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Private Rented Sector Review
2008
conducted for Communities & Local Government by Dr Julie Rugg
& Dr David Rhodes
At the beginning of 2008, Communities & Local Government commissioned
a Review of the Private Rented Sector from Dr Julie Rugg and Dr
David Rhodes of the University of York. In the preparation of the
Review, the National HMO Lobby was pleased to participate in a Policy
Round Table on Student Housing, with Dr Rugg in London on 4
March 2008. The completed Review, titled The
Private Rented Sector: its contribution and potential,
was launched in York on 23 October 2008. The Lobby has responded
to the Review. The government response to the Review was published
on 13 May 2009, as The
private rented sector: professionalism and quality - The Government
response to the Rugg Review. The Lobby submitted a Representation
on the consultation on the Government Response to the Rugg Review
on 6 August 2009. In turn, on 3 February 2010, CLG published
The private rented sector: professionalism and quality –
consultation: Summary of responses and next steps.
Representation to the
Private Rented Sector Review 2008
conducted for Communities & Local Government by Dr Julie Rugg
& Dr David Rhodes
presented to the Policy Round Table on Student Housing,
with Dr Rugg in London on 4 March 2008
1 Dr Richard Tyler began his academic career teaching art history
at Leeds College of Art & Design, subsequently teaching visual
culture at Leeds Polytechnic, and finally, cultural studies at Leeds
Metropolitan University and York St John College. On retiring from
paid employment, Dr Tyler has co-ordinated both Leeds HMO Lobby
and also the National HMO Lobby, which campaign locally and nationally
for the management of houses in multiple occupation (HMOs) in the
interest of the community as a whole. Dr Tyler recently published
'Comprehending Community' in Herbrechter & Higgins, Returning
to Communities.
2 The National HMO Lobby began in 2000, as a response to the peculiar
impact on local communities of concentrations of HMOs. It is now
a network of over fifty local community groups in thirty or so towns
in all the countries and regions of the UK. Its concern is with
all sorts of HMOs, but especially with student shared houses, which
since the turn of the millennium have been the main driver of the
HMO market. "Students represent one of the largest demand groups
for private rented accommodation" (Rhodes, 2006, p76). They
have generated the main concentrations of HMOs, what is now termed
'studentification (following Smith, 2002). The Lobby is about to
publish its position statement on Balanced Communities &
Studentification. It has also published Briefing Bulletins
and Discussion Documents on varied aspects of this campaign, including
'Local HMO Plans' and 'What is a HMO?' Information on the Lobby
and its lobbying is available on its website at <www.hmolobby.org.uk>
Can the PRS deliver student housing without undermining
community cohesion?
3 The issue of student housing is complex, and any attempt to understand
this complexity must avoid a simplistic approach. The most obvious
simplification is to mistake opposition to studentification for
opposition to students. But all the subsidiary questions addressed
below are vulnerable to simplistic responses. However, first of
all, an initial complexity which needs to be clarified is the role
of the private rented sector (PRS) in delivering student housing.
A minority of students make a rational decision to study from home.
But the great majority (uniquely in the world) rent accommodation
away from home during term time. This accommodation can take many
forms. At one extreme is (a) the shared house, converted to a greater
or lesser degree from a family home; then (b) larger domestic dwellings
may be converted into two or more shared flats; next (c) some groups
of students rent individual flats in apartment blocks; then (d)
many new purpose-built developments (PBDs) for students comprise
blocks of cluster flats; and finally, at the other extreme, (e)
there are traditional halls if residence. (All of these are different
forms of HMO, as defined in the Housing Act 2004.) All of these
may be in either the public or the private sector - or somewhere
in between. (1) Higher education institutions (HEIs) traditionally
provide halls of residence, but many also own shared houses. (2)
However, most shared houses are rented from private landlords -
which may include traditional local landlords, or buy-to-let (BTL)
investors, or student parents; PBD flats may be rented from developers
(like UNITE). In between, (3) some HEIs lease their accommodation
stock to private companies; or they will head-lease rooms in the
PRS; or developers will contract with HEIs to provide dedicated
accommodation. PRS student housing is generally understood as privately-rented
HMOs - but it is important to recognise that this is only one form
that student housing can take. (Rugg et al, 2000, discuss 'The student
niche market' in Chapter 4; significant changes in the market have
taken place since then, but otherwise, the report remains largely
pertinent.)
# Can the PRS accommodate a further increase in student
numbers?
4 It is important to ask the question, can the PRS accommodate
a further increase in student numbers? But it is also important
to ask, not only will the PRS actually need to provide increased
accommodation? but also should it?
4.1 "The student niche market is particularly robust"
(Rugg, p34). There is no doubt that if it is required, the PRS could
accommodate a further increase in student accommodation. The PRS
is a market, and students constitute a very powerful sector therein.
They are willing to share in comparatively high numbers, in any
type of accommodation. And the majority are from families in middle
and higher income brackets. On either or both grounds, they can
therefore outbid competing markets. And their purchasing power is
such that, if necessary, their providers (landlords) can increase
the stock available by purchase from owner-occupiers. "Student
demand had a substantial impact on the local owner occupied market"
(Rugg, p33). Rugg et al consider 'The impact of student demand on
local housing markets' (Chapter 4), and show that "student
demand pushes out other non-student tenant groups." (See also,
Appendix 1, Belfast.)
