When I attended an NLA meeting in Newham in November 2011 and watched the Mayor, Sir Robin Wales talk about his proposed licensing scheme, it became patently obvious to me that he was absolutely determined to make it happen. The room was packed with around 100 landlords who were totally opposed, but as a very experienced politician he just bounced back, even seemed to be enjoying himself. It was a carefully staged appearance, he had brought a team of advisers and councillors. When he asked if anyone agreed with the proposals, the small number of councillors present nodded their heads obediently. This is democracy in action, I thought.
Following a statutory consultation period, the council approved the first borough wide selective and additional licensing scheme in England using powers that were intended to license landlords in small neighbourhoods where all other options had been exhausted. In the consultation, 74% of residents supported borough wide licensing, 71% of landlords disagreed. Of course it’s so easy to stoke up bad feeling about landlords and Newham did this with tenuous evidence that most Anti Social Behaviour in the borough was connected to the private rented sector.
To their credit, Newham have set the license fee at £150 per property which is much lower than many local authorities. This will of course be paid by good landlords as soon as the scheme is set up. Doubts about staff capacity to administer the scheme remain with the estimated number of privately rented properties in the borough at 35,000 to 40,000. I believe they have 20 Environmental Health Officers and the government advises they can carry out 30 inspections each per annum, so inspecting all licensed properties should take around 65 years. Staff will probably prioritise enforcement of landlords that fail to register, all funded by those of us who do and are operating sound businesses.
The real problem in Newham is the so called ‘sheds with beds.’ Criminals build sheds and house vulnerable families, charging them £750 per month. If the shed costs £3,000 to build and install then it’s paid for within four months. If the property does not contravene planning rules, it will take 12 months for the local authority to bring a prosecution with a fine of maybe £2,000 and by then the ’property’ has raised £9,000 cash in rent. So to the criminals, it’s a no brainer. And unfortunately there are plenty of vulnerable people desperate for housing who will end up in these sheds. There is also evidence to suggest that the shedmakers are involved in people trafficking and have links with sham colleges, so providing ‘housing’ is all part of a packaged scheme . They take the individual’s passport for ‘safe keeping’ when they arrive in the UK, move them into a shed and now the tenant has no option but to stay under the radar. This problem has very little to do with the business of landlords and everything to do with criminality. The shedmakers choose their game as an alternative to drugs. That’s far too messy – they’d have to deal with gangs and if caught would be sent to prison. The worst they’ll get from shedletting is a £2,000 fine. They would however face a fine of £20,000 for not having a license, which of course many wouldn’t get even if they applied for it. So that’s the Newham strategy. License all landlords as a way of getting rid of the sheds. But sadly, by doing so, they tar us all with the same brush. I’m sure I speak for many landlords when I say I am appalled by the way that such criminals exploit vulnerable people, often providing terrible living conditions. I neither want to be associated with them, nor want to be held financially responsible for their removal. Boroughs should use existing enforcement action and force the criminals to repay all of the rent through proceeds of crime action.
The other key issue here is displacement. By the time the inspector appears, the vulnerable tenants will have disappeared. And where will they go? – to neighbouring boroughs of course. So then neighbouring boroughs will feel they have to set up borough wide licensing schemes. There’s already talk of a pilot selective licensing scheme in the boroughs of Barking & Dagenham and Waltham Forest. The result will be licensing contagion across the whole of East London where every landlord’s property will be licensed in order to get rid of the criminals. It’s a very convoluted way of dealing with criminal activity. Other areas like Brent and Slough have tackled the problem without borough wide licensing schemes. Many would also argue that Newham is trying to displace poorer families as part of a gentrification agenda.
For those of us with well managed properties in good condition and great tenants in Newham, let’s hope the scheme is light touch and unbureaucratic. I want to see the creation of a licensed landlords users group too so that we can have an ongoing dialogue with the borough. There are some good professionals in the housing department and I hope the implementation of the scheme for responsible landlords will be sensible.
