The Public Gallery: Barwell and Jones at odds over selective licensing


By - Thursday 2nd October, 2014

Tom Black looks at the politics around a council policy dividing the two contenders for Croydon’s only marginal parliamentary seat


Selective licensing: a beginners’ guide

Croydon Council, led by Labour as of May of this year, wants to do something about what it sees as the problem of unlicensed landlords in the borough. It has decided to introduce a ‘selective licensing’ scheme – landlords would be made to join a licensing scheme that would, among other things, ensure they were ‘fit and proper persons’, and reduce the numbers of unacceptably poor quality abodes in the private sector. While not de jure compulsory (the licensing for HMOs is compulsory, by contrast) it’s likely that it would be de facto required by any landlord looking to attract tenants.

The licensing scheme costs £1000 to sign up to, £200 a year for five years, paid up front as a lump sum. The battle lines suggested by this – landlords vs tenants, money into the council’s pocket etc – will make it no surprise that the local parties are already at war over Labour’s plan to introduce the scheme to Croydon.

A tale of two meetings

In accordance with the 2004 Housing Act, money raised by such schemes cannot be used for anything other than the implementation of the scheme itself. This, crucially, does not include enforcement of the scheme. So, theoretically, we could end up in a situation where the officials required to inspect homes and so on would have to be paid for out of council tax, while landlords pay £1000 apiece so that the individuals overseeing the scheme can be paid very high salaries.

Labour’s cabinet member for housing, Cllr Alison Butler, when under fire from a particularly heated audience member at Sarah Jones’s meeting on private rents, admitted there was a risk that this cost would be passed on to tenants, to the tune of a rise in rent of £200 a year. But Jones’s meeting was, as one would expect, geared towards renters themselves – the focus was on using the licensing scheme to ensure no-one ends up with the landlord from hell.

But ‘protecting tenants from vicious landlords’ is not something one can palatably sell to a body like the National Landlords’ Association (NLA), which held a meeting on the subject last week. Like the 70 other local authorities that have introduced the scheme, Croydon Labour has opted for a different argument, saying that a licensing scheme would make sure landlords kept up their obligations to reduce anti-social behaviour (ASB).

Unfortunately, any link between private renting and anti-social behaviour is far from an accepted fact. At the NLA meeting – which was led by a Conservative member and addressed by Gavin Barwell MP, making it into a counterpart of Sarah Jones’s Labour-led meeting – landlords arrived armed with the statistics, and the anti-’tenant tax’ (the Conservative nomenclature for selective licensing) argument appeared to win the day.

But Labour, and the council, were not present to make their case. Gavin Dick, chair of the meeting, did claim that Cllr Alison Butler had been invited but ignored the invite. Butler claimed she had replied, and provided email proof of the matter, but this came too late to assuage the atmosphere in the room that the council had no interest in talking to the people they were about to charge £1000. (An atmosphere that was a little too eagerly cultivated by some in the room, in my opinion.)

Seconds out, round one

Only a dozen or so people came to Labour’s meeting on rents (though I am told it was only advertised shortly before the day itself). The Conservative-led (if officially NLA-run) meeting was better attended, and arguments were made in greater detail. As an attendee at both meetings, I have to say I became increasingly aware of what look to be big holes in Croydon Labour’s proposal. If the consultation is carried out seriously, I think some level of change – if not a u-turn – is a distinct possibility. What this would do for Barwell and Jones’s campaigns would remain to be seen.

But if the Conservative meeting (so to speak) won the argument this time, the Labour meeting certainly raised a number of points we cannot ignore. The speakers on the panel described a Croydon in which many families pay ’35-40% of their income’ as rent. The audience members stressed that ‘if you can face eviction within two months for making a legitimate complaint to your landlord, that’s not allowing for a stable family life.’

Perhaps most worryingly in a town with a desperate shortage of council housing, we heard from Labour’s meeting that people on benefits are no longer welcome in the private sector – landlords know they can get a higher rate elsewhere.This is something that was backed up at the NLA meeting by landlords themselves.

