A recent article in the Evening Standard highlighted the increase in licensing of Houses of Multiple Occupation and selective licensing of other landlords in London.
Newham has been the leader in licensing in London and has been quick to promote its scheme and the underlying philosophy to Environmental Health officers in other boroughs. Their message is clearly getting through. The Standard article mentions Croydon, Brent, Barking and Dagenham and Waltham Forest but this is only the start. I have heard that Southwark and others are also planning to bring more substantial licensing schemes into force.
The Standard suggests that rents will end up rising to help fund the fees charged to landlords for these schemes. No doubt this is the case. Ultimately, landlords operate as a business and they will inevitably seek to pass on their costs in the only way they can. Some tenants may consider the extra cost a price worth paying for a more regulated sector. I suspect that many will not.
This of course produces an incredibly disjointed picture. At one side the government both national and at the level of the London Mayor has asserted that rents are too high, especially in the capital. At the same time local authorities are engaging in polices that will have the effect of driving up rents. The Government could have elected to keep this under control but have previously abrogated their responsibility for controlling licensing schemes. Originally the Secretary of State had to approve all new licensing schemes. However, a single blanket permission was granted to all local authorities in England therefore removing that element of control. As schemes proliferate this may prove to have been unwise.
The creation of a licensing scheme only works if it can be operated effectively. That means granting licences promptly having given them due consideration, inspecting property to ensure it complies with licence conditions, and detecting and enforcing against those landlords who seek to avoid the scheme. Anecdotally, I see many cases where local authorities are not able to process licences effectively, even under the current level of mandatory licensing and many local authorities that are so overwhelmed that they do little more than process licences and inspect licensed properties. Detecting unlicensed HMOs is utterly outside their resources. If that is the case then more licensing does nothing to affect or control bad landlords. They will never licence their properties and will sit below the radar. In this scenario only landlords who seek to obey the law will be caught by the schemes and they will have further financial burdens loaded onto them. This leaves aside the weak understanding of the system and the law that many environmental health officers have, never mind many landlords, which only makes the whole system even worse.
There are other choices. Boston recently decided not to proceed with a wider HMO licensing scheme. It is open to local authorities to harden up their inspection and enforcement of property standards under the HHSRS. This system allows for any property to be inspected and for notices to be served requiring improvements. Licensing by contrast is actually directed at anti-social behaviour caused by poor management and it is this that must be shown for a scheme to be introduced. For most tenants it is the former that is their biggest concern. Licensing also charges all landlords for the provision of a licence, good and bad. This means that all landlords pay for enforcement against the worst. The HHSRS operated by way of a charge when enforcement action is taken. Therefore the polluter pays. For all sides a well structured and developed HHSRS scheme is preferable to an HMO licensing scheme if the objective is to improve standards.
Doubtless some local authorities will see licensing as their only or best option. In some cases they will be right. But it is not the answer to all problems and it should not be viewed as such.