The Housing, Economy and Business Committee convened to discuss key housing and regulatory matters, including approving an additional licensing scheme for Houses in Multiple Occupation (HMOs) and converting shared ownership properties to affordable rent. The committee also noted a report on the positive outcome of a Regulator of Social Housing inspection.

HMO Additional Licensing Scheme Approved

The committee voted to approve the implementation of an additional licensing scheme for HMOs across the borough. Adam Lucas, a team leader in the residential enforcement team, introduced the proposal, explaining that it aims to regulate smaller HMOs not covered by mandatory licensing, addressing issues identified in a recent House Conditions Survey such as poor property conditions and inadequate management standards.

Councillor Ed Parsley voiced his support, drawing on his experience of living near HMOs for 27 years, and asked how the licensing regime would interact with the recently introduced Article 4 directive¹. Fiona Means, Group Manager for Regulatory Services, clarified that planning permission is now required for a property to become an HMO due to Article 4, and the licensing scheme will regulate the standards of existing and new HMOs.

Councillor Wendy Clark raised concerns about enforcement, emphasising the need for adequate resources to ensure compliance across the borough. Adam Lucas responded that the licensing fee would cover administration, inspection, and enforcement costs, and that the council would work with other departments to identify unlicensed properties. He also mentioned the use of civil penalty notices, which can be up to £40,000 for non-compliance, with the funds ring-fenced for housing enforcement.

Councillor Steve Alvarez expressed scepticism about the effectiveness of HMO licensing, saying:

I just, I see it as it's, the council pretending to be strict on HMO licenses and the HMOs. And the bad ones are just going to pretend to stick to the rules, you know, if you pretend they're going to pretend, no one's going to do it because there's no enforcement.

He also raised a specific case of alleged fraudulent activity related to an HMO, but Councillor Jake Short, Chair of the National Economy and Business Committee, intervened, stating that individual cases should not be discussed in the meeting, particularly if an investigation is ongoing.

Other points raised during the discussion included:

• Minimum room sizes for HMOs. The council's standard is 10 square metres, while the statutory minimum is 6.5 square metres.
• A review of the scheme will be conducted within two to three years of implementation, with a full consultation required every five years, as required by legislation.
• Accredited landlords who are part of the London Landlord Accreditation Scheme or the National Landlords Association may receive a discount on the licensing fee.
• Councillor Richard Choi raised concerns about the cost of the license being passed on to tenants, but Adam Lucas said that the licensing fee is £285 per letting room for the five-year license, which is negligible when spread out over the five years.
• The definition of a fit and proper person for landlords, which primarily relates to unspent convictions for certain crimes.
• The process for inspecting properties and addressing substandard conditions, including the use of improvement notices.
• Councillor David Hicks raised the issue of planning officers not having standards to assess HMO applications, and Spencer Palmer, strategic director of environmental housing neighbourhoods, responded that the council is aligning planning and licensing processes as much as possible.
• The process for dealing with existing HMOs that do not meet licensing standards, which may include temporary exception notices or, ultimately, closure.
• Councillor Ed Parsley asked about enforcement actions, including management orders, where the council takes over the running of an HMO.
• Councillor Wendy Clark asked about anti-social behaviour hotspots in Cheam, Cushel, Central and Roundshaw, and whether they are due to a higher concentration of HMOs in those areas.

Regulator of Social Housing Outcome of Inspection

The committee noted the outcome of a recent inspection by the Regulator of Social Housing, in which Sutton Council was awarded a C1 rating, the highest possible judgment for compliance with consumer standards. Lynna Rosler presented the report, highlighting positive feedback on governance, health and safety standards, stock conditions data, and proactive work on damp and mould. The inspectors also commended the collaboration with residents, including the Sutton Federation of Tenants and Residents Association and the Residents Review Group.

Councillor David Hicks thanked Steve Tucker for improving the organisation's responsiveness to tenants and leaseholders. Councillor Ed Parsley echoed this, thanking everyone involved in the preparations for the inspection.

Councillor Steve Alvarez raised concerns about the quality of workmanship and repairs in some properties, but Steve Tucker responded that the repairs service was singled out for praise by the regulator, particularly in relation to damp and mould complaints. He acknowledged that mistakes can happen, but the council has plans in place to address them.

Councillor Richard Choi asked about action plans for addressing anti-social behaviour and improving complaint response and repair timescales. Steve Tucker said that performance in these areas has already improved, but it takes time to see results.

Councillor Ruth Dombey congratulated everyone involved and emphasised the importance of sharing good practice with other councils. Councillor Wendy Clark requested an action plan to show how the council will continue to improve its services.

Beech Tree Place Conversion to Fully Rented Scheme

The committee approved a proposal to change the tenure of 35 homes in Block D at Beech Tree Place to affordable rent, instead of shared ownership. Adam Tucker explained that this decision was driven by the need to increase the supply of rented accommodation to address the temporary accommodation crisis. He also noted that the change would result in financial benefits for the council.

Councillor Lisa Webster supported the proposal and asked whether it would affect other schemes in the pipeline. Adam Tucker confirmed that the council is actively considering adjusting the mix of tenures in future developments to match the needs of residents.

Councillor David Hicks raised concerns about the higher standard of the properties and how they would be allocated. He asked whether there would be a differential in rental costs and how the council would ensure fairness in allocating the properties. Adam Tucker responded that rents are governed by the GLA and are set at London affordable rent levels. He also said that the council would work closely with the allocations team to ensure the properties are allocated fairly, taking into account the needs of residents with medical needs who may benefit from the en-suite facilities.

Councillor Richard Choi asked about the financial risks associated with interest rate rises and whether the additional borrowing required would be sustainable. Adam Tucker said that scenario testing is conducted through the HRA business plan, and that the proposal is financially viable for the council.

Councillor Steve Alvarez referred to a previous decision by the Urgency Committee in August to seek additional grant funding to convert the scheme to a 100% rented scheme. He noted that the funding application was rejected.

Councillor Wendy Clark suggested that the properties with en-suites could be prioritised for people with medical needs.