The private rented sector is the major tenure in the borough with over 40 per cent of households (53,000 households). It has more than doubled since 2003.
Key points
- Private rented sector is the largest tenure in the borough.
- Focus on specific market segments where there are the most serious issues
- Emergence of new issues such as short-term lettings.
- Adoption of a holistic multi-disciplinary approach on improving landlord-tenant relations and enforcement.
- Enabling and facilitating other stakeholders to play an active role in improving private renting.
- Making full use of MHCLG funding opportunities to address priority issues.
- Working with London-wide partners such as London Councils and the Mayor of London.
Introduction
Tower Hamlets has one of the fastest growing, youngest and diverse populations in the country. It has doubled in 30 years to 308,000 in 2017 and is expected to reach 365,000 by 2027. Over 45 per cent of residents are aged 20-39 years of age and 43 per cent were born outside of the UK.
The private rented sector is the major tenure in the borough with over 40 per cent of households (53,000 households). It has more than doubled since 2003. The evidence base for the local housing strategy identifies four market segments, with the council focussing its activities on the second and third segments:
- high end new build eg build to rent schemes
- HMOs which can be sub-divided into ex-right-to-buy family homes, ex-right to buy properties used for shared housing by young people and for student lets – this segment has the highest level of disrepair and hazards failure and includes up to 15,000 former right to buy properties
- family homes let through an assured shorthold tenancy – traditionally, these have housed households that have been assisted by the council, but because of welfare changes and demand from young professionals, landlords are moving away from housing low income households
- residual segment comprising Rent Act, 1977, tenancies which continues to decline.
Since this evidence-base was prepared in 2016, other issues have emerged such as the growth of short-term lets through companies such as Airbnb. It is estimated that Tower Hamlets has the second largest amount of this type of accommodation of all London boroughs.
In addition, the student housing market continues to grow. It is estimated that there are 35,000 students living in the borough and purpose-built university and private institutional accommodation has not matched demand.
Affordability is a major issue as median rents do not reflect local housing allowance rates. For example, median rents for shared accommodation in an HMO is £147 per week compared to a local housing allowance rate of £104 per week.
Policy
The housing strategy incorporates a commitment to raise private rented housing standards. Actions that are now being implemented centre on reviewing licensing schemes, enhanced support for landlords to improve quality and promoting tenant awareness.
The local plan was adopted in January 2020 and includes a policy on ‘housing with shared facilities’ ie HMOs. Schemes will be supported where they meet an identified need, do not result in the loss of large family housing, are at a high transport- accessible location, have no detrimental impact on local amenities and meet appropriate housing standards.
The ‘place directorate’ is responsible for policies and delivery affecting the private rented sector and it covers housing advice, environmental health, procurement of accommodation and trading standards – with the latter focussing on the activities of lettings agents. Although based in different council offices, there are regular meetings between the teams every six weeks that cover intelligence on, for instance, rogue landlords.
The council works closely with the Greater London Authority/Mayor of London and London Councils. For instance, it is collaborating over a response to the growth of short-term lettings including lobbying for further policy changes such as mandatory licensing. Issues include the impact on the supply of family housing, fire safety, community cohesion and nuisance (eg noise, anti-social behaviour and litter).
Other emerging issues that are being investigated include:
- obligations of large construction contractors to their employees in respect of adequate accommodation, who are often migrants from the EU or overseas
- rent-to-rent schemes where a tenant rents a property and then sublets rooms (including converting lounges and dining rooms to additional bedrooms without permission) to as many people as possible
- investigating fire safety issues of tall buildings that provide student accommodation.
Working with landlords and tenants
The council is working to enhance the relationship between landlords, lettings agents and tenants, for instance, through:
- London-wide landlord accreditation scheme that is based on the principle that properties will be better maintained and managed through improved landlord awareness and knowledge
- Landlord and letting agents’ forums that includes training on regulatory updates, fire safety and short-term lettings
- Homefinder service that includes a rent guarantee scheme and a non-refundable cash payment for council-vetted nominations for assured shorthold tenancies
- Private renters charter that is backed by a wide range of organisations, including, Generation Rent and the Residential Landlords Association as well as being supported/promoted by voluntary sector bodies in Tower Hamlets
- Private sector advice service that is based in the housing options team
- collaborating with university accommodation services including student union advice centres to ensure that students are aware of their rights and responsibilities.
A strong theme underpinning these activities is the role of the council in facilitating the ability of other organisations to tackle issues in the private rented sector through, for example, housing rights training.
Enforcement
A recent successful prosecution has highlighted the issues involved in enforcement cases. It involved an unlicensed, overcrowded and dangerous HMO containing two bedrooms that was housing 33 people. People were being housed nightly based on cash for a bed space. The majority of occupants were migrants from other countries. This and other cases have also highlighted the issue of sham licences, as well as potential concerns over modern slavery.
A multi-disciplinary approach is, therefore, required in enforcement work eg:
- proactive data matching using a multiplicity of Council sources to identify criminal and illegal activity among some landlords
- research on the financial affairs of rogue landlords
- making use of the London-wide rogue landlord database
- holistic approach on interventions involving environmental health officers, trading standards staff and migrant support offices with the latter providing advice/support to tenants.
Funding through the MHCLG ‘controlling migration fund’ has been significant in taking forward these initiatives.
The council operates a selective licensing scheme that is due for renewal in 2021 covering Whitechapel and Spitalfields. It is an area with a high transient population and very high levels of private renting. Research is being undertaken on its effectiveness including data on the success of enforcement action. This will influence whether the local authority seeks its renewal and adopts selective licensing elsewhere in the borough.