the amenity of the urban environment.

They recognise that wider licensing removes the inequalities caused by partial regulation and spreads costs and obligations in a fairer way. They recognise that it creates a common footing and can help agents. Provided that it is properly run, they see it as helping the market function effectively.

Benefit: Consistent approach to HMOs in York

Additional licensing will extend and continue the process of upgrading of HMO rental stock already begun by the Mandatory scheme. Additional licensing will add a significant portion of the York HMO market to the list of those houses where the council currently is involved with licensing.

This will mean that such houses will be subject to the same evaluation and improvement regime as the larger houses already covered by the national scheme. York has in the order of 2,000 HMOs occupied by less than five occupants. They deserve to be afforded the same protection as people in licensed HMOs. Without additional licensing there is significant and growing disparity in York’s HMO market.

The inclusion of all multi occupied houses as licensable HMOs will enable York to develop a consistent approach to the whole of the HMO rental market. When there is a critical mass of houses subject to the same requirements, other houses (whether licensable or not) will be obliged to comply with that standard by market pressures. A house presented for rent without offering those facilities is unlikely to be attractive tenants.

Benefit: Appreciation of property values

York has a buoyant housing market and this being the case means that there will be a financial benefit to individual landlords in the longer term as accommodation standards are raised across the HMO sector. The benefit will be apparent in the capital appreciation of the property value. The heavy usage that multiple households inflict on the fabric of a building usually causes a far more rapid decline than does that of a single family.

Where there are heavy concentrations of HMOs, as is the case in York, it can lead to a general reduction in the amenity of whole suburbs and the relative loss of value of specific properties. A bespoke agreement between landlord and local housing authority as a result of licensing ensures that standards are maintained and improvements encouraged. In turn, this means that neighbourhoods will not deteriorate and thus property values are enhanced.

Benefit: Links with landlords

The formation of a formal but direct and individual link with the council, which the Licence Conditions afford, also allows for a beneficial flow of information between the authority and landlords. Critically the licensing condition which requires a licence holder to hold a recognised training qualification ensures that all licence holders have an understanding of the laws which relate to operating a HMO. This proactive approach will support not only raising physical standards but also improve management of the properties. Landlords and Agents can also sign up to receive news and ideas relevant to the development of the market sector. They can also provide accurate data on which council can make informed decisions on issues which impact on both landlords and tenants.

The creation of a dynamic partnership between the landlord and council is an under-rated benefit of Licensing. There are other, ancillary benefits for landlords through additional licensing.

Benefit: A recognised group of landlords

Landlords, once subject to licensing, become part of a specific group recognised in law and by government policy. This has implications for their ability to organise themselves to influence HMO related decisions. Recognition as a licensed landlord will have several flow-on benefits.

It may have the benefit of providing for simpler justification to lending institutions when it comes to securing finance if the local housing authority requires specific work to be done.

Agents and letting organisations such as student housing departments are more likely to accept landlords if their bona fides is supported by being licensed. Licensing brings its own degree of reliability and assurance to the relationship between landlord and agent.

That benefit is reinforced by the fact that licensing requires landlords to keep their letting arrangements (either privately or through an agent) on a more business-like footing. A licensed landlord is obliged to do things formally, like provide written terms of occupancy rather than ad hoc verbal arrangements that too often result in disputed interpretations of the agreement.

Benefit: pro-active involvement eliminates reactive work

Licensing also provides a consequential benefit in that it eliminates or mitigates many of the issues that generate tensions between landlords and tenants. Licensing is a means of pre-empting problems (for example, damp or ventilation issues leading to poor living conditions) before they become matters of contention and stress that the landlord would otherwise have to manage. Licensing will go a long way to ensure there are fewer hassles for a landlord from, for example, anxious parents of students who rent a house. It will at least, provide a recognised mechanism for resolving any disputes without the cumbersome mechanisms of prosecution.

The council already deals with much of this work but in different capacities. The work is normally in response to a service request. Reacting to something after damage has been done is usually a negative and inefficient way of resolving an issue. Additional licensing will allow for positive, pro-active and efficient involvement, and should eliminate many problems before they occur.

7. Impact of licensing

One of the biggest criticisms of licensing schemes is that the cost associated with the licensing fee will be passed onto tenants by an increase in rent. In 2018/19 City of Coventry Council conducted research into this area and made a comparison of rents from 2014- 2018 between areas in England that had discretionary licensing schemes and those that did not, in order to establish if there was any evidence to show that discretionary licensing increases rent.

The research showed that rental values had increased in Coventry, on average by 19% between 2015 and 2018 compared to 11% in the West Midlands and 8% in England over the same period.

