A mother with a baby charged £350 a month in rent for living in a shed, a family with two children charged £700 a month for a property condemned as dangerous, and a former council house overcrowded and cockroach-infested, with tenants being charged equally grotesque rents.
These are just some of the abuses and outright exploitation that Newham council’s private rented licensing scheme has uncovered. Yet it could be cancelled by the government later this year if communities secretary Sajid Javid decides not to renew the scheme.
The signs are not good. The government has already turned down an application from Redbridge council for a similar licensing scheme and former housing minister Gavin Barwell, now the prime minister’s chief of staff, has declared these common-sense schemes “misjudged and nonsensical”.
The vast majority of landlords are responsible and the private rented sector has an important role to play in addressing the housing crisis, but rising rents and a lack of regulation has left many people vulnerable to exploitation by criminal landlords.
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Urgent action is required to address the scandal of illegal evictions, extortionate rent rises and the provision of sub-standard accommodation that fails to meet even the most basic health and safety standards. Yet the government has offered no solutions and has shirked its responsibility to fix what even the prime minister has called Britain’s “broken housing market”.
While ministers sit on their hands, Labour councils are acting to tackle the problems renters face. In 2013, Newham council in east London was the first in the country to take decisive action to safeguard vulnerable families and individuals in the private rented sector by introducing borough-wide licensing, making use of powers given to councils by Labour in 2010.
Under private rented sector licensing, landlords are required to register any properties they rent with the council and must agree to a set of conditions to ensure that properties are of a good standard and properly managed. Councils know which properties are being rented and have extra powers to enforce standards.
The success of this type of scheme speaks for itself: in Newham alone, the council’s figures show that more than 1,215 landlords have been prosecuted and 28 of the worst offenders have been banned. A total of 25 letting agents have been subject to penalty charge notices or other legal action and more than £2.8m in council tax has been recovered.
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Through Newham’s landlord licensing scheme, a significant number of landlords are of interest to HMRC because of potential discrepancies between declared rental income and Newham’s records. Analysis by Newham council and the Institute for Public Policy Research suggests that across London tax evasion by landlords could be costing the Exchequer up to £200m a year.
Newham’s licensing scheme also commands widespread support from residents, the local police, fire services, neighbouring boroughs and the mayor of London
Yet pioneering schemes like Newham’s are now under threat. In 2015, the Government curtailed local authorities’ powers to introduce landlord licensing schemes and required them to be approved by the secretary of state. Newham’s scheme is up for renewal and there is a very real danger that the government may veto it.
The private rented sector is growing rapidly – a third bigger than in 2010. In Newham, nearly half of residents now rent privately, which makes the landlord licensing scheme more important than ever.
Failing to address exploitation carries a huge human cost on the lives and life chances of individuals, families and children growing up in overcrowded, unsafe and unsanitary conditions, with little security or stability. Failing to tackle criminal landlords who exploit their tenants also risks giving reputable landlords a bad name.
Everyone concerned with fixing the broken housing market and driving up living standards in the private rented sector should be watching this decision closely.