4.2 There is however a question as to whether an increase in the
PRS will be necessary, for a number of reasons. First of all, 'demographers
have warned that the number of 18-year-olds will drop dramatically
between 2010 and 2019 because of fewer births in the 1990s' (Shepherd,
2008). Secondly, the number of students studying from home is increasing
slowly; if tuition fees rise (as is widely assumed: see Shepherd,
2008), this is likely to continue. Thirdly, the traditional PRS
(shared HMOs) is under increasing competition from PBD provision.
Investment in student housing is still promoted in the property
press, especially in towns with new and expanding HEIs. However,
while established larger universities (like Nottingham and Leeds)
will remain competitive, not all of these are expanding; in a period
of contraction, newer universities will be most vulnerable. The
pattern of demand is likely to be highly variable.
4.3 The question remains, should PRS student housing expand
(if this means traditional shared HMOs)? The traditional PRS entails
massive social costs, especially when concentrations of HMOs develop
(such concentrations are described in Rugg, pp17-19; see 6 and 8
below). Arguably, if there is to be any expansion, it should be
in less damaging forms (see 7 below).
Recommendation: that in their Local Development
Frameworks (LDFs)
(1) where concentrations of HMOs have arisen, Local Planning Authorities
(LPAs) should adopt Areas of Multiple Occupation Restraint, in order
to prevent further deterioration; and
(2) where there is potential for concentrations of HMOs to spread
or develop, LPAs should adopt Thresholds for acceptable proportions
of HMOs.
# How can student interests be protected in the open-market
PRS?
5 The first point that should be made is that the interests of
all tenants in the open-market PRS should be protected.
There is no particular reason why students should receive special
treatment, especially as in many respects their position is already
advantageous. ("No other group within the rented subsector
receives the level of assistance afforded to students," Rugg,
p20; see Appendix 3, Southampton.) The threats to all PRS tenants
arise from incompetent (or dishonest) management, from inadequate
(or dangerous) properties, and from vulnerability to crime (burglary).
These threats are acute if the letting is the tenant's only residence
(which is not the case with students). Students have the support,
not only of their parents, but also of the welfare services of their
unions. Increasingly, many have the alternative option of PBD. Nevertheless,
NUS argues for the right of students to seek accommodation in the
open market - and therefore to take the accompanying risks. The
government has however recognised the vulnerability of many tenants
in the PRS, and in the Housing Act 2004, has introduced three forms
of licensing - Mandatory HMO Licensing, Additional HMO Licensing,
and Selective Licensing. Students (along with all other PRS tenants)
benefit from PRS licensing, certainly from Mandatory HMO Licensing
and potentially from Additional HMO Licensing - though few local
housing authorities (LHAs) have yet taken advantage of the latter.
Surprisingly little interest has been shown in Additional HMO Licensing
by NUS.
Recommendations: (1) that Community Associations,
HEIs and Student Unions establish tripartite alliances to lobby
Local Housing Authorities to apply to the Dept for Communities &
Local Government (CLG) for Additional HMO Licensing in areas with
high numbers of student HMOs;
(2) that CLG encourage such applications, and expedite their approval
when submitted.
# What policies can local authorities and HEIs put
in place to ameliorate the concerns of local residents?
6 Here of course it is important to identify accurately what are
the concerns of local residents. Such residents have established
the National HMO Lobby precisely in order to articulate their concerns
- and to propose remedies. It is very regrettable that recent publications
by both Universities UK (2006) and by NUS (2007) have failed to
recognise these concerns, though they have been widely disseminated
in consultations and conferences. For this reason, the Lobby is
about to publish its own position statement, Balanced Communities
& Studentification (2008).
6.1 The first point to make is that studentification is a complex
phenomenon, comprising both causes and effects. The immediate cause
of studentification is demographic imbalance, where the proportion
of students passing through a neighbourhood increases to the point
where it destabilises the resident community (the Lobby estimates
that 20% is the maximum proportion that can be accommodated without
serious problems emerging). The imbalance in turn arises from a
demand for accommodation, which is not met by HEIs, which is therefore
satisfied by the PRS, but which is without management by the LPA.
This unregulated market in its turn arises from government policy
to expand higher education, without giving either HEIs the resources
to accommodate their increased students, nor LPAs the power to manage
the consequent market. (The process is summarised in Chapter 2 of
Rugg et al, though their average of 2,843 students per HEI living
in the PRS is a major under-estimate - the figure in Leeds is ten
times that.) Demographic imbalance has a twofold effect
on a neighbourhood. On the one hand, social, environmental and economic
problems arise from a population which is predominantly young, transient
and seasonal (especially, crime, squalor and a resort economy).
On the other hand, the neighbourhood sees a decline of the community
which normally keeps that neighbourhood clean and quiet and safe.
Rugg et al draw attention to 'student ghettoisation', pp29-30. The
effects of studentification were first acknowledged by the government
in the CLG report on the PRS in 2006.
6.2 The second point to make is that any policies put in place must
address both sides of the equation, both causes and effects. In
fact, Universities UK's 'Checklist' goes a long way to addressing
the effects of studentification - while entirely ignoring the causes
(and thereby undermining any possibility of their being effective:
see Appendix 2, Nottingham). The National HMO Lobby therefore proposes
a Ten Point Plan (outlined in Balanced Communities & Studentification)
to tackle the causes of studentification.
Recommendations: (1) that each local authority
affected by the symptoms of studentification adopt the Ten Point
Plan proposed by the National HMO Lobby;
(2) that each such authority include within its Plan the Checklist
of actions proposed by Universities UK.