Sarah Jones had the last word at her meeting. She took the opportunity to point out the elephant in the room. Selective licensing, the ‘tenant tax’, tenant agreements… it’s all a drop in the ocean compared to the fact we just don’t have enough housing, and our population is growing. She said future governments, Labour or Conservative, local and national, would have to “be brave, be bold, and be prepared to build in places people might not want us to.”

I’m going to give today’s last word to another Labour figure (bias, I know). Lord (then Mr) Prescott once made one of his famous ‘gaffes’ on this subject, many years ago now. But there were some of us who believed it wasn’t a mistake, and were disappointed when he clarified he meant no such thing.

“The green belt is a Labour achievement,” he said, “and we intend to build on it.”

But that’s a conversation for another time.

Tom Black

Tom Black

Tom is the Citizen's General Manager, and spent his whole life in Croydon until moving to Balham in 2017. He also writes plays that are occasionally performed and books that are occasionally enjoyed. He's been a Labour Party member since 2007, and in his spare time runs an online publishing house for alternate history books, Sea Lion Press. He is fluent in Danish, but speaks no useful languages. Views personal, not representative of editorial policy.

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  • http://idioplatform.com/ Jonny Rose

    For what it’s worth, the next Croydon Tech City event will be focussing on Croydon tech startup innovation in the property rental/investment space: http://www.eventbrite.co.uk/e/croydon-tech-city-october-matthews-yard-tickets-13247895813?aff=eorg

    If people are interested in curbing the ‘bad behaviour’ of private landlords – encouraging a system like Rental Raters (one of the startups on the night) would work well!

    • Anne Giles

      Good idea.

  • Mario Creatura

    It’s a great shame that Cllr Butler, the architect of the Tenant Tax policy in Croydon, couldn’t attend (or send a Deputy of any kind) to the National Landlord Association meeting. Almost 100 landlords and tenants working and living in Croydon attended and would have benefited from hearing her speak and answer their concerns.

    I find the reason Hannah Miller provides declining the invitation for her and Cllr Butler to attend the NLA meeting very confusing indeed. From the link Tom provides, Hannah says ‘as we are still formulating our plans we feel it is inappropriate for Councillor Butler and myself to speak at your proposed event’.

    Given that the NLA meeting met on 25th September, and Cllr Butler happily spoke at the Labour meeting the week previously on 18th September, her excuse seems a bit hollow and quite embarrassing in my opinion.

    Perhaps she was scared the huge holes in her policy would be exposed?

  • Stephen Giles

    One should never underestimate the role played by estate (letting) agents in the private rental merry-go-round, which earn letting, management, agreement renewal and service fees etc, all calculated as a % of the annual rents payable – so stand to gain if Selective Licensing costs are passed on to tenants!

  • Sean Creighton

    Of course private landlords are going to object to any attempts to further control their
    activities.

    What puzzles me is why the Tories have decided to be so vociferous in their defence. It was after all the Tory Council that set the wheels in motion for extending the licensing scheme. Their consultation document ‘Changes to additional licensing scheme’ (9 January 2014) and the accompanying undated ‘Report Recommending Additional Licensing in The London Borough of Croydon’ are still on the Council website at http://www.croydon.gov.uk/housing/privatehousing/hmo/pshalsv

    The report says that the existing mandatory licensing scheme for Houses in Multiple
    Occupation ‘has worked so well that rogue landlords have shifted their focus’ to
    non-licensable HMO’s which are usually two storey houses but sometimes are
    individual self-contained flats.’ It justifies having a scheme across the whole
    Borough to prevent rogue landlords and agents moving from a selective to a non
    licensing area.

    Labour’s consultation document is a considerable improvement on the Tory one which did not even mention what the licence fee would be. Landlords and managing agents are getting the first consultation opportunity up to 31 October, and then there will be a wider consultation including with tenants. Whatever final proposals emerge they will have to have Government approval.

