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4 Nov 2009 : Column 305WH—continued
There are two possible options for tackling the problem: abandon the use of the private rented sector for public housing purposes, or proactively ensure its expansion so that it can effectively meet demand. The former requires a substantial increase in the social housing sector to take up the slack. That may be the ambition of the Government’s housing policy, but it is, by definition, a long-term approach rather than an overnight solution. We must look at measures over the short and medium term, and possibly consider growing the private sector in a more systematic way. For example, we could consider institutional investment, possibly by housing associations.
Any growth should be on the basis of a licensing scheme that matches the needs of the tenant and the neighbourhood in a way that is not happening now. Leaving the matter to private landlords, many of whom are absent, in it for the capital return in property and amateurish in their approach, is a recipe for chaos. Those people should not be able to determine the country’s housing policy. Will my hon. Friend the Minister let me know his views on the introduction of a general licensing scheme for private landlords? Can he tell me what his Department is doing to monitor selective licensing schemes, and what plans there are to extend them?
In Chilton, where there have been problems and where there is no selective licensing scheme, Ben Hewitt, a local resident who was born in Arthur street, has done a sterling job of pulling the community together to work with the police, councillors and other agencies. The Dean Bank residents association is doing the same thing, and the Trimdon Station local residents have just created a neighbourhood watch scheme. The residents in Chilton and Trimdon Station want the selective licensing scheme to be extended to their area, while the Dean Bank residents want their existing scheme to work.
The communities in my constituency are strong, and they want to live peaceful lives. I am disappointed when I see private landlords—some are good but the majority are absentee—buying up communities for profit without due respect to the local people. That is why I wanted to raise the issue today. I should like the Government to make it a statutory duty on local authorities to liaise and engage with private landlords and monitor them. I know that there is legislation in place to help local authorities, and Durham county council is doing all that it can, but there is no statutory requirement on it to do things systematically, which means that resources are limited. If such a duty was imposed, it would go some way to redressing the problems in my constituency, which, I am sure, are not particular to Sedgefield.
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The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Ian Austin): Let me start by apologising for coming in late and missing the start of the speech of my hon. Friend the Member for Sedgefield (Phil Wilson). I congratulate him not just on obtaining this important debate but on all the work that he has done on tackling antisocial behaviour and bad landlords in his constituency. As he said, tackling issues such as antisocial behaviour is one of the Government’s top priorities, and I recognise that problems of vandalism, crime and general disorder have a huge impact on the quality of life of ordinary, decent people.
We have provided a framework of powers and approaches for the police and other agencies so that they can tackle antisocial behaviour swiftly and effectively. As my hon. Friend said, a minority of bad landlords still make their tenants’ lives a misery and tarnish the reputation of the whole sector. We want to identify those people and get them out of the market if they are unwilling to improve their behaviour. In recognition of that, the Housing Act 2004 introduced a variety of measures to tackle poor management practices in the private rented sector.
The 2004 Act gives local authorities the discretionary power, subject to Government approval, to designate certain neighbourhoods as selective licensing areas. They may use such powers in areas that suffer, or are likely to suffer, from low housing demand, or from significant and persistent antisocial behaviour.
To implement such a power, local authorities must show how a selective licensing scheme fits in with their overall, strategic, authority-wide approach to dealing with problems in the private rented sector. They need to show, for example, how the scheme will fit in with existing policies on homelessness, empty homes, regeneration and antisocial behaviour. They must also conduct a full consultation with local residents, including tenants, landlords, owner-occupiers and businesses in and around the proposed designation.
Selective licensing will ensure that all landlords and managers of privately rented properties in a designated neighbourhood are identified to the local authority as “fit and proper” persons, and that satisfactory management standards are in place in the property. Landlords will also have to take appropriate steps to deal with their tenants’ antisocial behaviour as a condition of a licence, and they will be required to demand references from prospective tenants. Breach of a licence condition is an offence that is subject to a fine of up to £5,000. Letting or managing a property without a licence could result in a maximum fine of £20,000.
