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Fuel Poverty and Houses in Multiple Occupation:Practitioners’ Views

FINAL REPORTProduced for DECC by National Energy Action working with Future Climate

28th March 2016

Contents1 Executive summary.........................................................................................................................3

2 Research questions and methodology............................................................................................7

3 What is an HMO? types and distribution........................................................................................8

3.1 How many HMOs are there and where are they?..........................................................................9

3.2 Who lives in HMOs........................................................................................................................11

3.3 The experience of cold in HMOs...................................................................................................13

4 Characteristics and energy features.............................................................................................16

4.1 Examples of typical HMOs............................................................................................................16

4.2 Energy efficiency problems in HMOs............................................................................................19

4.3 Paying for energy in HMOs...........................................................................................................20

5 Barriers to action on energy efficiency in HMOs...........................................................................22

6 Energy Performance Certificates and HMOs.................................................................................23

6.1 Requirement for EPCs at Point of Letting HMO Units...................................................................23

6.2 Methodology to be used in EPC assessments...............................................................................24

7 Council action to promote energy efficiency: enforcement and licensing....................................25

7.1 Introduction: enforcement of housing standards: the Housing Act 2004.....................................25

7.2 Examples of local authority published standards for HMOs.........................................................28

7.3 Mandatory, additional and selective licensing..............................................................................30

7.4 Standards applied in HMOs where councils are placing vulnerable/homeless people.................33

7.5 Challenges to effective enforcement activity in councils..............................................................34

8 Uptake of energy efficiency grants and financing in HMOs..........................................................35

9 Conclusions and policy recommendations....................................................................................36

Appendix 1 – Local Authority Housing Returns data on HMOs in England................................................42

Appendix 2 – Literature Review.................................................................................................................43

Appendix 3 - List of interviewees...............................................................................................................49

Fuel Poverty and HMOs: Practitioners’ Views 2

1 Executive summary

National Energy Action and Future Climate aimed to look in detail at the facts about fuel poverty and energy efficiency standards in Houses in Multiple Occupation (HMOs)1. In particular:

Is there a problem of fuel poverty (broadly defined as energy efficiency problems leading to cold and high bills) in HMOs?

Are HMOs more or less likely than other homes to be energy inefficient and, if so, what are the distinctive energy-related features and problems?

How is energy paid for in HMOs? How well are council action and national policies working to promote energy improvements in

HMOs? How could policies be adjusted to improve the energy efficiency of HMOs?

We surveyed 112 people working with HMOs - mostly council environmental health and housing officers, but also landlords and representatives of voluntary groups and local advice providers. We also looked at the available literature on HMOs and energy efficiency (building on a detailed literature review undertaken by Future Climate and University of Manchester for eaga Charitable Trust in 2014). We staged telephone and face-to-face interviews with HMO specialists for more detailed insight into the issues we found. The results have helped us establish perhaps the most comprehensive overview to date on fuel poverty and energy efficiency standards in HMOs.

For example, our survey respondents told us that energy efficiency problems (damp and uncomfortable/unhealthily low temperatures) are more prevalent in HMOs than in other types of homes. There are some distinct energy efficiency problems in HMOs – in particular old and expensive electric heating (many HMOs use direct electric heating for primary space heating) and uninsulated rooms in roofs which can be freezing in winter and far too hot in summer. Our respondents told us that fuel poverty was therefore a significant concern for HMOs residents in terms of cold and high bills:

1 We considered HMO as defined in 2004 Housing Act which includes private sector shared houses, flats, hostels and bedsit properties – any property lived in by three or more people in two or more households. This official definition of an HMO also includes poorly converted blocks of self-contained flats where more than a third of the flats are rented out – these are often referred to as Section 257 HMO after the section of the Housing Act where they are defined.


There is not a single HMO market. There is a market of decent quality HMOs for young professionals and better-off students (with references and deposits). However, HMOs are also the cheapest and most readily available housing option in our society and they are disproportionately occupied by vulnerable groups with little choice in the market. The HMOs occupied by vulnerable people are often cold. Shared houses and Section 257 HMOs are the most common types of HMOs, and respondents typically identify large Victorian terraces as the archetypal HMOs.

We asked respondents about how tenants pay for energy in HMOs. Mostly bills are included in rent but landlords’ sub-metering is still prevalent in some areas. Whether bills are included in rent or calculated on the basis of sub-metering there is a need for greater understanding about whether costs are being fairly passed on to tenants.