# What is the contribution of large-scale private sector
halls of residence: advantages/disadvantages?
7 'Large-scale private sector halls of residence' are here referred
to as PBDs (purpose-built developments). Their advantages and disadvantages
need to be considered from the perspective of all parties involved
- not only students, and not only HEIs - but also their potential
neighbours, the local community. Any assessment depends on both
intrinsic factors (the PBD itself) and extrinsic factors (their
location).
7.1 As noted above, threats to tenants (including students) in the
PRS include bad management, poor facilities and weak security. All
PBD is now required to join one of a number of accreditation schemes,
whose purpose is precisely to ensure high quality management and
facilities. The problem of crime (burglary) arises precisely when
concentrations of student HMOs develop - they present a tempting
combination of soft targets and rich pickings in a compact area,
attracting burglars from much further afield than is normal. By
comparison, PBD offers a high degree of security. The trade-off
for these advantages are higher rents. (NUS disagrees: "The
growth of high-density, expensive, purpose-built student developments
has done little to solve problems, and risks exacerbating them,"
NUS, 2007.)
7.2 For HEIs, PBD offers improved facilities for their students:
"HEI accommodation policy officers noted that offering student
residences comprised an advantage when it cane to recruitment"
(Rugg, p13). In addition, PBD potentially offers improved relations
with HEIs' neighbours, the local community.
7.3 For this local community, the advantages or otherwise of PBDs
depends entirely on location. The Lobby supports PBD in principle,
but with several qualifications. (1) The problem of studentification
is one of demographic imbalance, rather than type of accommodation;
a PBD can contribute to this imbalance as much as HMOs (or more,
due to their density of accommodation). (2) PBD does provide an
alternative to conversion of family homes to HMOs (which the Lobby
welcomes), but there is not a simplistic transfer - in fact, a PBD
can actually intensify demand for HMOs in its immediate vicinity
(students leaving the PBD, or friends of those in the PBD, look
for accommodation nearby). (3) The presence of a PBD, with the increase
of traffic (both foot and vehicular) and of noise, is a deterrent
to families in the immediate vicinity. The Lobby's support for PBD
depends on their location. (a) In areas already studentified, PBD
is not welcome - as it simply exacerbates the existing problems,
without offering local communities any advantage. (b) On campus,
PBDs offer alternative accommodation, which can release HMOs back
into the residential housing market, while removing noise and traffic
from the neighbourhood (provided the campus is insulated from the
surrounding community). (c) Elsewhere, PBD again provides alternative
accommodation, relieving demand for HMOs, and easing demographic
pressure; some argue that PBD in areas of decline can have a regenerative
effect boosting the local economy (others are considerably less
certain).
Recommendations: (1) that LPAs adopt general
LDF policies which favour PBD outside traditional student areas
[such as Policy H15A of the Leeds UDP);
(2) that LPAs adopt particular planning guidance identifying and
evaluating potential sites for PBD [such as Newcastle upon Tyne's
Interim Planning Guidance on Purpose Built Student Accommodation,
November 2007].
The National HMO Lobby's Representation has attempted to guard
against a simplistic approach to PRS student housing. To consider
student housing (only) in terms of community cohesion (only) is
itself in danger of being simplistic. The Lobby therefore proposes
two further questions.
# Is 'community cohesion' the only social cost of student
housing in the PRS?
8 "Student housing issues travel beyond the student population
and affect the broader arena of private rented housing and local
housing markets generally," (Rugg, p32). The impact of concentrations
of student housing (whether HMOs or PBD, whether public or private)
is profound for the cohesion of local communities. Indeed, in the
most extreme instances, cohesive local communities are entirely
supplanted by a population in the process of continual change. But
this is not the only cost of PRS student housing. Privately-rented
student HMOs are only seasonally occupied. In the case of parent-owned
HMOs, they are very evidently second-homes, occupied in addition
to the family homes, while the children are away at university.
But the same is actually equally true of HMOs let by landlords or
investors - these are not first but second homes, occupied on a
seasonal basis. In fact, many suburbs are similar to rural locations,
dominated by what are effectively second-homes and holiday-lets.
(Since the seasons are reversed, many PBDs are actually let during
vacations as holiday accommodation.) The urban consequence is the
same as the rural - a shortage of housing for local residents. There
is national pressure for a huge programme of house-building, to
address the housing shortage in the UK. But what the Housing Green
paper entirely neglected was efficient (and ethical) use of existing
stock. 1% of the housing stock in England & Wales is currently
not available as first homes because it has been appropriated as
second-homes by existing home-owners. And this figure does not include
housing let to students. Recently in Leeds, a council house which
became vacant received 490 applications - yet at the same time,
some 5,000 of the city's houses are out of circulation as student
HMOs. "A principal consequence of the growth of the student
niche market is that in many areas there has been a substantial
shift of properties from the owner occupied residential sector to
the PRS" (Rugg, p35). This shift represents a second massive
social cost.
Recommendations: (1) that in general, disincentives
to urban second-home ownership are developed, in parallel with those
in rural communities;
(2) that in particular, since HMOs are used as temporary accommodation
only, they are classed as non-domestic concerns (like hotels) for
the purpose of local government finance, and in consequence subject
to Business Rate, rather than to Council Tax.
# Are these costs peculiar to student housing in the
PRS?
