Agenda for Scrutiny panel on the private rented sector on Friday, 23rd January, 2015, 11.00am
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Agenda and draft minutes
Venue: Council Chamber, Hove Town Hall. View directions
There were no declarations of interest.
Minutes of the previous meeting
Minutes of the previous meetings to follow.
The draft minutes were agreed.
The witnesses will include:
Brighton Students Union: Candice Armah (President)
Brighton University: Sabina Wagner (Assistant Head of Accommodation Services)
University of Sussex: Charles Dudley (Director of Residential and Campus Services) and Dean Spears, (Housing Services Manager)
University of Sussex
University of Sussex Student Union: Abraham Baldry (President)
The Generation Rent Campaign: Seb Klier (Policy and Campaigns Manager)
Home Sweet Home: Chris Henry
Abraham Baldry (AB), President, University of Sussex Students’ Union
There were a number of points to celebrate in the Housing Strategy. It was important to address the problems in the private rented sector. From the perspective of the 40,000 students in the city, it was in crisis. The demand outstripped supply, the rents were amongst the highest in the country, and there were problems with letting agents.
The Students’ Union did a lot of research and produced the ‘Rate your Landlord’ report that looked at the experiences of students in the city. 25% said their experiences were good and 25% said their experiences were very negative of the private sector. These problems must be addressed. We needed better regulation of lettings agents and incentives for landlords to improve their stock. The Students’ Union opposed measures to make it more difficult to get houses, for example, the Article 4 Directive which restricted HMOs.
Q: when students report negative experiences, what were the key issues?
AB: they fell into three sections: before, during, and after. Before, the issues were around estate agents pressurising students into renting early, using scare tactics to say rent now or be homeless. In response, the Students’ Union ran a ‘Don’t rent yet’ campaign which ran until January. The main issues during renting were: high rent; the call response times for repairs; the standard of housing and health and safety, for example, very few students were shown the gas safety certificate. There were issues around the quality of housing stock, for example, mould was obvious and preventable. Accommodation should be fit for habitation and properly insulated and furnished. After the rental period, the main issue was deposits being withheld: sometimes there would appear to be a cosy relationship between the independence of the assessor of the inventory and the letting agents. 95% of students reported that they were required to pay a deposit and only 28% had their deposit returned in full; 43% had it partially returned; and 29% had their entire deposit taken. When in dispute, 59% who went into arbitration didn’t find it helpful.
Q: was there evidence that landlords were evicting students for ASB?
AB: Retaliatory evictions were an issue but not as a response to ASB but rather around raising issues around poor management. When students challenged letting agents about poor experiences, then there can be retaliatory evictions. This was a national issue. No particular experiences of ASB.
Q: how much of an issue was affordability?
AB: the average rent has been rising year on year for the last ten years. On average students pay £95.72/week. Post-graduates pay £102 per person per week, not including bills. This was higher than the national average. A key issue was that the student loan was not adjusted for higher rents – in London students get an extra £1,000. Some students find their loan doesn’t cover their rent.
Q: was this leading to over-crowding?
AB: On average there were 3 students per house for Sussex University students which suggest this wasn’t an issue. However, some houses do have a large number of people in a relatively small space so it can happen.
Q: there were around 4million people in chronic poverty in the private rented sector in 2003. What are your views regarding this?
AB: students as a group on a low income couldn’t afford to pay rent and live. There was a real need to address this macro problem. Something had to change.
Q: did the Students’ Union endorse certain letting agents?
AB: Sussex University ran an ethical letting agency. It didn’t charge fees (which can be £200-£300 per person) and it offered de-facto accreditation. They were exploring the possibility of an accreditation scheme. The ‘Rate your Landlord’ research also had rankings for estate agents as good/bad according to students.
‘Movem’ was a website that acts like a ‘trip advisor’ for landlords. The Students’ Union were looking at working with Movem.
