Oxford City Council sets out wide-ranging proposals to support vulnerable tenants, improve safety standards, crack down on rogue landlords and upgrade the energy efficiency of private rented houses.
Taken together, the proposals would be the largest change to rules around private rented accommodation in Oxford for a decade – since the City Council introduced powers to licence every house in multiple occupancy (HMO) in the city in 2010.
The proposals include:
- Expanding the current licensing scheme for HMO landlords so that it covers all 20,000 private rented homes in Oxford
- Developing a new intelligence-led enforcement model using an algorithm to identify properties in the private rented sector that are unlicensed
- Taking over powers to fine rogue landlords whose properties do not meet the legal minimum energy efficiency standard
- Employing a new lawyer to take on rogue landlords who attempt to dodge fines for failing to meet the minimum safety and energy efficiency standards
The City Council secured £71,000 from the Ministry of Housing, Communities & Local Government last week (3/1) to test the new algorithm and fund the new lawyer, while it received the new energy efficiency powers last month (December).
The City Council will develop the detailed proposals for extending the landlords licensing scheme over the coming months, with the aim carrying out a public consultation in the summer.
The City Council will need to secure the Government’s approval to be able to extend the landlords licensing scheme. The hope is to secure the approval and introduce the new powers in late 2020 or early 2021.
Current HMO licensing scheme
Currently, all landlords of HMOs in Oxford are required to get a licence from the City Council to operate. HMOs are defined as homes rented out to three or more people who are not from the same family and who share facilities – for example the kitchen.
The City Council licence ensures:
- The HMO meets the Government’s minimum safety standards for homes, including the amount of space per person, the heating of the property, fire and electrical safety, and that the property has suitable kitchen, toilet and washing facilities for all the tenants
- The landlord, or their property manager, is a ‘fit and proper’ person – i.e. that they have not committed any housing-related offences or crimes involving fraud, violence, drugs and certain sexual offences
- The landlord, or their property manager, complies with the City Council’s waste collection scheme for the storage and disposal of household waste at the HMO
Oxford City Council introduced the powers in 2010 – becoming the first local authority in England to require every HMO within its boundaries to be licenced.
Since then, the City Council has been proactively inspecting HMOs in Oxford to ensure that landlords and agents are meeting the safety standards. Every year the City Council carries out about 700 inspections of HMO properties in Oxford.
Between 2011 and 2016, the City Council undertook 82 prosecutions and issued 47 formal cautions against rogue landlords and agents of HMOs. In 2017 the Government gave local authorities the ability to issue financial penalties to rogue landlords and agents, and since then the City Council has issued 57 fines for offences relating to HMOs, including renting unlicensed, cramped and unsafe properties.
Emerging issues in private rented sector
There is an emerging trend in Oxford of rogue landlords, or their agents, deliberately dodging the City Council’s HMO licence and continuing to rent out dangerous or sub-standard properties to vulnerable tenants.
Some rogue landlords and agents who have been prosecuted or declared not ‘fit and proper’ to hold an HMO licence have started renting their properties to single families, or deliberately reducing the number of people living in the property to below the HMO threshold.
There have also been cases in Oxford where landlords have rented to families or couples but deliberately set the rents at HMO levels so that tenants have to sub-let the property to pay the bills. This is known as a rent-to-rent scam.
A 2014 survey that looked at the condition of Oxford’s housing found that 13% of private rented homes are in a state of disrepair – almost double the national average of 6.8%. This is partly because of the age of the housing stock in Oxford – 50% of Oxford’s houses were built before 1944, compared to a national average of 38%.
Similarly, proactive inspections carried out by the City Council on privately rented homes that are not HMOs have suggested that many are unsafe. In 2017/18 the City Council carried out 262 inspections on non-HMO privately rented properties, and issued 92 formal notices (35%) after unsafe conditions were found. Common safety issues encountered where improvement notices have been served include dangerous electrical and gas installations, inadequate or no fire precautions, lack of or inefficient heating, and lack of thermal efficiency to the external elements to structures. In 2018/19, 243 inspections were carried out and 77 formal notices were issued (32%).
The City Council has tried a range of options in recent years, including proactive inspections and landlord accreditation, to raise the standards across all privately rented accommodation in Oxford. But – likely due to the scale of the private rented sector in the city – the issues have remained.
The 2011 Census found that 28% of homes in Oxford are privately rented and, according to the Office for National Statistics, this had grown to 33% by 2017. Oxford now has the seventh highest level of privately rented homes in the UK.
Expanding the HMO licensing scheme
The new proposals would see the existing licensing powers expanded to cover all privately rented homes in Oxford. This means all landlords who want to rent a property in Oxford would have to apply to the City Council for a licence to do so.
As with HMOs, landlords will have to complete an application and provide the City Council with evidence that the property they rent out has the legally-required gas, electrical and fire safety certificates. Providing landlords have all the paperwork, the application will take about half an hour to complete.
There will be a fee to process the application. Although the exact figure has not yet been decided, it is expected to be in line with the national average of approximately £600 for a five-year licence.
The City Council will develop these initial proposals over the coming months. The public will be able to have their say on the detailed draft proposals during a 10-week consultation that is expected to take place this summer.
If Oxford residents are in favour of the proposals, the City Council will submit a final version to the Government for approval in the late autumn. If the Government approves the proposals, the new licence could be introduced at the end of 2020 or in 2021.
The Government allows local authorities to introduce schemes to licence all private sector landlords – known as ‘Selective Licensing’ – if 20% of homes in the area are private rented.
There are currently three local authorities in England that have already introduced licensing covering all private rented accommodation in their areas – the London Boroughs of Barking and Dagenham, Croydon and Waltham Forest.