9 As its name indicates, the National HMO Lobby's concern is not
essentially with student housing, but with HMOs, because of their
peculiar impact (in concentrations) on local communities. The Lobby
focuses a good deal of its attention on student housing, as this
is the major driver of concentrations of HMOs. But it is by no means
the only one. Concentrations of HMOs have arisen (and are arising)
in very different circumstances, but with very similar impacts.
One of these contexts is coastal towns. Indeed, it was problems
in these locations which prompted the first moves towards registration
or licensing of HMOs, long before student concentrations became
a problem. HMOs at the seaside continue to be a problem, highlighted
in last year's report by the Commons Committee for CLG. A more recent
phenomenon is the use of HMOs to house migrant workers, especially
(but not only) in market towns. Peterborough has recently achieved
notoriety in this context. The CLG Evaluation of the impact
of HMO licensing made no reference to student HMOs, but gave numerous
examples of the problems which arise. Meanwhile, where the phenomenon
of de-studentification arises (where student HMOs are evacuated
in favour of PBD) alternative markets may move into the empty HMOs
(indeed, student landlords use this development as a threat to community
activists). The need to address the issue of concentrations of HMOs
is therefore far wider than simply student housing.
Recommendation: that the Use Classes Order
is amended (a) to adopt the definition of HMO provided in the Housing
Act 2004, and (b) to remove HMOs thus defined from Class C3 [following
the model of the Use Class Order revision in Northern Ireland].
10 In conclusion, the National HMO Lobby does not consider that
the PRS can deliver student housing without undermining community
cohesion. There is no doubt that the PRS can deliver student housing.
But the PRS is a market, and markets tend towards a herd mentality.
Flourishing markets attract extra business, which is why the PRS
will match any expansion in student numbers. But where markets are
geographically-based, as is housing (location, location, location),
then they also generate concentrations. It is precisely the concentrations
of HMOs, with a population which is essentially transient (whoever
the tenants are), which undermines population stability - the essential
pre-requisite for cohesive, sustainable communities.
Recommendation: that (in the words of Rugg
et al) "a housing strategy should be integral to the expansion
plans of every HEI, and comprise an analysis of likely impacts on
the local rental market and consultation with local community groups."
References
Communities & Local Government Housing Research Summary 228
Dealing
with 'Problem' Private Rented Housing
London, 2006
Communities & Local Government, Evaluating
the impact of HMO and Selective Licensing: the baseline before licensing
in April 2006, London, 2007
Communities & Local Government, Homes
for the Future: Housing Green Paper, London, 2007
House of Commons, Communities & Local Government Committee Coastal
Towns, London, 2007
National HMO Lobby, Balanced Communities
& Studentification, Leeds, 2008
National Union of Students, Students
in the Community: Working together to achieve harmony,
London, June 2007
National Union of Students, 'PBD
: Not the Solution', Town Gown World, December 2007
Newcastle City Council, Interim
Planning Guidance on Purpose Built Student Accommodation,
November 2007
David Rhodes, The Modern Private Rented Sector, Joseph
Rowntree Foundation, York, October 2006
Julie Rugg, David Rhodes & Anwen Jones, The nature and impact
of student demand on housing markets, Joseph Rowntree Foundation,
York, 2000
Jessica Shepherd, 'Who will weather financial storm?' EducationGuardian,
19 February 2008
Darren Smith, 'Patterns and processes of studentification in Leeds',
Regional Review 12:1 (2002) pp14-16.
Richard Tyler, 'Comprehending
Community' (pp21-28), in S Herbrechter & M Higgins, eds,
Returning (to) Communities: Theory, Culture and Political Practice
of the Communal, Rodopi, Amsterdam & New York, 2006
Universities UK, Studentification:
a guide to opportunities, challenges and practice UUK,
London, January 2006
National HMO Lobby, 4 March 2008
^Top
PRS
Review 2008 Response
1 The National HMO Lobby is concerned with houses in multiple occupation
(HMOs), which are largely privately rented. The Lobby therefore
welcomed the Review of the Private Rented Sector (PRS) commissioned
from Dr Julie Rugg and Dr David Rhodes of the University of York
by Communities & Local Government (CLG) at the beginning of
2008. And the Lobby was pleased to participate in the Policy Round
Table on 'Student Housing', with Dr Rugg in London on 4 March 2008.
2 The National HMO Lobby welcomes the majority of the published
Review, titled The
Private Rented Sector: its contribution and potential,
launched in York on 23 October 2008. The Lobby welcomes the analysis
of the contribution of the PRS, much of the discussion of its potential,
and many of its recommendations - in particular, its proposals for
promoting housing management, light-touch licensing, and improving
tenancy frameworks.
3 However, the Lobby has major reservations about several aspects
of the Review. Part One, the Introduction, says, "At the heart
of the Review is the general desire to see the PRS as a less marginal
tenure" (p6). This is a value-laden principle which should
surely follow, rather than precede, study of the PRS. The Review's
own research shows that this principle may be questionable, at least.
It shows that the PRS is largely parasitic on other tenures: "the
PRS is growing, but much of this growth reflects tenure shift rather
than the addition of new property" (p15) and "growth in
the PRS has come largely through its absorption of properties from
other tenures" (p46). Significant numbers of PRS tenants are
dissatisfied with the quality of management (p6). The sector's property
is worse than either of the other sectors (50% fails to meet the
decent homes standard, p68). And the PRS is the refuge of slum landlords
(p21; it has bequeathed the term 'Rachmanism' to the language).
