Opinion

Spotlight on Haringey Council’s Additional Licensing Scheme

Tuesday, April 11th, 2023 - By Samantha Watkin, Senior Policy Officer, NRLA

As part of the National Residential Landlord Association’s (NRLA) local government campaigning, a series of audits are being carried out on active discretionary licensing schemes to ensure complete transparency and accountability. The aim of these audits is to assess whether discretionary licensing is an appropriate action to take compared with other enforcement options.

The London Borough of Haringey is located in north London covering a total area of 11 square miles. Since 27 May 2019, the council have operated a borough-wide additional licensing scheme, due to end on 26 May 2024, which covers just over 17,750 HMOs.

This scheme applies to all HMOs in the borough. As a result, it covers all properties shared by three or more persons who are not all related and share facilities such as the kitchen and bathroom. It also covers ‘section 257 HMOs’, which are properties that have been converted into flats that don’t comply with the 1991 building regulations or later versions.

With selective licensing also recently introduced in Haringey, the NRLA has prepared a brief on the current additional licensing scheme using the information provided through FOI requests submitted in the latter half of 2021 and the first quarter of 2022.

Inspections

Haringey council prefaced the following figures in this analysis, stating that the scheme was hit with covid lockdowns and restrictions beginning in March 2020 and the best part of 2021, just under a year into the scheme becoming live. The council stated they were not undertaking proactive inspections during the covid restriction periods and had a reduced workforce. It could not offer service provision as many staff members were agency staff, so they were let go. Permanent staff were affected by covid illness.

The additional licensing scheme continued to identify unlicensed HMOs and issue licences through robust desktop analysis, which allowed them to create a red, amber, and green traffic light system to indicate which properties were at higher risk in terms of compliance. These have required specific schedules of works that were issued at the time of the licence and a time frame given for compliance. This, the council explained, is how they prioritised their inspection programme.

The NRLA asked the council, therefore, to break down per year (1 April to 31 March) the number of property inspections they have undertaken of additional licensed properties since the scheme first went live (May 2019 to March 2022), which is displayed below:
London Borough of Haringey private rented sector inspections

Understandably inspection rates dropped during the height of the covid pandemic when mandatory lockdowns were in place, and local authorities were advised to prioritise emergency and urgent enforcement work only. With the restrictions lifted, inspections have picked up again.

Enforcement work within additional licensed properties

The Housing Health and Safety Rating System (HHSRS) is a scoring system that is used by local authorities to assess the effect of certain hazards on the health, safety and well-being of the tenants residing on the property. This system allows a council to take action to remedy any hazards, ensuring the property is safe to live in. Twenty-nine hazards can be scored, including excess cold, dampness, mould, overcrowding, electrical hazards and structural failings. These hazards are risk-based assessed and come under the rating of either category 1 (serious) or category 2 (less serious).

The NRLA requested a breakdown of the number of licensed properties with category 1 or 2 hazards present on inspection. Between May 2019 and March 2022, Haringey identified 42 properties out of 776 properties with a category 1 hazard present. The council did not record whether any category 2 hazards were present.

This would suggest Haringey is inspecting properties but finding significantly less category 1 hazards than you would expect if the properties were substandard which the council used as justification for introducing the designation.

Haringey Council, as of 2022, employ 2 FTE Environmental Health Officers whose main job is to enforce standards in the private rented sector.

General Enforcement in the Borough

The NRLA, through our research, have established primary enforcement data for councils regarding their duties in the private rented sector (PRS). Local authorities have been provided with a wide range of powers they can use to raise standards in a property. This system allows local authorities to inspect a property to identify hazards and then act against the landlord where hazards are found. Failure to comply could lead to criminal prosecutions or civil penalties.

For Haringey Council, we established the following. Between 2018 to 2021:

  • 67 HHSRS inspections were conducted
  • 38 Improvement Notices issued (mixture of category one and category two hazards)
  • Zero Hazard Awareness Notices issued
  • Zero Overcrowding Notices issued
  • 24 Prohibition Orders served
  • 973 complaints received by tenants related to private housing matters.

Civil Penalty Use and Criminal Prosecution

Haringey confirmed that since the scheme has been live up until the end of February 2022, they have taken out no criminal prosecutions against any licence holder. Regarding issuing civil penalties: 4 Notices of Intention for failure to licence are in progress, and two civil penalties issued for the same offence have been upheld.

In other general enforcement across the borough, in a separate FOI response, the council confirmed that in three years (2018 to 2021), they had commenced one criminal prosecution on an enforcement notice against a private landlord.

The council, although active in some enforcement work, the number of PRS complaints versus the follow-up enforcement was low.

Processing Times

The NRLA asked the council how long, on average, it takes for an additional licensing application to be decided from the point that the council receives the application to a decision being made. Haringey stated that in the more simplistic cases where all the required documentation has been submitted and is up to date, it takes one working day. It takes three working days if the property requires a visit and further checks.

During this licensing process, compliance checks are based on desktop only, including fire safety, floor plans and amenity checks. Ongoing compliance is then assumed to be maintained throughout the lifetime of the licence, and the council conducts a physical inspection of the property subject to the traffic light system they have implemented. This suggests that unless flagged by the council, a licenced property wouldn’t usually receive a physical inspection during the lifetime of a licence.