Table 8. PRS rents between 2014 and 2018

The summary of overall rents was used to conduct the comparison of rents in areas with and without discretionary licensing schemes in other areas across the West Midlands region and England. The comparison can be seen in Figure 23 below.

Table 9. Comparison of rents in areas with and without licensing

As can be seen from Table 9 above, rental increases have occurred across all authority areas, with the most significant in Coventry (19%) and Sandwell (11%). Both of these areas do not currently operate discretionary licensing schemes.

It is also notable that those areas with discretionary licensing schemes (Wolverhampton, Stoke on Trent, Worcester and Nottingham) experienced rent increases below the average levels in the West Midlands and, in a few instances (Wolverhampton, Worcester and Nottingham) below those reported across England during the same period.

The Office for National Statistics (ONS) recently reported that private rental prices paid by tenants in Great Britain rose by 0.9% in the 12 months to July 2018, down from 1.0% in the 12 months to June 2018.

Data available for the period from 1st April 2017 to 31st March 2018 shows that there was an 8% increase in average rents in Coventry compared to 2.5% in the West Midlands and a 3% decrease across England. Figure 24 provides the breakdown for each category reported.

Table 10. PRS rents during 2017 to 2018

Further analysis of data for this period shows that the average rent increases across the West Midlands were relatively consistent and well above the average for England. Coventry and Worcester experienced the highest increases with 8% and 5% respectively. Overall the greatest increases occurred in areas which do not have discretionary licensing schemes in operation.

Table 11. Percentage of PRS rent increase during 2017-18

Despite the perception that licensing increase rents it is apparent that there is very little evidence to suggest that discretionary licensing schemes are directly responsible for rental increases. Where there has been an increase in rent it is more likely associated with supply and demand and not as a direct result of the introduction of discretionary licensing schemes.

This situation is likely to worsen as a result of other pressures, for example plans introduced by the Government to remove the higher rate of tax relief on buy to let mortgage interest rate payments will force landlords to ‘lift rents higher’ and pass the cost of the Government’s actions onto tenants.

The CML has reported that activity in the buy-to-let market is set to drop as a result of the recent tax crackdowns on buy-to-let regulations and these are expected to lead to a further 'professionalisation' in the sector, while some amateur landlords could see their properties become less profitable.

It is likely that rents in York will continue to rise as a direct result of these market pressures and by a lack of housing supply generated by fewer buy-to-let properties but not as a direct result of the introduction of discretionary licensing schemes.

8. Conclusion

Additional licensing is a viable solution for York, particularly to address poor property conditions and energy efficiency in the HMO sector. This report states the reasoning and evidence collated by City of York Council required to proceed with a formal consultation on the proposal to declare York or certain wards of the city as an area for additional licensing.

The scheme would cover all HMOs in York or certain parts of York, irrespective of the number of storeys that are occupied by less than five unrelated persons and all s.257 HMOs (buildings converted into self-contained flats) where the building is wholly occupied by tenants.

The buoyant housing market in York continues to do well with the numbers of HMOs rising each year. Landlords who have chosen to evade controls have operated without regulation for many years, which has resulted in HMOs often being let out in an unsafe manner.

The mixture of property types in the PRS in York coupled with the strong student market means that a high number of HMOs fall outside mandatory licensing. Such properties are next door to, or across the street or around the corner from those that are licensable.

The occupants of licenced properties benefit from the controls on the quality and management of licensed properties. Un-licenced properties may come to the council’s notice from service requests from tenants or, more often, from worried parents but many unsatisfactory houses are never reported so standards are not enforced and the quality of the rental stock does not improve.

City of York Council has embraced mandatory HMO licensing which has proved to be a valuable tool in improving poor conditions and management practices in HMOs across the city. The extension of the mandatory scheme to cover more HMOs can only add to this improvement.

The preferred stance of the council is that licensing should apply to all HMOs in an agreed area in the same way, for example that licensing applies to all taxis. The new powers therefore would give the council the opportunity to make this a reality.

With the introduction of additional licensing controls applied to the whole of the HMO sector either across the city or within certain target wards, the council will be able to take a more proactive approach to dealing with the sector.

The council wants to continue to develop its links and working relationship with landlords and agents in the city, which have been greatly enhanced by mandatory licensing and it will continue to investigate other interventions that could complement additional licensing.

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[1] Number of private sector HMOs excluding University owned and privately owned halls of residence, which are regulated by Approved Codes of Practices

[2] Coventry case study outlined in section 6 of this report

[3] ONS estimate 2018

[4] Centre for Cities – Cities Index 2020

[5] ONS estimate 2018

[6] BRE Health Impacts and Costs of Poor Housing in York 2015