In this context, judgement on the PRS should be reserved.
4 Part Two of the Review is on the Contribution of the PRS. Chapter
2.1 on the 'Buy-To-Let Landlord' is concerned with PRS supply, concentrating
mainly on the BTL phenomenon. On the whole, the PRS absorbs owner-occupied
properties: where it does contribute to new-build, this may be focussed
on niche markets, like student halls (p42). However, though they
are new-build, such developments are not new homes. Students demanding
PRS accommodation are in fact looking for second homes. Indeed,
one category of properties supplied by BTL is "parental purchase
of a house for a child who is a student, where rooms are let out
to other students" (p11). (In fact, 23% of BTL investors buy
student accommodation [Property Investor Show, 2007].) Properties
are also bought and let as holiday accommodation. Another line of
investment is weekday crashpads for commuters. The PRS contribution
to the growth of second-homes deserves closer attention [NHPAU,
2008].
5 Chapter 2.2 is titled 'The roles of renting in housing biographies',
and is concerned with PRS demand. It notes that wherever they live
now, many people have at some time passed through the PRS. The chapter
observes that private renters tend to be young and mobile, and "likely
to live in shared households" (p12). Indeed there is a degree
of transferability between PRS markets, due to these characteristics:
"student landlords are looking to alternative tenant groups
to fill properties previously let to students" (p18). The use
of HMOs by both students and migrant workers is noted (p98); benefit
claimants and others could be added. In this respect, an analysis
of the PRS in terms of household demand would be useful - the proportions
taken up by single people, by family households, and by HMOs.
6 Chapter 2.3 is concerned with 'defining niche markets', "the
most readily distinguishable of which is probably the student rental
market" (p4). It is surprising therefore that the section on
'Students' (pp17-18) includes no real attempt to estimate the absolute
size or overall proportion this comprises of the PRS, especially
as its scale is later belittled (p99). But earlier in Part Two this
market is identified as 16% of the population of the PRS in 2001
(p13) or 13% of PRS households a few years later (p14; given that
these are HMOs, the population figure will be considerably higher).
More recently, some 750,000 students are estimated to be demanding
PRS accommodation (p13). Otherwise, most of this section is devoted
to the intervention of corporate student landlords, even though
this evidently comprises only a fraction of the market (c100,000
is estimated, less than 15%). Undoubtedly this intervention impacts
on demand for shared houses - but this impact is as yet marginal.
7 The final chapter of Part Two addresses spatial considerations.
Regional variations are noted, and the particular cases of Greater
London and the rural PRS. It is noted that "differences in
rental markets can be highly localised even amongst neighbouring
areas" (p30). And elsewhere, it is noted that "these sub?markets
may be spatially concentrated or widely dispersed … in some
instances the intensive concentration of demand is a characteristic
feature" (p15). It would be of considerable interest to learn
more about these concentrations, how intensive they might be, which
niches they are associated with, and where they might typically
be found. In fact, the CLG Committee's report on Coastal Towns
identifies coastal towns as one such location [CLG Committee, 2007;
see also, CLG, 2008]. University towns are another, as are some
market towns. (Leeds and Blackpool are two examples, noted on page
4, though not in this context.)
8 Part Three of the Review is concerned with the Potential of the
PRS. The Review returns to the student niche market in Chapter 3.7
on 'problem private renting.' First of all, the National HMO Lobby
regrets that student housing has been isolated as a problem. Certainly,
the Lobby has been concerned with student housing, and indeed it
has been concerned especially with student housing. But it has always
been clear that this is the case only because student housing has
been the main driver of what is actually a much wider phenomenon.
The Lobby does not lobby on student housing, but on HMOs; and it
does not lobby on HMOs per se, but on concentrations of
HMOs. As the ECOTEC Report on HMOs makes clear, HMOs are occupied
by a very wide range of tenants [ECOTEC, 2008]. They may or may
not be problematic individually. But it is in the nature of the
characteristics of their occupancy that they do become problematic
in concentrations. Arbitrarily narrowing the focus of the issue
to a single social group, as the Review does, readily facilitates
the accusation that any discussion of it is 'xenophobic' or 'discriminatory'
(pp100, 101).
9 The first paragraph of the section on 'student housing' fairly
summaries many of the problems associated with concentrations of
HMOs, such as student colonies associated with higher education
institutions (HEIs). It omits endemic low-level antisocial behaviour
(ASB), and more seriously, the erosion of local social capital (loss
of social networks, closure of schools, civic disengagement [e.g.
low electoral turnout]). It identifies the different experiences
of large and small university towns. It does not note that the larger
towns may also experience other HMO problems; nor that other smaller
(coastal, market) towns may also be overwhelmed by HMO numbers.
10 The second paragraph of the section belittles the problem, as
"clearly not a widespread issue" (p99). But the quantification
of the issue is highly suspect. First of all, wards are used as
a basic measure: but wards are political units, and are not statistically
comparable; they vary in size between local authorities. The Output
Areas used by the Census would provide a sounder base. Secondly,
the size of many wards means that any concentration of students
(or of HMOs) has to be enormous to make an impact. Hence, wards
only partially studentified are omitted (in Leeds for instance,
Headingley and University Wards are accompanied by Kirkstall and
Weetwood Wards, to constitute a student colony covering some two
square miles altogether). Thirdly, counting households (HMOs) rather
than populations minimises the issue: the average HMO houses twice
the number of occupants of the average single household (so in the
five wards noted on page 99, half or more of the population of each
consists of students). Again, only student HMOs have been considered:
many wards contain also (or alternatively) HMOs with different occupants.
