URL: https://democracy.croydon.gov.uk/ieDecisionDetails.aspx?ID=2576

Decision Maker: Corporate Director of Housing

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: At Cabinet on the 12th February 2025, the Executive Mayor and Cabinet RESOLVED to endorse that the Council consider a selective licensing scheme in the private rented sector and delegated authority to evaluate a potential scheme and, if appropriate, propose and consult on such a scheme The scheme is one of the options available to tackle poor conditions in the private rented sector. Authority is also sought, to proceed to public consultation on the proposal to designate a borough-wide Additional Housing of Multiple Occupation (HMO) scheme for privately rented properties in Croydon.  The aim of the designations is to improve property standards and property management in the private rented sector (PRS).

Content: At Cabinet on the 12th February 2025, the Executive Mayor and Cabinet RESOLVED to endorse that the Council consider a selective licensing scheme in the private rented sector and delegated authority to evaluate a potential scheme and, if appropriate, propose and consult on such a scheme The scheme is one of the options available to tackle poor conditions in the private rented sector. Authority is also sought, to proceed to public consultation on the proposal to designate a borough-wide Additional Housing of Multiple Occupation (HMO) scheme for privately rented properties in Croydon.  The aim of the designations is to improve property standards and property management in the private rented sector (PRS). RESOLVED: 1.     To approve the commencement of consultation which will include residents, partners, the Mayor of London, and those potentially affected by the proposals to introduce a selective licensing scheme and an additional HMO scheme for privately rented properties. 2.     To agree that the consultation on the proposed licensing schemes will run for 12 weeks commencing in the middle of October 2025.   At Cabinet on the 12th February 2025, the Executive Mayor presented a paper outlining the Council’s intention to consider introducing a selective licensing scheme to address poor housing conditions in the PRS in Croydon.  Following a review of the data and in line with the statutory requirements, the Council is determined to take action to tackle poor conditions and poor management that has been identified in privately rented property.  This report outlines the conclusions and makes recommendations to proceed to consult on a discretionary housing licensing scheme/s. Part of the Mayors Business Plan 2022-2026 supports the introduction of a selective licensing scheme to improve housing standards in the PRS and aligns with Outcome 4 “Cleaner, safer and healthier”, which includes improving housing standards and tackling anti-social behaviour. In the last 18 months the Council’s housing strategy has been published.  The Housing Strategy 2024 to 2029 sets our plan to improve housing services, provide safe and affordable homes and meet the needs of our residents.  The strategy was created by working closely with Croydon residents and partners, where their views were at the heart of the strategy.  The strategy makes a commitment to improve housing services and meeting the needs of people across the borough, including in the PRS.  To respond to this, the Council will use a data driven approach and make the best use of its powers to improve the Borough’s PRS. This includes a commitment to consult on options for the introduction of a landlord licensing scheme on either a boroughwide basis or in targeted areas of the borough. Furthermore the Homelessness and Rough Sleeping Strategy was agreed in July 2024.  This strategy sets out the Council’s intention to implement a preventative approach to homelessness as required by the Homelessness Reduction Act 2017.  In 2021- 22, 284 evictions took place in Croydon under Section 21 proceedings Before proposing a designation and embarking on a consultation, the Council must identify the problems affecting the area to which the designation will apply and provide evidence to demonstrate the existence of the problems. The evidence base is covered in Section 5 of this report and identifies the presence of poor property conditions and management in the boroughs private rented sector.  The issues found meet the licensing condition of poor property condition and poor property management.  The proposed scheme objectives are to:        i.          Improve housing conditions in the PRS by eliminating poor property standards;       ii.          Improve management standards in PRS properties;     iii.          Increase awareness for tenants of the minimum standards to be expected in rented accommodation and what their other rights are when renting in the PRS. The Council is unable to achieve these objectives without the introduction of a comprehensive discretionary licensing scheme/s.  The case for proposing the introduction of a selective licensing designation has also considered whether there are any other courses of action available that would achieve the same objective or objectives as the proposed scheme, without the need for the designation(s) to be made.  These were outlined in paragraph 6 of the Statement of Intent and also section 6 of this report.  Part 3 of the Housing Act 2004 (the Act) sets out the framework for licensing private rented properties in a local housing authority area. Under section 80(1) of the Act a local housing authority can designate the whole or any part or parts of its area as subject to selective licensing. Where a selective licensing designation is made, all properties in the private rented sector (exemptions apply) which are let or occupied under a licence, are required to be licensed by the local housing authority. Part 2 of the Act sets out the framework for the discretionary licensing of houses of multiple occupation in a local housing authority area. Under section 56(1) of the Act a local housing authority can designate the whole or any part or parts of its area as subject to additional HMO licensing. Where an additional HMO licensing designation is made, all HMOs in the private rented sector (subject to exemptions and meeting the description of the HMO subject to AHMOL) which are let or occupied under a licence, are required to be licensed by the local housing authority. Every Council in England that designates an area of their district or an area in their district as subject to selective licensing under section 80(1) or an additional HMO licensing scheme under section 56(1) of the Act has the Secretary of State’s general approval of that designation for the purposes of sections 82(1)(b) and 56(1)(b) of the Act ,so long as they consult for not less than 10 weeks.  With approval the consultation is proposed to commence in mid-October. A longer 12 week consultation period is proposed, to cover the Christmas period. In preparing the case for a discretionary licensing scheme the Council has considered what other options are available for it to address the identified problem of poor housing conditions. It is clear that the impact of poor housing cannot be effectively overcome by relying on a complaint driven model and a mandatory HMO licensing scheme.  The evidence presented supports the need for a significant number of properties in the private rented sector need to be inspected in order to determine whether any of those properties contain category 1 or 2 hazards.The identification of hazards through inspections will allow the authority to use Part 1 powers of the Act to detail the serious deficiencies identified and set landlords and licence holders timescales for taking the appropriate action in line with the improvement notices or prohibition orders served.  Where there are situations of non - compliance the Council would look at the options of work in default, prosecution or financial penalties. Other courses of action that individually or collectively could assist the Council in tackling the poor property conditions in the Private Rented Property (PRS) include: Support the PRS maintaining current service (incorporating); Use of Part 1 Housing Act 2004 enforcement powers and wider enforcement powers such as Public Health powers; Rely on the impact of prosecutions and civil penalties for housing offences; Improvement grants to improve sub-standard properties; Targeted use of Interim Management Orders (IMOs) and Final Management Orders (FMOs); Informal area action; Area based voluntary accreditation schemes; Introduction of area based (part borough) Additional HMO Licensing [scheme and / or Selective Licensing Scheme; Introduction of full borough Additional HMO Licensing scheme and / Selective Licensing Scheme. The Transform UK feasibility study for selective licensing made the case that the statutory evidential requirements for introducing licensing were met.  The evidential test of poor housing conditions was met in 14 wards. The feasibility study also made the case that the statutory evidential requirements for introducing additional HMO licensing were met.  Given the prevalence of HMO’s being poorly managed and with a category one hazard being found in all wards, only one option of a borough wide scheme was considered. Having considered the evidence and the strengths and weaknesses of all options, it is recommended that the Council consults residents and partners on a selective licensing scheme covering 14 wards and a borough wide additional HMO licensing scheme.

Date of Decision: October 3, 2025