The primary barrier to action on cold HMOs is seen as the built form of these properties – these are often old, hard-to-treat properties and landlords are operating at the bottom of the housing market with little money to invest in upgrades to insulation, windows and heating. Being non-standard properties, our respondents told us that HMOs tend to miss out on energy efficiency funding programmes. The second reason for the failure to improve cold HMOs is the poorly functioning market – this is not a sector where tenants exercise market choice in the traditional sense.

It is in recognition of the poorly functioning market that larger HMOs are more heavily regulated than other homes in the private rented sector, having required mandatory licences since 2006. As our results in the full report show, licencing can drive higher levels of energy efficiency: it opens a dialogue with housing managers and all licensed properties must be approved as free from serious housing health and safety hazards including excess cold within five years of the licence being issued. Some councils choose to impose licence conditions linked to energy efficiency: for example, Norwich City Council requires robust insulation to current building regulations standards, including for rooms in roofs, and fully controllable storage heaters or gas heating. This is a licence condition for licenced HMOs but also applies to all HMOs in the city. But across the country, council standards can be very variable with many – probably most - councils making no explicit requirements for insulation, Energy Performance Certificate


(EPC) standards or affordable heating (all councils will require that heating is adequate – i.e. there is a system present that can heat the space to a liveable temperature regardless of cost).

As we show in the diagram below, there is no shortage of policy mechanisms that can impact on energy efficiency in HMOs. But the delivery of these policies is currently disjointed and very subject to local variation. As a result, we hope this report can help ensure existing policies can be made much more mutually reinforcing.

1.1 Policy recommendations

Extend mandatory licensing to a wider group of HMOs

Only one in eight HMOs is currently subject to mandatory licensing. The Department for Communities and Local Government (DCLG) have consulted on extending mandatory licensing to include two storey and S257 HMOs. We strongly support this. Our research showed that S257 HMOs are very prevalent. According to the English Housing Survey flats in converted houses are the coldest and least energy efficient house-type. By definition poorly converted, S257 HMOs are probably the coldest subset of this coldest part of the stock.

Set standards for cost-effective heating and insulation in HMOs, using national HMO regulations

Whether through guidance to councils or – preferably - revised national regulations DCLG can enable all councils to follow Norwich’s example in using licensing and locally published standards to require cost-effective (not just adequate) heating and basic levels of insulation in HMOs. National facilities and management standards for HMOs can be - and are - set under S65 and S234 of the 2004 Housing Act respectively.


Update HHSRS Operating Guidance

DCLG Housing Health and Safety Rating System (HHSRS) Operating Guidance has not been updated since the HHSRS system was launched a decade ago. With DCLG now focusing more on rogue landlords than ever before the HHSRS guidance should be reviewed. Within the revised Operating Guidance it should require environmental health officers to consider the cost of heating systems when checking for cold risks, and to recognise more explicitly that the lowest (F&G) EPC banded homes are likely to pose a category 1 excess cold hazard.

Make clear that EPCs are required at point of letting HMO units & clarify how EPCs should be produced for larger HMOs

DCLG guidance also needs to clearly require EPCs at point of letting HMO units. Currently the situation is confused: Whilst EPCs are not legally required in this circumstance, the Legal Director of the Residential Landlords Association is actively advising HMO landlords that they are. Requiring EPCs at point of letting HMO units will give tenants useful information on the warmth and cost of heating their home. It will also close a loophole that could limit impact of DECC’s 2018 minimum energy performance standards in the private rented sector (because without an EPC the regulations will not be triggered). There is also confusion about the technical methodology to be used when EPCs are produced for larger HMOs. DECC need to issue a clarification here.

Make sure that HMOs can be fully included in the next phase of ECO

DECC should work with Ofgem to ensure that the scoring methodology is in place to allow all types of HMO to qualify for support under the next phase of ECO.

Ensure PRS regulations do not undermine HHSRS excess cold enforcement

Finally, it is essential that PRS regulations introduced through the Energy Act 2011 do not undermine HHSRS enforcement in the coldest homes. DECC’s PRS regulations and the guidance must be explicit in referencing landlords’ existing responsibilities to ensure their homes are free of serious cold hazards, paying for such upgrades as may be required.

The Fuel Poverty Strategy states that – by 2020 – no fuel poor household will be living in a home rated F or G on an Energy Performance Certificate. Despite the difficult nature of this stock, the Government has the right statutory frameworks in place that can make that happen in HMOs, but adjustments need to be made to guidance and secondary regulations. Not making these adjustments will risk missing the “E” target in the segment of the housing market that accommodates some of the most vulnerable people.