The problems are certainly acute at street level. To conclude that
this "is not a widespread issue" is simply untrue, when
it affects over thirty UK towns at least. And all the figures given
are seven years out of date. (The question might be asked, how broad
or deep does an issue need to become before it deserves attention?
What are the quantitative or qualitative thresholds, the 'tipping-point'?)
11 The third and fourth paragraphs turn to planning controls, and
the Use Classes Order (UCO) in particular, as a solution. This of
course is the only measure available to deal with concentrations
of HMOs (whether or not occupied by students). The inferences made
about 'additional burdens' on local planning authorities (LPAs)
are alarmist. The UCO would be ineffective without local planning
policies on HMOs: LPAs which had no problems with HMOs need only
forego such local policies. The legislative changes proposed would
not need to be activated where they were not relevant. Where they
are needed, LPAs are already consumed by 'additional activity' generated
by the presence of HMO concentrations.
12 The fifth paragraph is concerned with antisocial behaviour.
The Review suggests that leniency is extended to students, while
"anti?social behaviour that may be linked to deprivation and
social exclusion" (p100) is not tolerated. This contains some
truth. What it overlooks is the fact that student ASB is low-level
and endemic, below the threshold of police attention, but recurrent
and ubiquitous throughout areas of HMO concentration.
13 The following paragraph continues the theme, and blames local
authorities for failing to address the issues. There is indeed "no
reason why student housing should be regarded as standing outside
these regulatory frameworks" (p100) - no reason at all, apart
from pressure on resources. Larger towns could re-direct their resources
to HMO areas; smaller towns simply lack the resources altogether.
(Students in particular pay no Council Tax; and many local authorities
argue that they are inadequately recompensed by central government.)
The examples of 'good practice' cited are quite inadequate to the
problem.
14 The sixth paragraph addresses economic issues, and adopts a
'common sense approach' (p. xxi) (despite the Review's avowed first
principle, to oppose 'presumptions' about the PRS, p2). The Review
asserts that house prices are only slighted inflated in university
towns. But the figures given are for the towns as a whole, not for
the areas of studentification. Meanwhile, there is no question that
a HEI may be beneficial to the economy of a town. Whether the area
of student concentration shares that benefit is another matter.
Rather, this area experiences an economy which is distorted (towards
a specific market), seasonal (term-time) and casualised - a 'resort'
economy in fact, in common in many ways with coastal towns.
15 The next paragraph turns to wider community impacts - or rather,
it fails to do so. The Review correctly notes the pace of change:
student presence in the PRS doubled in the decade 1989-1999. It
has continued to increase in the following decade. The Review does
not even begin to consider the impact that this scale of change
has for the social capital of a local community - its impact on
social mix, on community cohesion, and ultimately on the sustainability
of any meaningful community at all [Tyler, 2006].
16 The final paragraph considers remedial measures. It chooses
two instances which support the contention of discrimination. But
one of these is inaccurate (there is no 'Area of Student Housing
Restraint'; Leeds has an Area of Housing Mix). And several LPAs
have adopted policies on HMOs, which are proper planning policies,
concerned with land use and not social groups. Many of the 'alternative
local approaches' which have been identified by the ECOTEC Report
are recognised in that Report as inadequate to the task. [ECOTEC,
2008]
17 The section raises the question, "whether this problem
is indeed a housing problem" (p100)? Of course, it is not.
The Review suggests that it is rather 'a policing issue'. The Review
fails to consider why it has become a policing issue. Most neighbourhoods
do not suffer the noise and waste problems endemic to concentrations
of HMOs - and this is because they are self-policing. HMO-concentrations
lack self-policing, both because they comprise multiple (un-policed)
households, and because they are inherently transient. Policing
therefore has to be state-policing, which entails high expenditure
of human and material resources. The whole point of the planning
system is to avoid such circumstances arising. The problem is not
a housing problem, and therefore is beyond the remit of the Review.
It is appropriately addressed - as a planning issue - in the ECOTEC
Report Evidence Gathering - Housing in Multiple Occupation and
possible planning responses [ECOTEC, 2008].
18 The section on migrant workers (pp102-3) concentrates on overcrowding,
in what are of course HMOs. The problems are typical. The use of
unsuitable structures, like garages, and the resistance of established
communities to "previously owner?occupied properties transferring
to multi-occupancy, particularly when the change happens over a
very short period of time" (p103) - these are characteristic
of most HMO concentrations. The Review admits here that such issues
remain problematic.
19 'Obstacles to effective management' are considered next (pp103-4).
It is certainly the case that local authorities are frustrated by
HMO licensing requirements. And in some authorities (by no means
all) there is a "failure to resource the co?ordination of PRS-related
activity." However, it is quite untrue to assert that "it
was felt [in stakeholder meetings] that there were sufficient powers
available to local authorities to deal with the incidents of problem
private renting." The ECOTEC Report makes clear that planning
officers are unanimously dissatisfied with the powers available
to them.
20 The concluding section of Chapter 3.7 is concerned with 'Aims
for strategic management of the PRS'. The Review expresses scepticism
about the aim to achieve balanced communities, and the concomitant
notion of a tipping-point (the threshold between balance and imbalance).