  • David Callam

    Please could we leave the party political posturing to one side.
    The problem is a gross shortage of affordable housing in Croydon. And that results from the abject failure of poltitians from both major parties to address the situation over decades.
    Thatcher started it with her refusal to allow local authorities to replace right to buy properties with new public sector housing. She was determined to create a property owning democracy by denuding the market of any alternative.
    Major followed suit. Surprisingly, so did Blair and Brown. And then Cameron and Clegg. The result has been a vacuum of affordable property, which the private sector has been happy to fill – at a price.
    Neither party is prepared to grasp the nettle. We’ve had vague promises from both party conferences to provide ‘affordable housing’ by 2020. Boris Johnson defines affordable as 80 per cent of market value.Flats in the Island development at West Croydon are being sold in the Far East at prices starting at £205,000 for a one bedroom flat. That puts a so called affordable property in Croydon beyond the pocket of all but those with rich parents.
    Neither the past Conservative council, nor the present Labour one wants to address the problem. So they bicker about landlord registers instead.

  • Robert

    There are plenty of opportunities to improve housing and the housing market. The problem is that Selective Licensing of Landlords addresses none of them, and makes some worse.

    Increased demand for housing, particularly in London, has driven up prices for renters and buyers. This is a supply side problem, solution is to build more houses. (Note – “affordable” is often added in here. This means subsidised housing of one sort or another to some, but can easily be read to mean “affordable to me” but is not the same thing at all).

    Length of tenure in the private sector is an issue now that there are more families with school age children in this sector. Selective Licensing does nothing about that.

    The quality of the UK housing stock needs improvement. The private sector ranks lowest in the the surveys, not least because the houses in this sector are generally older than than the other sectors. Interestingly owner/occupiers rank lower than the public sector in this regard. For an explanation we need to look at definitions,.where there is a significant element of safety, for example working smoke alarms. These problems are already enshrined in law and the Council have a responsibility to enforce them. Sadly their record is poor in spite of having an enforcement department. Selective Licensing does not address this, and even makes things worse by taking an estimated 4 million pounds out to pay for council employees at ~£70,000 a pop.

    Lastly we come to anti-social behaviour, which is in fact the only justification allowed in law for extending such a scheme. This was intended to be used for limited areas where there was a clearly defined problem, but has been used by Newham and others, and now proposed by Croydon to cover an entire borough. It is a mis-use of the legislation and the government is consulting on closing this loophole. However selective licensing does not address this problem either. Landlords cannot be made responsible for their tenants, and indeed as soon as landlords might try to address their tenants behaviours there would be uproar from the same people now proposing the scheme. I also object to the assumption that the behaviour of private tenants is an issue over and above the general level of anti-social behaviour.

    Tom is quite correct to talk about the politics here. Sadly politics is too often a substantial part of the problem rather than part of the solution in the property sector.

    To end on a positive note, Croydon Tech City is on the case on this. Agents as middlemen is a huge opportunity for improvement. Absurd fees are being charged for very little yet in every other area I can think of these middlemen have been squeezed out or their costs reduced in the new economy. Why this has not yet happened in the property market baffles me.

  • RSDavies

    While no doubt the National Landlord’s Association is convinced it is composed of jolly decent people who properly manage their leased premises, it is an uncomfortable fact that many rented properties are occupied by people who demonstrate scant interest in the neighbourhoods or the impact upon their neighbours of their behaviour.
    It is not apparent that landlords in the East Croydon area manage their properties at all. The first many people know of a new tenancy is the appearance of discarded furniture at the front and in alley ways. Next will be the noise. If you live next door to this what do you do? If there’s no register of landlords how does a resident in this environment contact the landlord to ask them to clean up the mess or at least enforce their own tenancy agreement? The NLA could organise a national register and make it accessible to the public. It could get its members to fix a small placard on their properties showing that they belong to the NLA and are committed to the highest standards.
    However expecting the NLA to support any form of registration is like expecting US gun manufacturers to support gun control.
    Possibly the answer is create a simple process in law by which residents in area or the local authority can take action to constrain the tenants from repeating the antisocial behaviour, the landlord from re-letting and obtain compensation from the landlord.
    Ultimately the answer is to enable councils to build large numbers of cheap homes quickly reduce demand in the private sector to obtain a better balance between demand and supply, and then landlords might start to care about keeping good well behaved tenants instead of screwing them for more and more rent.