2 Research questions and methodology

This study aimed to look in detail at the facts about fuel poverty and energy efficiency standards in HMOs:

Is there a problem of fuel poverty (broadly defined as energy efficiency problems leading to cold and high bills) in HMOs?

Are HMOs more or less likely than other homes to be energy inefficient and, if so, what are the distinctive energy-related features and problems?

How is energy paid for in HMOs? How well are council action and national policies working to promote energy improvements in

HMOs? How could policies be adjusted to improve the energy efficiency of HMOs?

The study covered England and Wales and consisted of three main elements:

A survey of 112 people with professional knowledge of HMOs, recruited through NEA’s network, the Chartered Institute of Environmental Health networks and the National HMO network (an independent group bringing together local authority officers, landlords and others interested in HMOs). Responses to the survey came from three main groups:

o Local authority staff (60% of responses) – with job titles indicating that they worked principally in environmental health and housing teams

o Landlords (13% of responses) – a mixture of private and social landlordso NGOs (28% of responses) – principally working at local level and including several

Citizens Advice Bureaux A literature review undertaken in January 2016 – this built on the HOME (HMOs and Energy

Efficiency) policy and literature review undertaken by Future Climate with University of Manchester for eaga Charitable Trust2 in 2014 - see Appendix 2.

A set of 12 follow up interviews with specialists and concerned organisations to investigate in more depth themes explored in the survey (see Appendix 3)

2 HOME: HMOs, energy efficiency and policy, Viitanen and Weatherall, 2014, eaga Charitable Trust. Available from: http://www.eagacharitabletrust.org/index.php/projects/item/houses-in-multiple-occupation-improving-policy-and-practice


3 What is an HMOs? Types and distribution

The 2004 Housing Act (“the Housing Act”) defines as an HMOs a property occupied by more than three people resident in two or more households3, sharing facilities; this includes both (a) dedicated bedsit or hostel accommodation and (b) unconverted family houses and flats that happen to be occupied by sharers. As well as shared accommodation, the Housing Act also identifies as HMOs poorly converted4

blocks of fully self-contained flats where more than a third of the flats are let in the private rented sector. These poorly converted flats are referred to as Section 257 HMOs after the section of the Housing Act where they are defined (while the more standard shared-house and bedsit HMOs are sometimes collectively called Section 254 HMOs). The Housing Act HMO definition excludes social housing and some dedicated student accommodation5.

An important distinction is between smaller HMOs and those HMOs that – under the Housing Act – require mandatory licenses. Any HMOs with over three storeys with more than five people resident in two or more households must be licensed by the local authority6. The government has recently consulted on extending the range of HMOs that require mandatory licenses to include a number of smaller property types7 (see Section 7.3 below).

The range of HMOs accommodation can therefore include:

Standard family homes – houses or flats – that happen to be shared by multiple households, these are referred to in the below as shared houses.

o Unconverted flats above or below business premises that are shared are sometimes identified as a specific type of HMOs because of a heightened fire risk and because they may be more likely to be shared than other types of flats8

Properties that have been built or converted specifically for occupation by multiple sharers – eg bedsits.

Hostels and lodging houses which are regarded as occupiers’ only or main residence.

3 Broadly a household consists of a single person living alone, a couple or a family though this – as with so much to do with HMOs – is also an area of legal complexity and sometimes dispute.

4 Poorly converted is defined as meaning that the conversion does not meet the standards of the 1991 Building Regulations which, for example, for the first time required significant acoustic and fire insulation between flats.

5 Our research did not consider illegal shared housing in domestic or non-domestic buildings (because the primary policy solution is to tackle the illegal occupation rather than condition and safety issues).

6 It also covers flats in multiple occupation above or below business premises, where the whole building is three storeys or more.

7 Extending mandatory licensing of Houses in Multiple Occupation (HMOs) and related reforms: A technical discussion document DCLG 2015 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/474408/151106_HMO_discussion_Doc_FINAL_for_publication.pdf

8 ibid


Poorly converted blocks of self-contained flats in buildings where more than a third of flats are rented on the private rented sector. We refer to these below as “poorly converted blocks of flats” or S257 HMOs.