The Review seems unfamiliar with Policy Planning Statement 3 on
Housing [CLG, 2006b], which is very clear about the need
for housing mix. It is stated as an objective: "The Government
is seeking to create sustainable, inclusive, mixed communities in
all areas … The specific outcomes that the planning system
should deliver are a mix of housing, both market and affordable,
particularly in terms of tenure and price, to support a wide variety
of households in all areas" (paragraphs 9-10). In particular,
paragraphs 20-24 are concerned with 'Achieving a mix of housing.'
PPS3 makes clear that 'mix' should be conceived both in terms of
tenure (owner-occupation, social renting, PRS) and of social diversity
(children, elderly, etc). A neighbourhood dominated by HMOs evidently
fails to meet such criteria: the tenure balance is abnormal, and
social diversity is replaced by a very narrow demographic. 'Common
sense' (as well as history) indicates that social mix is preferable
to polarisation; and academic study does so too [Minton, 2002].
In the case of domination by HMOs, problems of polarisation are
compounded by the transience of the population. The Review accepts
that transience impacts detrimentally on communities. But it seems
to claim that "the needs of the labour market for a mobile
and educated working population" (p106) are sufficient justification.
This is not the conclusion of the residents affected, nor of their
local authorities, nor of national planning policy on housing, as
articulated in PPS3.
21 Part Four makes recommendations on the PRS, or rather, proposes
'policy directions of travel.' The first of these is 'developing
a sound evidence base' (pp109-110). This is endorsed by the Lobby;
there are many omissions in our knowledge of the PRS, as suggested
in paragraphs 4-7 above.
22 Part Four also suggests 'light-touch licensing' (pp112-30. This
is welcomed by the Lobby. Earlier, the Review noted that the potential
of selective licensing "was being stifled by the restrictive
eligibility criteria and the bureaucracy that was attached to the
application" (p102), and also, "where local authorities
did not have HMOs that met the Housing Act 2004 definition, but
had other problematic shared properties, it was not always straightforward
to apply for additional licensing to bring those properties into
the licensing framework" (p103). Comprehensive licensing would
obviate these difficulties. The Lobby agrees that "it should
not be possible for landlords to let without a licence" (p113).
23 Part Four naturally concentrates on housing strategies to improve
housing in the PRS. Where it considers planning solutions, these
are briefly dismissed (paragraph 11 above). But some developments
in the PRS, specifically concentrations of HMOs (typically, but
by no means exclusively, shared student houses), are widely regarded
as problematic - in university towns [UUK, 2006], in coastal towns
[CLG Committee, 2007] and elsewhere [CLG, 2007b]. Indeed, CLG commissioned
research on HMOs in parallel with the PRS Review. The authors of
the Review have themselves recommended a planned approach to student
housing [Rugg, 2000], and Universities UK agrees [UUK, 2008]. The
recommendation of the HMO Report by ECOTEC is clear: "it is
our view that they [non-planning mechanisms] have limited impact
upon the longer-term issues surrounding houses in multiple occupation
… For this reason, it is suggested that Communities and Local
Government undertake wider consultation on proposed amendments to
the current Town and Country Planning (Use Classes) Order 1987"
[ECOTEC, 2008].
24 Part Five concludes the Review. Quite fairly it states, "the
PRS is a small but extremely important part of the housing market
in England" (p115). But no reasons are given for seeing the
PRS as 'a less marginal tenure', still less for 'growing the business
of letting' (p111). Earlier, the Review observed "if the government
accepts a commitment to increase the proportion of privately rented
households, it will have to decide which of the remaining tenures
- social housing or owner occupation - will have to bear the concomitant
reduction. The government has already expressed a commitment to
increasing the proportion of owner occupied households, so the only
alternative would be further decline in the proportion of tenants
in the social housing sector" (p47). But it is surely more
economically efficient if a home is owned by its occupant or by
a non-profit organisation - rather than by a profit-making third
party.
References additional to those cited in the Review
House of Commons, Communities & Local Government Committee Coastal
Towns (HC 351) The Stationery Office, London, 7 March 2007
Minton, A, Building
Balanced Communities: the US and UK compared, RICS, 2002
National Housing & Planning Advice Unit, Rapid
Evidence Assessment of the Research Literature on the Purchase and
Use of Second Homes, NHPAU, 10 October 2008
The Property
Investor Show, 21-23 September 2007
Tyler, R 'Comprehending
Community' (pp21-28), in S Herbrechter & M Higgins, eds,
Returning (to) Communities: Theory, Culture and Political Practice
of the Communal, Rodopi, Amsterdam & New York, 2006
Communities & Local Government, England's
Seaside Towns: A 'benchmarking' study, CLG, 3 November
2008
Universities UK, Studentification:
a guide to opportunities, challenges and practice UUK,
London, 26 January 2006
Universities UK, Universities
Planning Guidance, UUK, London, 19 May 2008
National HMO Lobby, November 2008
^Top
Representation
on the consultation on
the Government Response to the Rugg Review
1 The National HMO Lobby welcomes both the Rugg
Review of the private rented sector (PRS) itself, and the Government
response, and is pleased to contribute to the Consultation. The
Lobby was set up in 2000 by half-a-dozen community associations
concerned about the impact of concentrations of houses in multiple
occupation (HMOs) on their communities. This concern has been such
that nationally the Lobby now comprises nearly sixty groups in almost
forty towns throughout the UK. The Lobby's interest is in one element
of the PRS, and as such, it has been actively engaged in all developments
related to HMOs, such as the Housing Act 2004. Most recently, it
has been invited to contribute to both the Rugg Review of the OPRS
in general and to the ECOTEC Report on HMOs in particular. Information
on the Lobby and its work is available on its website.
