Published: 4 Dec 2017 by Vicky Pearlman

Late last week, we learnt that the Government has decided that Newham can renew its selective licensing scheme across almost all of the borough, for another five years.

Five months after the council first submitted its application, the Department for Communities and Local Government (DCLG) has given Newham permission to renew its scheme, except for the E20 postcode – the Queen Elizabeth Olympic Park site, not the fictional Albert Square.

While the delay means that there will be a gap of two to three months between the end of the existing scheme and the start of the new one, potentially allowing some landlords to slip through the net and putting some tenants at risk, the decision is a welcome one.

Licensing schemes can improve renting

Licensing schemes can help councils to understand their local private rented sector and the landlords in it, and help them to work with landlords to promote higher quality accommodation.

It makes little sense for councils to adopt a piecemeal approach when the problem of bad landlords is systemic. Meanwhile, larger whole-borough schemes can have considerable advantages for cash-strapped councils. It allows for a consistent approach, is easier for landlords and tenants to understand and gives bad landlords less opportunity to hide. It enables councils to concentrate resources (and enforcement action) on those landlords who do not have the right license, or who fail to have one at all.

Newham’s whole-borough approach

Licensing powers were originally introduced in the mid-2000s as a targeted tool to tackle anti-social behaviour, but Newham’s ambition was much bigger. We have highlighted the significance of Newham’s scheme in our blog before. The council adopted a borough-wide scheme to integrate licensing with their other environmental health powers and crack down on rogue landlords and poor conditions too.

It is an approach that has worked: in the past four years, Newham has prosecuted more than 1,225 bad landlords, more than any other London borough, and has issued more than 2,000 improvement notices to tackle poor conditions. Over £3.1m of unpaid council tax has been collected, and £280,000 of housing benefit fraud has been detected and stopped. And, since new enforcement powers, introduced by the Housing and Planning Act 2016, came into force in April 2017, 28 landlords in Newham have been banned from letting properties and 61 rent repayment orders have been issued (worth £380,000 of reclaimed benefit). Other proposals contained within the Act, including Banning Orders and a national register of rogue landlords and letting agents, are expected to come into force in April 2018.

But a government change in 2015 meant that Newham had to get the approval of the secretary of state in order to continue the scheme for another five years. Theirs has been an important test of the government’s appetite to approve borough-wide schemes, especially given the secretary of state’s refusal of a Redbridge scheme late in 2015.

Hope for other licensing schemes

DCLG has still to sanction the renewal of a wholly borough-wide scheme and their decision to exclude the Olympic Park avoids setting a precedent. But Newham’s success should encourage other local authorities to explore the benefits of larger licensing schemes to work with landlords to improve conditions across the private rented sector.