Students loved being in Brighton and they have a lot to give both economically and socially. Although students don’t pay Council Tax, B&HCC received an allowance of around £6.25m in 2014 from central Government.
Charles Dudley, Director of Residential and Campus Services (CD) and Dean Spears, Housing Services Manager, University of Sussex (DS)
CD: the University of Sussex has had a Housing Strategy since 1989. They had acquired and built new properties and had created more than 2,100 bed spaces in the past 6 years, the majority on the Falmer campus. There was a great demand for purpose-built accommodation: 1,105 bed-spaces in accommodation on campus and more was planned. Students liked purpose-built accommodation because they wanted high standard accommodation and very good IT – they wanted study areas and 13amp power supplies. The University held workshops with students returning after their 1st year: 100% said they would like the option of returning to University managed, nominated or Headleased student accommodation. This was a key driver for the Housing Strategy. The University had grown over the years but this had been matched by housing development. They guaranteed to house all new students who required it: in addition to around 500 students annually who would otherwise be in the private rented sector. Around 19-20% per year didn’t require housing as they lived in the region. The University worked to help all the 1st year students to prepare them and gave advice when transitioning to the private sector for those who preferred not to apply for a place in University managed accommodation in their post first year of accommodation.
DS – in 2014 the University had 5,004 bed spaces that they managed, owned or head-leased. This figure had doubled over the last 10 years. They guaranteed accommodation to all 1st year students who wanted it (subject to certain conditions outlined in their housing guarantee). They were keen to make the best use of the campus. Returning students can also be housed in the 5,004 bed spaces subject to availability: last year 530 of these were returning students and the year before, 500 were returning students, equating to approximately 100 less properties being occupied by Sussex students in the private sector annually. The University had also head-leases properties and in 2014 they had 271 bed-spaces in over 50 properties. They leased properties from landlords and took responsibility for all maintenance etc. From September 2014 Abacus residence (on the London Road, former Co-op building) housed 300 Sussex students via a nominations agreement with The Student Housing Company who run the residence.
Generally it was usually older, mature and overseas students and whom were likely to have lived away from home before, who were in private rented accommodation. They were able to house the vast majority of Freshers in their own accommodation.
The private sector rented properties for 2015 were launched today (23 January 20150 for Sussex students looking for accommodation from September 2015. Landlords advertising with the University must comply with a code of standards. The University provided advice, housing talks on behaviour, about living in the community and had a property database website called ‘Sussex Student Pad’. There was an extensive support package available with at least £250,000 spent on residential welfare support including 100 residential advisors who were students who provided support. There were a number of new initiatives: they had around 6,000 hits per month on their website on advice on living in the community, and had arranged to talk to LATs in the key areas. They were providing a guide to all Sussex students in the private rented sector and asked letting agents to be involved to help disseminate the guide, along with other partners too, including the council and Sussex Students’ Union. They had produced a short film to encourage students in Years 2 and 3 to consider applying for a place in Sussex University accommodation rather than private rented accommodation. Research last year showed that there were more students on campus than ever before and, indeed more students living on campus than in the surrounding private rented accommodations with Sussex residents recorded in 2014/15 in the following wards being low, for example, Queens Park (6%); Hollingdean and Stanmer (5.3%); North Laine (11%); Mouslecoomb and Bevendean (10%). The University had a property management link, advice, support and guidance in all of these areas.
Q: what were the rental prices in the purpose built accommodation?
DS: there were 11 price ranges from £81/week up to £140/week. All accommodation was self-catering with all bills included and insurance and residential support.
AB: there was a range of accommodation off campus. The Students’ Union was concerned that the range of accommodation was maintained as there were plans to replace the Old East Slope building with more expensive accommodation. In the ‘Rate your landlord‘ report 31% said they went into the private rented accommodation. The Students’ Union welcomed a guarantee that students won’t be priced out of the market.