2 The Lobby was invited to contribute to the Rugg
Review: it prepared a submission to the
Review and participated in the Review's Policy Round Table on Student
Housing in London on 4 March 2008. The Lobby attended the launch
of the Review in York on 23 October 2008, and its criticisms then
were elaborated in a Response in November
2008. As noted in paragraph 23 of the Rugg Response, CLG is "consulting
separately on possible options [that] will enable us to fully consider
the best approach for managing the effects that high concentrations
of HMOs can have." The Lobby has submitted a response
to the HMO Consultation (which includes comments on the Rugg Review,
at paragraph 05 and Annex B).
3 The Lobby has a number of observations on the
Government's Response to the Rugg Review. The first of these arises
from the Ministerial Foreword, where the [former] Planning Minister
Iain Wright MP says, "We will welcome views from all who have
a stake in the sector" (p6). On the previous page, the Minister
selects a key message from the Rugg Review, "Both landlords
and tenants should be encouraged to view letting and renting as
a less risky activity." The Lobby has no quarrel at all with
this message - but it does wish to emphasise that stakeholders in
the PRS spread wider than 'landlord' and 'tenant'. In particular,
these stakeholders include the landlord & tenants' immediate
neighbours in particular and the wider community in general. It
is a cliché, which nevertheless remains true, that the key
to any property is "location, location, location." The
quality of that location, on which both landlords and tenants rely,
is dependent, not on the landlord (who lives elsewhere) nor on the
tenant (who is a new arrival), but on the settled residents of the
neighbourhood. They are the invisible 'third party' in any property
transaction. And any developments which ignore the local community
are in the interests of none of the parties concerned.
4 One such development is licensing. The Rugg
Review recommended 'light-touch licensing'; the Response interprets
this as "a national register of private landlords" (p17).
The Lobby welcomes this proposal, and not only for the reasons put
forward in the Response. Information about privately-rented properties
is necessary, both for immediate neighbours and for the wider community.
(a) Neighbours have no difficulty in identifying who is responsible
for a property if it is owner-occupied (the owner lives there) or
if it is socially rented (the owner is a public body). Things are
not so easy when the property is privately rented, and the owner
may live far away. If things go wrong, it can be very difficult
for a neighbour to find out who is responsible and seek resolution.
A national register would provide a means of finding this information.
(b) It is national planning policy to seek 'housing mix' in local
communities (PPS3), which includes mix of tenures. Local planning
authorities (LPAs) have the responsibility of securing such a mix,
and for this they need information on local patterns of tenure.
Where properties are publicly owned (socially rented) this is not
a problem. But when they are privately owned, the LPA has no way
to distinguish owner-occupied properties from privately-rented properties.
Distinctions are important. For instance, there is high stability
in owner-occupied properties, but high turnover in the PRS (on average,
tenures of only eighteen months). In some locations, huge concentrations
of the PRS have developed with disastrous effects for local communities
(this indeed is the subject of the current consultation on HMOs
and possible planning responses). A national register would provide
LPAs with a means of monitoring the housing mix of local communities.
(c) These two needs, by neighbours in particular and by local communities
in general, imply that there should be some form of access to the
national register by both neighbours of registered properties and
by LPAs.
5 The second consideration noted above, in 4b,
has implications for the Response's discussion of the existing licensing
regime (pp19-22). Excessive concentrations of the PRS, and of HMOs
in particular, have a profound detrimental impact on the cohesion
and sustainability of local communities. The development of such
concentrations should be considered as a valid trigger for the introduction
of additional HMO licensing in these areas.
6 Paragraphs 24-26 of the Response propose written
tenancy agreements. The Lobby is inclined to consider that both
options proposed should be adopted - that is, statutory minimum
requirements for such agreements, accompanied by models available
for adoption by landlords. The Lobby recommends that such requirements
and models should include provisions which protect the interests,
not only of landlords and tenants, but also of neighbours and the
local community (for instance, relating to antisocial behaviour,
waste disposal, security, maintenance of the exterior, and so on).
7 The Lobby agrees that PRS agents should be registered
(Response, paragraphs 30-41). Where owners are absent, such agents
are in the front line of relations between the PRS and the neighbours
and the community.
8 The Response considers accreditation schemes
in paragraphs 83-88. The Lobby supports the extension and improvement
of such schemes, and some of our members have participated in their
development. They provide another avenue for the recognition of
neighbours and local community as the third party in the PRS (3
above). As in tenancy agreements (6 above), they
provide a means of protecting the interests of this third party.
Recent revisions of accreditation schemes in Leeds, for instance,
both the Council's Leeds Landlords Accreditation Scheme and the
Unipol Code, have involved community representatives in the scheme
reviews, and both have adopted provisions relating to community
concerns, similar to those noted above.
9 The National HMO Lobby welcomes the consultation
on the Rugg Review. The Lobby would be pleased to contribute to
any of the appropriate 'task and finish' groups mentioned on p33.
National HMO Lobby, 6 August 2009
National HMO Lobby
email: hmolobby@hotmail.com
website: www.hmolobby.org.uk
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