3.1 How many HMOs are there and where are they?

The official data (Local Authority Housing Returns supplied to DLCG) show that England’s stock of HMOs has grown to 484,000 homes in 2014, up from 427,000 in 2011 – a rise of 13%9. In Wales there has been a fall of 8% in the same period, from 19,800 in 2011 to 18,200 in 201410. HMO figures should be treated with a high degree of caution – many of our respondents pointed out that the numbers of shared houses and S257 HMOs is extremely difficult to estimate.

Analysis of the Housing Returns undertaken as part of our literature review (see Appendix 1) shows that the large conurbations continue to have by far the largest numbers of HMOs, though HMOs are not particularly prevalent as proportions of the whole stock in some cities, for example Birmingham. Inner London Boroughs have very high absolute numbers and concentrations of HMOs; 41% of England’s shared housing stock is in the capital. Seaside towns have large numbers of HMOs. There are also three communities in East Anglia that have high concentrations of HMOs, probably as a result of an influx of EU migrant workers11.

There is no one single HMO market. The HOME report identifies the following distinct sub-markets for HMOs:

• A housing market with low supply of housing for people on low incomes – obliging many people on lower incomes to live in shared housing, including many in work, this being at its most acute in London;

• Demand for student housing in university towns;• High supply of large homes, particularly in coastal towns, coupled with weak demand – leading

to occupation by very low income residents.

9 Local Authority Housing Returns https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/445385/Local_Authority_Housing_Statistics_dataset_2013-14_rev_Mar15.xlsx

10 Stats Wales https://statswales.wales.gov.uk/Catalogue/Housing/Hazards-and-Licences/housesinmultipleoccupation-by-area

11 See HOME study for a more detailed consideration of different HMO sub-markets and regional and sub-regional trends.


https://statswales.wales.gov.uk/Catalogue/Housing/Hazards-and-Licences/housesinmultipleoccupation-by-area


https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/445385/Local_Authority_Housing_Statistics_dataset_2013-14_rev_Mar15.xlsx


These different markets can exist in the same area. An environmental health officer (EHO) in Norwich interviewed for this study told us how the majority of the town’s HMOs are smaller terraced houses occupied as shared houses, but there is a submarket of bedsits and poorly converted flats in larger converted house properties.

Chart 1 below shows how shared houses and poorly converted blocks of flats are identified by our respondents as the most prevalent types of HMO, though not all areas have S257 HMOs. It is noticeable that shared flats are thought to be more prevalent in business premises than in residential blocks: DCLG12 explain this because lease agreements in freehold blocks typically prohibit multi-occupancy. In line with the higher prevalence of shared houses and S257 HMOs, the vast majority of HMOs do not require mandatory licenses: LA Housing Returns estimate that only 12%13 of all HMOs require such licences.

Chart 1

12 DCLG, “Technical discussion document” (see footnote 5)

13 According to local authority Housing Returns, 59,650 mandatory licensable HMO in England, out of 483,000 total HMO. DCLG, Local Authority Housing Statistics dataset, England 2013-14

https://www.gov.uk/government/publications/completing-local-authority-housing-statistics-2013-to-2014-guidance-notes


Fifty-eight percent of respondents to our survey stated that the numbers of HMOs was rising in their area, 8% said numbers were falling. Respondents to our survey and interviewees identified that tending to increase the numbers of HMOs was high demand for housing and high housing cost driving people on lower incomes into shared accommodation. Many people emphasised that growth (and indeed issues) in HMOs should be understood as part of very rapid growth in the wider private rented sector. Growth in the HMO sector is also exacerbated by changes made in 2011 to Local Housing Allowance14, restricting payment of housing benefit to the “shared accommodation” rate to people aged under 35. By the Treasury’s own estimate in 2011, this put 90,000 additional people into HMOs over the course of the last Parliament15. Respondents said:

‘HMOs or "Shared Housing" are becoming common. Single working people on low wages are sharing accommodation which by default becomes an HMO…”,

“‘Migrant workers particularly from Eastern Europe find it more economic to house share and generally people are finding it harder to afford self-contained accommodation,”

Further, in-migration (international, EU and within UK) was identified by a number of our respondents as leading to increased numbers of HMOs.

There was also some downward pressure identified by some respondents to our survey in the student HMO market, as additional purpose built student accommodation is replacing converted or shared house HMOs. One person said, “There has been a large increase in purpose built student accommodation which has impacted on the number of students living in HMOs.”

3.2 Who lives in HMOs

While HMO residents are likely to be primarily single people, it should not be assumed that this is always the case: one environmental health officer interviewee told us that councils were increasingly placing families in HMOs as a result of lack of other suitable accommodation within their area.