CD: there will be a range of accommodation when the East Slope residences were replaced. There were bursaries of up to £2,000/year to support First Generation Scholars and many used it to upgrade their accommodation preference to those with en-suite facilities and accommodate above standard. The majority of growth in students has been post-graduates – Sussex attracted a lot of 1 year Masters courses and PHD students. Often 20-24year olds stayed on as young professionals and they stayed in the same areas of the city.
Q: the council corporately supports the growth of accommodation but it wasn’t clear where the growth will end. How will this be capped?
CD: the long term strategy set a target of 18,000 students registered at Sussex by 2018. One reason was that in the past, the University didn’t grow when the others did and they needed to catch up. There was a study on the contribution the University makes to the city: we recognised the contribution we made to the economy but there were concerns about housing. Growth was matched by predictions - if there was no additional demand. It was very difficult to say what will happen going forward.
Q: what was your view on ‘Rate your landlord’?
DS: ‘Rate your landlord’ was an excellent resource and they referred to the report produced by the Sussex Students’ Union to give advice to their students as it included the past experiences of living in the private rented sector from former Sussex students.
Chris Henry (CH) Home Sweet Home (HSH)
CH: Home Sweet Home (HSH) was two years old and started with a group of people with problems in the rented market who came together. There had been lots of listening and talking to people from over the city (Hove, Portslade, Kemp Town) who have had the same problems. HSH had grown over the last 2 years and they had 2 years of feedback from the ground. There was a small core of issues: for example, problems with deposits and broken equipment. There was a general feeling that “the council lets landlords get away with it.” This was linked to the idea of the confusion over tenant’s rights and recourse when problems arise, and a lack of transparency – this was across all areas of council housing, lettings, and private renting. People were saying ‘what was the council’s role?’. People found the system opaque and didn’t know how to access help.
Lettings agents were a huge issue. One agent had a council accreditation badge in the window but was one of the worst landlords. HSH arranged a ‘clean up your act’ event to pressurise the company to meet then and talk about improving their customer service. Another big issue was poor quality accommodation – security and inadequate facilities was another common theme. There was confusion over who can resolve problems.
Revenge eviction was a tangible thing – there was a parliamentary debate on this recently and HSH pressurised the city’s MPs to attend and vote.
The solutions involved transparency and the idea of a robust scheme of providing information for people. There was a role for the council in this. This was linked to the idea of awareness of the role of housing officers, maintenance, how do prosecutions happen? There was a feeling that landlords got away with it and things were shrouded in mystery. There was a need for clarity and a clear pathway to enable people to get answers.
Q: were people made more vulnerable by the actions of letting agents?
CH: yes, including students. One area of vulnerability was a lack of security in doors and windows; another area was families who were in very small homes and had children with health issues.
Q: were people forced to keep moving house?
CH: the name Home Sweet Home came from the idea of adverts that showed lovely homes (for example at Christmas) but that wasn’t the reality for many in the city. There were interesting demographics: young professionals got stuck on the treadmill of moving from one property to the next as a result of letting agents fees and high costs; at the other end people were trapped and can’t move and were stuck in small, expensive flats they couldn’t afford to leave, for example, they didn’t have a deposit. In addition, people still needed a guarantor which caused problems.
Q: on the idea that ‘the council was letting landlords get away with it’ there weren’t many powers the council actually had.
CH: the phrase was one that expressed the sentiment we heard. It was about awareness and a lack of understanding of how much or how little the council could do. It needed to be made clear what the council actually could do.
Q: should we look to roll out a ‘rate your landlord’ scheme?
CH: something like the council’s food ratings ‘scores on the doors’ that served as a council accreditation scheme would be useful. Lettings agents should be transparent and say what the contract was, when deposits were returned, and when maintenance was done.
AB: there was an issue around letting agents who didn’t care. The agents who didn’t care needed to be tacked or there would always be around 24% of students in poor, expensive accommodation.
Q: we had some success with Article 4 but the council were facing a de-regulatory environment and budget savings. Should we be pursuing this further?