Licence fees

When it comes to introducing discretionary licensing, often as part of the process leading up to formal consultation, the council should provide some basis for the level of the fee being proposed, e.g., an estimate of the cost of the scheme divided by the number of properties estimated to be licensed. This proposed fee should be reasonable and not excessive, ensuring that no profit is made from the licence fee revenue and that activity is cost-neutral.

The NRLA requested the total amount of licence fee income collected from this additional licensing scheme since the scheme has been in force (May 2019) to the beginning of March 2022. Haringey stated that they had received a total of £2,554,322, which does not include all Part B (enforcement) payments for those licences that have not been granted. If a licence is refused, the perspective licence holder only pays Part A as it is not refundable. Since the scheme has been in force, the council charges £1,100 for an additional licence, split into two payments: £500 payable on application and £600 once the licence is issued. Licence holders who hold London Landlord Accreditation Scheme (LLAS) or hold an accreditation certificate issued by a professional landlord organisation are entitled to a £50 discount on licence fees.

The council also grants shorter licences (less than five years) in certain circumstances. For example, if there is a history of complaints about the property or a failure to comply with HMO management regulations. In cases like this, the council may set the licence to last for just one year, compelling the licence holder to reapply each year to ensure regular compliance.

Formula to calculate the licence fee

The formula used to calculate these licence fees was based on the number of predicted HMOs in the scheme against the number of those properties the council thought would licence within the five-year licence period. They then used a calculator to establish the cost of administering the applications and compliance checks regarding staffing resources and the operations costs involved. Haringey also stated they engaged with benchmarking costs with other local authorities who also have discretionary licensing schemes in place.

For further information on the council’s licence fee structure, a full breakdown of the fees can be found on their website: https://www.haringey.gov.uk/housing/landlords/multiple-occupants/should-my-property-have-hmo-licence

Number of additional licences dealt with and processed

When requested, the council confirmed that they have received a total of 3,379 licence applications since the scheme has been in force, broken down year by year:

2019/2020: 1,487
2020/2021: 968
2021/March 2022: 924

The council prefaced these figures by stating that not all applications proceeded to require a licence. 2,905 licences have been issued from the start of the scheme until March 2022, which includes section 257 HMO properties. Using the council’s estimates, this works out to 16% of all HMOs in the borough being licenced in that period.

The NRLA also requested the total number of unlicensed additional properties Haringey have proactively identified during the lifetime of the scheme so far, with the answer being: ‚ÄúOut of communications sent to landlords identified through desktop intelligence and door knocking undertaken during the 2020 lockdown and parts of 2021, the answer is 1,489. Some of these include applications started but not completed and some which were told they didn’t require a licence due to the wrong information provided‚Äù.

Background of the Scheme

The council formally consulted on plans for a borough-wide scheme in 2017 and early 2018, along with a selective licensing scheme that covered 29 wards in the borough. In this proposal, Haringey wanted the introduction of selective and additional licensing to enable a significant change in how anti-social behaviour and poor management associated with the private rented sector are tackled.

The consultation proposals set out that through licensing, the council would know who is responsible for managing properties that are rented out and who is, in the first instance, responsible for dealing with problems associated with the dwelling. They touted the benefits for a private landlord being better management and tenancy agreements enabling the landlord to have better control over the property, advice and guidance available on all aspects of private renting, and a landlord being able to promote their licensed status and find it easier to attract tenants.

Additional licensing was to be used alongside the council’s 2017 to 2022 Housing Strategy to achieve a step change in the number of new homes being built, improve support and help to prevent homelessness, drive up the quality of housing for all residents and ensure that housing delivers wide community benefits.

The full consultation document can be found here for further reading: https://www.haringey.gov.uk/housing/housing-consultations/historic-housing-consultations/private-sector-property-licensing-consultation

Looking Ahead

On 9 March 2022, the council approved plans to introduce a large-scale selective licensing covering all privately rented properties in 12 wards of the borough. This scheme was approved by the Secretary of State and came into force on 17th November 2022.

The covid pandemic had an understandable impact on the council’s ability to inspect licensed properties physically, with government guidance advising only emergency and urgent inspection and repair work be undertaken to minimise the risk of covid-19 exposure for all parties concerned in the process.

Before the lockdowns, the council had engaged in some enforcement work within the additional licensing scheme. Still, it will need to become far more proactive to meet its objectives within the 2017-2022 Housing Strategy and justify the scheme’s introduction in the first instance. Only 5% of the total estimated HMOs in the borough had been inspected in three years of the borough-wide scheme.

Haringey has since pursued more discretionary licensing in the form of a large-scale selective licensing scheme that they consulted on and implemented at the end of last year. It creates more red tape in the form of discretionary licensing where resources could be spent instead of using existing enforcement powers more fully on cracking down on criminal landlords who let out substandard property and put tenant lives at risk.

If you wish to contact the council about the current additional licensing scheme, recently implemented selective licensing designation or have any questions regarding the council’s general enforcement activities, their contact details are email propertylicensing@haringey.gov.uk or visit the council’s website.

The author of this blog, Samantha Watkin, is a Senior Policy Officer at the NRLA.

Please note that the views and opinions expressed in these blogs are those of the author and do not necessarily represent the views of London Property Licensing. These blogs are designed to stimulate discussion and debate within the property industry. This article does not represent legal advice and should not be treated as such.

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