Fury as Government scraps Liverpool PRS licensing scheme

The Government has scrapped a flagship city-wide licensing scheme in Liverpool despite huge local support and improvements in private housing standards.

The Ministry of Housing, Communities and Local Government (MHCLG) refused to renew the licence for the scheme but has not explained why.

During the scheme’s five-year lifespan, 70% of properties were found in breach of licence conditions – including 3,500 category 1 and 2 hazards.

More than 2,500 legal and fixed penalty notices were issued, and almost 250 landlords prosecuted. Liverpool was responsible for the majority of the 460% rise in national prosecutions between 2012 and 2018.

The scheme is backed by most local residents, Merseyside Police and Mersey Fire and Rescue Service, which has said the decision will risk lives.

As part of the scheme, collaborative working arrangements were set up with organisations in the private rented sector (PRS) including Property Mark, the Residential Landlords Association (RLA) and the National Approved Letting Scheme.

Liverpool Mayor Joe Anderson is said to be furious and has written to MHCLG to demand an explanation and threatened possible legal action if they refuse to co-operate by a certain deadline – which passed on Monday.

Anderson said Liverpool had faced some of the worst funding cuts in the county of £436 million since 2010.

The Government’s decision means the scheme has to wrap up by the end of March with a loss of up to 60 jobs, leaving just 13 staff for private housing in a city with almost half a million people. The PRS comprises half of all housing in Liverpool.

Private sector housing manager Louise Connelly has been left to pick up the pieces. She said: “Now we have to sit on our hands. Things will go backwards – but we do have an increase in HMOs, which we will continue to robustly regulate.

“All the issues regarding the PRS will now continue largely under the radar as we return to a reactive service that will have much less impact, which will be awful for tenants, the reputation of the city and therefore business and investment.”

She added: “In terms of demand for the PRS, we believe there is an acute low demand issue across the city. Liverpool has the opposite problem of overcrowding like cities such as London, and has pockets of deprivation and antisocial behaviour across the city that push down property prices, driving owner-occupiers out or trapping them so they can’t move, and attracting private landlords, particularly HMO landlords.

“That is why having a well managed and properly regulated PRS in Liverpool is so important and licensing is a small piece of the jigsaw designed in line with our strategic policies and innovative and ground breaking work to start to address the drivers behind low demand in Liverpool.”

The city has launched some creative schemes to address this such as ‘homes for a pound’ where tenants renovate a property in a downtrodden area and turn it into their home. “We want Liverpool to be a place where people want to live not just commute into for work,” said Connelly.

She added that the sort of intelligence the scheme had gathered allowed them to tackle the very worst criminal landlords who intimidate tenants, preventing them speaking out.

Connelly added that the larger workforce has also allowed her department to do more joint working, and develop closer ties with other council services so that they were able to intervene when an elderly and vulnerable tenant living in terrible conditions was being forced out of his home of 30 years for complaining.

This case was so serious it resulted in the prosecution of the landlord who was jailed for three months. “Without the licensing scheme, this would have been at the bottom of the pile. We just didn’t have the intelligence,” said Connelly.

She added that the scheme has had a lot of support from private landlords, and in particular managing agents. “If you’re trying to rent out a property next door to somewhere with very poor conditions no one is going to want to rent it. The scheme created a level playing field across the sector.

“Some managing agents told us it actually made their lives easier as they could turn round to a potential client and refuse to manage the property unless they brought it up to compliance. It also helped with antisocial behaviour as landlords knew they couldn’t ignore tenants behaving like this, as we would step in, and tenants behaving in this way learned to moderate their behaviour.”

MHCLG asked Liverpool to host a national conference last year for other councils on tackling ACM cladding post-Grenfell because of the positive remedial action, the council had already taken. But much of this was down to having a strong housing department argued Connelly.

Some of the intelligence required by the government on ACM cladding has been collated either through the scheme, or by strategic joint working so that officers on routine inspections can also gather information about the cladding.

Without the licensing scheme, and if officers had to be sent out specifically and only to gather this information, it would cost in the region of £100,000. With the scheme gone, she said, it will be a struggle to meet this statutory requirement.

A first licence cost £412, subsequent licences £350, and the council operated a co-regulation scheme – in association with NALS, Property Mark, and the RLA – where the licence fee was halved.

“It was self-funding and all ring-fenced,” said Connelly. “Over five years it’s about 60p a month [under the co-regulation scheme] to deliver all of that. It is ridiculous, you probably pay more for a TV licence. It isn’t a lot of money to be a compliant landlord, and it even makes good landlords' job's easier.”

Connelly added: “Despite this setback, Liverpool City Council is committed to continue to drive up the standards of the PRS and will continue to take the strongest enforcement action against those landlords who fail to meet the legal requirements.”