CH: there were licensing schemes in other councils that were sucessful. If a landlord needed a licence then the cost of this would make the scheme work and become self-financing. Licensing would raise standards and identify rogue landlords.
Q: had there been many changes in the market in the last 5 years?
CH: there had been lots of changes with more families renting and a lot of people in their 40s still renting. This was a major shift. 15 years ago a teacher would be able to buy a home, for example - this is no longer the case.
Candice Armah, President Brighton Students’ Union (CA)
CA - Brighton University had 5 campuses over 65miles in East Sussex, with the majority in Brighton. The University was not just growing in Brighton but also in Hastings. The Students’ Union had been lobbying landlords and letting agents and had been recording the issues raised. The main challenges facing students were: price; condition of accommodation; student loans insufficient; pressure to rent early; and not enough bigger houses. The average house had between 3 and 7 students in Brighton. Around 82% of eligible first year students were housed in student accommodation but there were still a large number in the private sector. Tenants’ rights were a big issue, particularly for first time renters. The Union had recently launched a ‘Tenants Rights Guide’. They were also working with the University on a ‘Don’t rent yet’ scheme. They also supported students to create their own house-hunting guide and a ‘Good Neighbour Guide’. Along with Home Sweet Home they were taking evidence on retaliatory evictions (Section 21 Notice to Quit) which was a big issue and they joined with Home Sweet Home to lobby parliament.
Many students chose to stay in the city with 35% in 2009 still living in the city which was one of the highest in the country. This provided a challenge – but also brought huge benefits.
Q: anecdotally PHD students in the city were in lower paid jobs. How does this translate in housing terms?
CA – Like many new graduates, it is likely that PHD students are doing low paid work in the city – this translates to them also being more likely to live in student houses because of rent costs. The high level of graduates in the city meant they were likely to get graduate-level jobs later than elsewhere, but they did get those jobs. Often it was easier to stay in a housing contract than move.
Q: how important was joint working in addressing the issues?
CA – joint working was key. Greater work was needed around integrated working. The Students Union had community organisers who explained the benefits of communication with others in the community and contributing to others’ lives.
Q: did students prefer purpose-built accommodation?
CA – there was a growing trend of student with families requesting purpose-built accommodation. Purpose-built accommodation can seem pricey when balanced against the cost of the private rented sector in the city. There was an issue around upfront costs and the costs of letting agents fees in the private sector. Students can be asked for 6 months rent upfront: last year the University agreed to be a guarantor for a small cohort of students.
Q: Article 4 regulates HMOs where there was a concentration of students: some streets were student streets. This was only a problem if there were issues around behaviour or rubbish.
CA – This was where a ‘meet your neighbours’ scheme is useful. If students lived further out and travel was affordable and reliable then they could fan out into cheaper areas. We recently negotiated the £3 bus ticket for students to travel through the city. This is only one small step towards alleviating pressures in areas with lots of HMOs and encouraging students to move further out – but more work needs to be done.
Q: did transport have the potential to help address the issues?
CA – potentially it means that students can live in other areas. Subsidised student travel could help. It was increasingly difficult to say honesty to people to come here when housing was unaffordable and the buses don’t turn up – it puts the University and the Students’ Union in a difficult situation.
CB – transport was key and an issue the University was also discussing. The Students’ Unions and Universities can work together – on this and on being good neighbours.
Sabina Wagner, Assistant Head of Accommodation Services, Brighton University (SW)
SW – the University provided 1,600 bedspaces in Brighton & Hove and were looking to build an additional 2,000 in the next five years. In addition they managed homes on lease arrangements. The University of Brighton’s accommodation strategy was under review, which was based on surveys of students. Their findings included that the majority of students wanted facilities such as WiFi, cleaning, shared common space with informal seating, TVs and American Fridges. They were aware that a significant percentage of ‘returners’ who wanted to live in the private rented sector.
