A Strong Voice for Croydon Central - Gavin Barwell MP
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If you rent your home from a private landlord, it looks like our new Labour Council is about to put your rent up by £200 a year
30/06/2014 12:52:00


Croydon Council is consulting on introducing a 'Selective Licensing' scheme for private rented accommodation. Despite the title, there’s nothing selective about it. Every private landlord in the borough would have to pay £200 a year to the Council for the privilege of renting out a property. If they don’t, they could be liable to a fine of up to £20,000.

It doesn’t take a genius to work out what will happen if this scheme goes ahead: landlords who make the payment will simply pass the cost on to their tenants. Lest I be accused of scaremongering, the Council admits this, though the admission is buried 19 pages into its report (“tenants may...be impacted by an increase in their housing costs as landlords seek to pass on some or all of the costs of licensing through higher rent levels”). At a national level, the Labour Party is arguing for the re-introduction of controls to stop rents increasing (a policy which, like many of Ed Miliband’s ideas, is superficially attractive, but which evidence from around the world shows would inevitably lead to fewer homes to rent and therefore higher rents in the medium term), but locally Croydon Labour Party is pursuing a policy which it admits will increase rents. Go figure.

So why is our Labour Council doing this?

Well, it gives two reasons.

First, it says it wants to reduce flytipping and other forms of anti-social behaviour - a laudable aim. It claims that these problems are “commonly associated with poorly managed, overcrowded and low quality private rented accommodation”. Even if this is true, it would suggest that the Council should be doing something about poorly managed, overcrowded and low quality private rented accommodation, not taxing the whole sector. And it is very difficult to judge from the Council’s report whether it is true - little evidence is provided and what is said undermines rather than supports this claim (for example, the report says the private rented sector in the borough is growing rapidly but most forms of anti-social behaviour are declining and it also includes data which suggests that there is little correlation between the size of the private rented sector in different parts of the borough and the levels of anti-social behaviour in those areas).

Second, the Council says it wants to improve the quality of the housing in the private rented sector - another laudable aim. But again, the evidence in its report, both from within Croydon and from other London boroughs that have introduced Selective Licensing, suggests that most properties in the sector are in a reasonable state of repair. There are over 30,000 households in Croydon living in private rented accommodation: last year, the Council received 1,371 complaints (some households probably made multiple complaints so the number of properties complained about is probably lower than that, but set against that there are undoubtedly some tenants who don’t complain because their landlord makes it clear that they will evict them if they do). The London Borough of Newham has introduced Selective Licensing and registered 20,500 landlords, but has so far only banned 18, prosecuted 243 and cautioned 136.

In other words, all the evidence suggests that it is a minority of landlords that are causing the problem, not the whole sector. So why is our Labour Council taxing all landlords right across the borough (a tax which law-abiding landlords will pay but those causing the problems will try to avoid), rather than using powers it already has to take action against those landlords who are not maintaining and managing their properties properly?

Answer: because this tax is predicted to raise over £4.5 million, much of which will fund enforcement action the Council is already taken. It is a classic Labour stealth tax. It goes without saying that there was no mention of it in Labour’s manifesto.

If you want to increase Council spending, you should have the honesty to make the case for higher Council Tax bills. To introduce a tax on landlords which you know is going to lead to some of the most vulnerable people in society facing even higher rents is beneath contempt.

UPDATE: I found out last night that the Government is currently consulting on whether it should stop councils from introducing borough-wide Selective Licensing schemes. It is surprising to say the least that the Council's report made no mention of this.

You can read the Government's consultation paper here (pages 17-18) but this is the key section:

"A major drawback of licensing is that it impacts on all landlords and places additional burdens on reputable landlords who are already fully compliant with their obligations....The majority of landlords provide a good service and the Government does not want to impose unnecessary additional costs on them or tenants who may see their rents rise as landlord costs rise...The Government does not support the use of licensing across an entire local authority area. Such an approach is disproportionate...we believe that it goes against the policy intention of the original legislation (Housing Act 2004) which was designed to tackle problems in specific and strictly defined parts of a local authority area."

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Readers' Comments

On 01/07/2014 08:39:00 David Beard wrote:
What else would you expect from a Labour administration? They can't increase the Council Tax for two years so have to find another way to raise money to waste.
On 01/07/2014 08:58:00 David Beard wrote:
and another thing - a proper Council Tax would be spread fairly over the whole population of the borough whereas taxing landlords (who will inevitably pass the whole cost on to their tenants thereby not paying a penny) will be born by a limited population who are probably already financially strapped.

And Labour is supposed to be for the working class. Seems more like Animal Farm to me - all are equal, some are more equal than others!

On 01/07/2014 11:53:00 Mandy Thomson wrote:
I agree with everything you've said in your blog. However, the DCLG consultation report you've linked to states, "We have provided over £4m to a number of local authorities who bid for funds to help them tackle acute and complex problems with the small minority of rogue landlords in their area. This money will be used to build on the Government’s ongoing success in tackling ‘beds in sheds’ Backed by £2.6 million government funding, this initiative has resulted in the discovery of more than 900 illegally rented outbuildings and overcrowded homes since 2011. Action is now being taken against the owners." so the question is, why don't Croydon Council simply bid for those funds, or am I missing something... Having said that, I've read one account that suggested the licensing fee could be as high as £1000 per property, which would surely make it the highest in the country?
On 01/07/2014 23:52:00 Jim wrote:
Yep you are spot on. I'm a private landlord with 5 tenants, one for 20 years. We all get along fine and sometimes go out socially. We would resent £200 being taken out of "our pot" (however it is paid for). What, precisely, is the service we get for this? Is it a fine for something that we're presumed to be doing wrong?

But I would observe that the Conservatives did nothing to reverse HMO licensing. Same idea - busy body public officials taken money out of the sector and doing nothing in return. Rogue landlords simply don't register in the first place. In our case, box ticking busybodies in that posh new building will sometimes demand a gas safety certificate so I email them a scan. Easy to fake of course, but they don't care. They can tick their box, think they've done a day's work and probably "saved vulnerable people from being gassed by nasty landlords". They get their bloated pensions anyway.

So yep, it's all wrong. But pots and kettles spring to mind.

On 21/08/2014 17:37:00 Louise Pepperall wrote:
Im intrigued to know, what happens to the ones who can't afford the rent increase? where do we live? Not all are fit enough to work and not all employers are prepared to pay the liability employee support insurance. I am epileptic with other disabilities so have not managed to get a job, or council, where will I live? I live in private with a rogue landlord who won't even repair the boiler along with thousands of other people.

Yes the borough needs to control fly tipping, but what about controlling immigration? Fly tipping is African culture, why not control that first instead of picking on white british disabled....

On 06/10/2014 13:32:00 Robert Mac Corgarrt wrote:
You are right on the money, a stealth tax by any other name would still give off a wretched stench.

If ASB is evident a Local Authority has an obligation to deal with it...and all the necessary powers to boot.

If privately rented accommodation is unfit for habitation any Local Authority has the necessary power to command repair or rectify the problem.

Why can't Croydon Council do the right thing...how can you help me to stop them?






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