Cracking down on unlicensed homes
Although the Government estimates that there are about 20,000 private rented homes in Oxford, an exact figure is not known – and it is not known precisely where all these homes are. If introduced, the expanded licensing regime would create a map of all private rented homes in Oxford for the first time.
However, the City Council is also developing an algorithm that will calculate which properties in Oxford are most likely to be private rented accommodation. The algorithm will layer existing data – such as how regularly the person paying council tax at the property changes – to determine the probability.
The City Council plans to use part of the £71,000 it secured from the Government last week to employ two new officers to test the algorithm. The two officers will knock on 1,000 properties in Oxford over a three-month period to find out whether or not the algorithm has correctly predicted that they are privately rented homes – and then, if needed, tweak the algorithm to improve its accuracy.
The plan later this year is to layer the two data sets – the map of all licenced privately rented homes in Oxford and the map showing the probability that each home is private rented – to determine the likelihood that a privately rented home is unlicensed. The City Council’s existing proactive inspections will then be focussed on the properties most likely to be unlicensed privately rented homes.
The hope, later this year, is to share the algorithm with other councils across the UK to help crack down on rogue landlords and raise standards.
Tackling the climate emergency
Since April 2018 the Government has legally required landlords across the UK to have an Energy Performance Certificate (EPC) rating of E or above for their privately rented homes.
Homes with an EPC rating of F or G leak heat to such an extent that the Government has deemed them unsafe to live in. A private tenant whose home is upgraded from an EPC rating of F to E will also save, on average, £700 a year in energy costs.
A City Council study, released last year, that looked at the greenhouse gas emissions generated by different sectors in Oxford – i.e. residential, industrial, agricultural and transportation – found that residential buildings are the largest contributor (29% of Oxford’s total emissions).
Currently, the City Council has the power to stop landlords renting out properties with an EPC rating of F or G, but – despite the City Council being the housing authority – it is Oxfordshire County Council’s Trading Standards that has the power to fine landlords who do not get an EPC for their homes.
At the moment only 12,079 of Oxford’s roughly 20,000 privately rented homes have EPCs – meaning the landlords of about 40% of the city’s privately rented homes are breaking the law.
In November 2019, the County Council Cabinet agreed to delegate the EPC enforcement powers to the City Council. In December, the City Council’s Cabinet accepted the transfer of the powers.
The City Council now has the power to issue fines of £200 for landlords who do not have an EPC on a private rented home in Oxford. It takes about five minutes, and costs between £30 and £50, for a landlord to apply for an EPC on the internet for their privately rented property.
New rogue landlord lawyer
Part of the £71,000 that the City Council secured from the Government will be used to recruit a new lawyer to tackle rogue landlords who try to dodge paying fines for operating unlicensed properties or properties that fail to meet safety or energy efficiency standards.
Since 2017, the City Council has issued 57 financial penalties, totalling £356,411, to rogue landlords and agents in Oxford. Although the City Council has successfully retrieved 61% of these debts, 39% of rogue landlords and agents are currently refusing to pay. This is a common issue amongst local authorities across the UK.
The main role of the new solicitor, who will be employed for three months, will be to develop a new toolkit – effectively a step-by-step guide of how to retrieve money from fine-dodging rogue landlords and agents – so that enforcement officers in the City Council can follow it and take action against the rogue landlords and agents.
The hope, again, is to share the toolkit with other councils across the UK to help crack down on rogue landlords and raise standards.
History of cracking down on rogue landlords
The City Council has been working towards these new proposals for several years.
In July 2019 the City Council secured £150,000 from the Government, which funded the initial development of the algorithm, the creation of a toolkit for how district and city councils can take over EPC powers from county councils, and piloting the enforcement of the new EPC powers. The City Council plans to share the EPC toolkit with other local authorities across the UK so that they can mirror the process.
Meanwhile, in April 2019 City Council became only the third local authority in the country to add a rogue landlord to the national database, after a local landlord received two financial penalties for breaching the City Council’s HMO regulations. Inspectors found a defective fire alarm system, inadequate fire doors, and a blocked fire escape among a range of breaches in the landlord’s properties.
Last year the City Council also backed Government proposals to expand the national database to provide public access for the first time and lower the threshold at which rogue landlords and agents can be added.
The City Council has also been proactively inspected ‘beds in sheds’ – outbuildings that have been constructed without planning permission or building regulations approval and used for human habitation – to protect vulnerable tenants. This work saw the City Council use a heat map of Oxford and proactive inspections – alongside reports from members of the public – to find suspected beds in sheds. More than 1,000 suspected beds in sheds have been inspected since January 2018, resulting in 21 beds in sheds being shut down and 31 enforcement notices being served.
Over the last five years, the City Council has successfully secured almost £700,000 of Government funding to tackle rogue landlords and agents in Oxford.
“All we are proposing is to level the playing field so that every landlord in Oxford should have to be a fit and proper person and that their properties have the required certificates to show that they are safe for tenants.
“Obviously in an ideal world we wouldn’t need to ask for this information, but we have found countless examples across Oxford of homes where even these most basic of standards have not been met and vulnerable tenants have been left in illegal and dangerous conditions.
“Landlords may say that we are tarring everyone with the same brush, but our evidence shows that rogue landlords are not a small minority in Oxford – currently the landlords that own 40% of privately rented properties in Oxford are breaking the law by not having an EPC certificate.
“A decade ago we introduced ground-breaking rules around HMOs, and I hope Oxford residents will agree that this has helped improve the condition of homes and been good for communities across the city.
“Now we are simply aiming to expand this successful model to all privately rented homes.”
Councillor Linda Smith, Deputy Leader of Oxford City Council