One of the key areas of expansion was the growing campus in Hastings. While the university was spreading slightly away from Brighton, many of the issues were the same as those in the rest of Sussex.
Students were house searching now for places to live in September 2015, after they had only been living in Brighton & Hove since September 2014. So the University was providing the students with advice and support, including a Housing Fair today. House hunting events are also held later in the academic year and over summer to support students looking for accommodation.
The University managed a portfolio of homes for which students did not have to pay a fee or deposit and this presents a more affordable option for them. The students enter into a contract with the university as their landlord. There was a dedicated Housing Advice Service for students which provided the full range of help from minor issues to more serious issues where legal help may be sought. The University had a whole range of publications which related to students and housing issues.
There was a community liaison team and a dedicated Police Officer who worked with the University. There was also a team of people living and working in the Halls of residence to support students 24/7. There were also advice events to support students. Affordability was a key issue: there were signs that people were finding it difficult to meet their rent and energy payments. If people don’t use heating enough, there were related issues of mould and condensation.
Q: did you charge a fee for leasing properties? Do you lease on the outskirts of the city?
SW – a small amount was taken to cover staff costs in order for the scheme to be self-financing. The properties were within the boundaries of Brighton & Hove and no further than Portslade.
DS - the University of Sussex didn’t charge any fees and charged the same rent as their own properties. The standard room rate was £105 including bills and insurance. The criterion for leasing properties was that they were a 10 minute walk from a public transport along with detailed specifications about the condition of the property and required contents, including bring fully furnished to the University’s standards, above the council HMO requirements for example. The Headleasing scheme follows best practice.
Q: what was the impact of bills on affordability?
CB – the aim was for no surprises by encouraging budgeting. We also responded to energy initiatives such as ‘switch off’.
SW – 1st year students all had inclusive rent which may look expensive but included bills, Wi-fi, sports facilities, insurance etc.
Q: was there a problem with rent arrears in your leased properties?
DS – the University had a very supportive debt management team who took steps to minimise problems, including via advice, support and guidance to their students. There were approximately 20 ‘notices to quit’ per year and only 1 person taken to court in the past 3 years as all other cases were resolved beforehand.
SW: the University has a dedicated debt management team and Accommodation Services employ their own officer who supports students experiencing problems with paying their accommodation fees. In 2013/14, 2 notices to quit were served on students living in unihomes. No court action was required.
Q: what were the prevailing trends over the last 5 years?
SW – there has been a rise in international students and more PHD students or those with young families. Expectations were higher: with fees of £9,000 students were more discerning. Brighton was an expensive place to live. The University’s accommodation team had a key objective to raise standards for student accommodation in the city.
David Gibson – Living Rent (DG)
DG – the Living Rent campaign started around 1year ago with the idea that the Living Wage was great but is no good if someone can’t pay their rent. A campaign started and included such events as a bedroom in the street, and a petition signed by 2,500 people. The main thrust of the campaign was that rent was too high. The Living Rent campaign looked at the bigger picture: the housing market worked until de-regulation in 1988 with the loss of secure tenancy and rent regulation. Before 1988 the private rented sector was more affordable and there was more social housing. The vision of Living Rent was to push political parties to a consensus with a return to rent controls- that is fair rents levels, not just limits on increases as some are proposing large scale social housing, and secure tenancies.
The Living Rent campaign welcomed the Housing Committee’s response to their petition and the licensing of HMOs with improved fire safety, fuel efficiency and conditions. They would like to see this go further with the de-registration of landlords who did not meet the standards (as in the London Borough of Newham).
New council housing must be affordable: 80% is only affordable for some people. The council needs to do more and base rents on affordability not the market conditions. This was something that only the council could do – some low paid workers were living in vans as they couldn’t afford housing.
Discrimination against claimants was a problem with lots of properties not accessible to claimants. Other issues included insecurity, fear of reporting repairs and moving frequently.