My hon. Friend knows that the Department for Communities and Local Government has given approval to Sedgefield borough council and Easington district council to operate selective licensing schemes in their areas. Both schemes are now administered by the newly formed Durham county council. Indeed, the selective licensing scheme in the Dean Bank and Chilton West wards came into force on 7 February 2008 and, to date, 212 licences have been issued and 17 prosecutions are pending. The council has shown that its schemes fit in with the overall strategic approach on tackling problems in the local private rented sector. It is also seeing success in the level of engagement from local landlords operating in its area. Such success demonstrates what an authority committed to tackling problems with its private rented sector can achieve.
As I have mentioned, to establish selective licensing schemes in their area, local authorities are currently required to apply to the Department for approval. When the legislation was introduced, it was made clear that the ultimate aim was a general consent allowing local authorities to establish schemes without seeking approval. Such a consent would not absolve a local authority of the need to comply with the requirements that I have described.
The legislation is still relatively new, and before a general consent is issued, careful consideration is needed of how it would work in practice. I should like to stress, however, that the role of the Department is to facilitate the approval process, rather than to refuse applications for selective licensing. Officials work with local authorities to help develop the most appropriate solutions for the problems that they have identified.
When a local authority presents a scheme that has been properly developed and meets the legislative criteria, our Department aims to turn around approval within 30 working days. However, it is right that we should challenge schemes that have not been properly thought through and that do not meet the legislative criteria.
On approval, licensing schemes last a maximum of five years, and come into force three months from the date of approval. There is no reason why licensing schemes cannot continue and, in certain circumstances, be extended after their end date, if the problems that the schemes are designed to address still manifest themselves.
I expect local authorities to take a robust approach to the tools and powers available to them to tackle problems in the private rented sector. However, I am keen to ensure that local authorities see licensing as a way of developing a partnership with good landlords. If selective licensing designations are to help address the complex issues facing wards such as Dean Bank and Chilton West, it is vital that there be good working relationships between the local authority and local landlords.
The criteria for establishing selective licensing schemes reflect the experience of private rented sector markets at the time when the legislation was implemented. However, I recognise that there is a need for further consideration of the criteria for selective licensing to ensure greater flexibility for local areas in dealing with problem privately rented properties.
My hon. Friend knows that my Department commissioned the independent review, “The Private Rented Sector: its contribution and potential”, from Julie Rugg and David Rhodes of the centre for housing policy at the university of York. It was published in October 2008. Its recommendations included a national register for all private landlords and a reconsideration of the criteria used for selective licensing. It proposed, for example, that landlords include their registration number on all tenancy agreements, and that it be possible to remove them from the register if they fail to comply with the required standards. A register would also enable us to identify bad landlords and get them out of the market if they are unwilling to improve their behaviour.
My hon. Friend asked what the position would be in relation to private-sector letting and managing agents. Letting and managing agents do not currently need professional credentials, but the review recommends full regulation for private-sector letting agents. At the moment, because professional credentials are not required, neither tenants nor landlords have any realistic redress when things go wrong. To tackle that problem, the Government propose the creation of an independent regulator for all letting and managing agents.
The Government published our response to the review for consultation in May and have been encouraged by the positive reaction to the proposals, having received more than 250 responses. We are now considering those responses and will publish the results of the consultation later this month.
In conclusion, selective licensing is an important tool available to local authorities to help tackle the worst problems in the private rented sector. Selective licensing will continue to make a valuable contribution to raising management standards in the private rented sector within the designated wards. Through successful implementation of the scheme, the council is sending a clear message that poor management standards will not be tolerated in the region.
I congratulate my hon. Friend on all the work that he has done in his constituency with the local authority to
tackle the problems created by bad landlords. I would be grateful if he would agree to meet me and take me through the figures that he read out, so that we can consider the problems in his constituency in more detail.
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