Improving the private rented sector: Sunderland City Council

Strategies for the private rented sector focus on improving the quality of the stock, tackling unprofessional landlords and improving stock condition of individual properties. 


Key points

  • Tackling issues in the private rented sector is part of a broader neighbourhood renewal strategy.
  • Adoption of a multi-disciplinary approach for addressing issues in the private rented sector.
  • Importance of a detailed private sector enforcement housing policy that is regularly updated.
  • Clear approach/method for dealing with individual cases of unsatisfactory landlord behaviour. 

Introduction

In 2019 Sunderland City Council, after a successful funding bid to the MHCLG, commissioned BRE to undertake an integrated dwelling level housing stock modelling survey. This was to help prioritise work in relation to tackling issues associated with neighbourhood decline that elected members were bringing to officers.

The BRE survey identified that there are 130,013 dwellings in Sunderland of which:

  • 47 per cent are owner occupied
  • 26 per cent are private rented
  • 27 per cent are social rented.

The national average for private rented stock is 19 per cent. Over half of the relatively small student population live in the private rented sector close to the university. It is estimated that only about 1.5 per cent of the stock is an HMO – again a relatively low figure, but it is concentrated in five wards. Much of the private rented stock consists of small terraced properties known locally as ‘Wearside Cottages’.   

In some areas of Sunderland there is a significant issue of neighbourhood decline. The demise of the national housing market renewal strategy in 2010/11 contributed to a concentration of economically and socially disadvantaged households in some neighbourhoods along with a growing proportion of private rented houses bought by buy-to-let landlords. In these areas a property can remain vacant for a considerable period. It is these empty properties, which have often been purchased by landlords who do not live in the area and as such have limited knowledge of the local housing market.

The properties are frequently bought at auction at low prices (eg £25,000-£35,000) and potentially could provide high yields. The proportion of empty homes across the city is at 2.2 per cent, which is below the national average at three per cent of the stock, but higher in some discrete areas of the city. These neighbourhoods suffer from relatively high levels of anti-social behaviour, fly-tipping, litter etc. Action to tackle issues in the private rented sector need to be seen as part of a broader strategy on neighbourhood renewal.     

Private sector rents are considerably greater than the local housing allowance rates especially for people under 35 years of age. This difficulty is compounded by the rates being significantly higher in adjoining local authority areas such as Newcastle-upon-Tyne and South Tyneside. 


Policy

Strategies for the private rented sector focus on improving the quality of the stock, tackling unprofessional landlords and improving stock condition of individual properties. 

The housing strategy has as one of its key themes ‘making better use of existing housing and improving neighbourhoods’. Aims include reducing the number of empty properties, intervening in priority areas of housing decline and raising standards in both the owner occupied and private rented sectors.

A new private rented housing enforcement policy was brought before Cabinet in June 2019 to consolidate several changes the government has made to how the private rented sector is regulated. Due to the raft of changes on how the private rented sector is regulated, the new private rented sector enforcement policy allows for regular updates to keep in line and up to date with changes in national regulations through delegated powers (see below).  

The recently adopted local plan is clear in relation to policy on purpose-built student accommodation which will be encouraged in appropriate locations where it is of a high standard. There is also a planning policy in place to limit the number of HMOs granted planning permission in wards of the city that have been identified to already have an over-concentration of HMOs. Therefore, planning permission for new HMOs will only be supported where it has no detrimental effects on local amenities and where adequate provision is made for parking, refuse collection etc. 

There is a strong corporate focus on neighbourhood renewal. It centres on initially working with local communities on feasibility studies to tackle issues associated with private rented housing, vacant sites, fly-tipping, litter and anti-social behaviour. In 2019/20, for instance, consultation work commenced with residents in part of Hetton Downs.  

From an organisational perspective, over the last 12 months, the council has been going through a cultural change process to ensure the development of a multi-disciplinary approach to address the issues in the private rented sector. Building capacity in terms of expertise and resources is a fundamental requirement that is now being implemented. 


Working with landlords and tenants

The housing strategy states that the ‘most important relationship is between a landlord and tenant, with council intervention as a last resort’. Nevertheless, an important aspect of the role of the local authority is to facilitate better relationships between landlords/lettings agents and tenants through advice, education and training especially in relation to the rights and responsibilities of all parties. Often the issue is not about bad landlords or poorly behaving tenants, but instead there is a lack of knowledge of the regulations by all parties.   

The council has been successful in gaining funding, again from MHCLG, to develop paper light and smart ways of working. In relation to tenants, part of these developments is in online reporting of privately rented issues, such as disrepair and waste. These are being trialled at present and hope to go live later in 2020.

It will enable tenants to report issues directly to the local authority and allow officers to deal with issues in the field. In addition, training is being undertaken with the university students’ union to help overcome the lack of knowledge about the private rented sector among students, especially those from overseas, who are sometimes encouraged by letting agents to agree a tenancy including paying a deposit without viewing the property or understanding the implications.  


Enforcement

As has already been noted, the council has an up-to-date detailed enforcement strategy that sets out the principles and the possible wide range of actions open to the local authority. The focus is on landlords that are operating in an unsatisfactory manner because of either a lack of knowledge or, more usually, a refusal to meet good standards. It is important to note that most landlords willingly adhere to requirements and work with the council and other stakeholders.

The approach is based on a four-stage model – proactively identifying (wherever possible) cases where intervention is required. Where the landlord has no previous poor track record with the council, informal action based on encouraging landlords to take the required measures is taken initially. Formal enforcement using regulatory powers by way of various legal notices is used as a last resort or, for persistent offenders, the use of civil penalties and prosecution.

It operates on a case-by-case basis that involves identifying the most appropriate types of action to address the issues. There is ‘no single best fit approach’. This is because issues could include illegal evictions, harassment of existing tenants, poor property maintenance, unsatisfactory arrangements over refuse collection etc.

The council maintains a watching brief over the possibility of additional HMO licensing and selective licensing. Currently, it is felt that these are not the most appropriate means of addressing the broader neighbourhood renewal agenda issues. All other options are currently being looked at to address matters of concern in some of the discrete areas including proactive property inspection, regular environmental amenity patrols, use of anti-social behaviour powers, council-backed landlord accreditation scheme and tenant training. Should these efforts prove not to be successful in combating the neighbourhood decline then licencing would be considered.