There was a huge range of rents in the city and a register of ethical landlords would be helpful. Brighton & Hove could be the first living rent city – set up an inquiry or a commission to properly assess a living rent and to explore how it could be promoted on a voluntary basis
Q: what was the national picture?
DG – Brighton & Hove was one of the fourth or fifth most expensive city outside London.
Q: have you calculated a figure for living rent?
DG – a ballpark figure would be around £563 based on a number of the assumptions – it is around one third of the median take home income of people working in Brighton and Hove.
Q: what about private landlords who needed the rent to cover their mortgages?
DG – there were few landlords on such tight margins and many bought properties cheaply and have seen the rent and capital value of their properties increase markedly since they bought. Many are creaming off a large surplus from rent payers and in the case of many the tax payers who fund housing benefit. Proper rent controls were needed with a formula that linked rents with affordability. Some landlords want to be ethical and any fair rents could be phased in over several years
Q: how could an ethical landlord scheme work?
DG – there could be stars for good aspects such as security, affordable rents, transparency over charges, responsive repairs, flexibility etc. An accreditation scheme could be developed.
CA – the University of Bristol had a long running ethical letting agency.
DS –the University of Sussex letting agency has been very successful and sustained growth.
SW - the University of Brighton would support ethical awards – they have a code of standards in place.
Clive Gross (CG), East Sussex Community Co-ordinator, Generation Rent
CG opened by explaining that Generation Rent was formerly known as The National Private Tenants Organisation. There was a central team in London focussing on key issues and the national agenda, while federal campaigns were being run in a range of locations including Liverpool and Manchester. He would like to endorse much of what had been said by David Gibson previously in the meeting.
CG was both a renter and a landlord in Hastings, and had previously carried out these roles in Eastbourne. There were only a limited number of actions a local authority could do to intervene, but the council could set the renting culture for Brighton & Hove. The council could send out messages about how it believed that private renting should work in the city.
He believed that the private rented sector was too short term and there needed to be greater security of tenure like in Germany and Scandinavia; the people renting in Berlin’s rental market for instance all knew where they stood. The United Kingdom was property obsessed and increasingly investment in this had become the main alternative to pensions, leading to huge growth in accidental landlords. Some accidental landlords were good but many were unaware of their responsibilities and needed education. There were also professional landlords made up of large companies or individuals with a significant portfolio. It was too easy to be a bad landlord, especially when the demand for accommodation was so high.
Generation Rent felt there was the need for an ethical landlord and tenants’ scheme, which could also help those on benefits or who had poor rent records, into housing. There was the need to move to high standards in this sector, rather than specifying minimum standards for the stock. It was recognised that tenants may also need to be encouraged to ‘perform’ better too; in his experience in Hastings there were significant issues with rubbish dumping and fly tipping by tenants.
On average it cost around £500-£1,000 each time to move from one private rented home to another, which could be a huge additional cost when Assured Shorthold Tenancies (ASTs) may only last for 6 months.
StudentPad (a student accommodation search engine for the University of Brighton) and Sussex University showed that one could run ethical, social enterprise, models which did not place the burden purely on the tenant.
CG believed that the LB Newham selective licensing scheme seemed to work very well, particularly as it had been given additional resources for enforcement. He believed in ‘enforcement, enforcement, enforcement’ as it was vital that landlords did not feel they could get away with it. That BHCC needed to make landlords feel that they had to improve standards or be driven out of the market. The standards needed to be enforced rigorously and publically. He used to attend the social landlords forum about 18 months ago while manager of Brighton Independent Mediation Service.
CG thought that social tenants were increasingly being displaced into areas such as Newhaven, which were more affordable. Those who were driven to live in these areas tended not to buy into them and lost their existing networks. This kind of displacement could lead to social problems.
He wondered whether BHCC as the planning authority allowed homes to be turned into HMOs, which represented them being sub-divided into smaller units? The large majority of the city’s stock was Victorian and some landlords were trying to maximise their profits by ... view the full minutes text for item 13.
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