We asked respondents to our survey to identify the people who were most likely to be living in HMOs in their area and those most likely to be living in cold or low quality HMOs (Chart 2 below). We found that students remain the most prevalent group living in HMOs and unsurprisingly there is a clear trend for vulnerable people, unemployed people and those on lowest incomes to be living in HMOs.

14 “Housing Benefit: Changes to the Local Housing Allowance Arrangements” DWP 2010 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/214327/lha-impact-nov10.pdf

15 See HOME study (footnote 1)


Chart 2

It is vulnerable people – homeless, unemployed and those with drug or mental health problems - who are thought most likely to be living in cold or low quality HMOs, followed by people on lower incomes and migrants. We found that, though there are better-off young people living in HMOs in many areas, none of our respondents though that the shared house HMOs occupied by young professionals were likely to be cold. The view of a split HMO market, divided between better off young residents with choice in better quality homes and lower income residents in poorer quality properties was emphasised by one of our survey respondents, “choice of HMO accommodation tends to drive standards up for tenants who have references and deposit etc.”

While students remain the most prevalent group living in HMOs, they are not thought particularly likely to be living in cold and energy inefficient HMOs. One interviewee told us that, in Coventry, students were demanding higher standards and this has led to better quality student HMOs with more insulation and double glazing. This may link to additional choice for students with the increase in provision of purpose built student accommodation. This finding should not be taken as indicating that there are no problems of cold and fuel poverty in student HMOs: in 2013 a National Union of Students survey of students living in the PRS – mostly16 in shared housing - found that:

16 71% of respondents to the NUS survey lived in shared housing


52% report problems with condensation, 47% mould and 41% damp 53% have felt uncomfortably cold in their current accommodation 48% said their accommodation was poorly insulated/draughty 76% limit the length of time they have the heating turned on to save money on energy bills17

3.3 The experience of cold in HMOs

To assess the impact of energy related issues in the lives of HMO residents we asked about the physical consequences in terms of draughts, low temperatures, mould and condensation, whether these were more prevalent in HMOs than in other homes. We also asked whether – in acute situations – “overcrowding or hygiene problems” resulted from cold or damp making rooms or spaces unusable (Chart 3). We then asked respondents if they agreed with a series of statements about cold issues in shared housing (Chart 4).

In addition to the cold and damp problems discussed here we now believe there is probably also an overheating problem in many top floor HMO units, given the prevalence of under-insulated rooms in roofs (see Section 4.2 below).

Chart 3

17 As reported in the HOME study, based on NUS published data and communications with NUS staff


As the above results show, the largest group of respondents felt that condition problems were more common in HMOs than in other homes in terms of uncomfortable or unhealthily low temperatures, condensation and mould. In the case of draughts and overcrowding or hygiene problems linked to cold or damp, the picture is less clear as to whether the problems are more prevalent in HMOs, but very few people thought any of the condition problems were less prevalent in HMOs.

Most of our respondents (see chart 4 below) feel that HMO residents have problems adequately heating and lighting their homes: only 14% of respondents agreed with a view that “in my experience most HMO residents are able to heat and light their rooms/shared spaces”, with 46% disagreeing18.

Respondents said:

‘Tenants fail to use heating as they can't afford it’. ‘Discussions with the residents highlights the cost of heating these large pre 1919 properties with

large single glazed draughty bay windows is extreme and hence they do not put the heating on very often’.

‘Condensation and mould growth is a major problem in a lot of HMOs. This is partly due to fuel poverty but I suspect more down to the number of adults living in a property that was not originally designed to house that many’.

Sixty-four percent of respondents thought that many HMO units have such inadequate heating and insulation that it's just impossible for tenants to keep them warm and free from damp. This result suggests that – for many shared homes – we have not yet even crossed the adequacy threshold of making sure the installed heating and insulation is capable of keeping the home warm and dry, regardless of cost.

To correlate our findings with other datasets we looked at the latest English Housing Survey which asks respondents about experience of cold. Unfortunately the survey does make it easy to identify properties that exactly match the official HMO definition. However, by looking at the different categories of residents and house-type that the EHS does use, it is possible to get close to properties that may be legally defined as HMOs. Sample sizes become very small as the categories of homes become more refined, and the data needs to be treated cautiously on that basis:

18 Thirty-nine percent said they didn’t know or neither agreed or disagreed, highlighting the lack of data in this area.


Data from English Housing Survey: Can you keep living room warm? (answering no)19

All homes 11.22%

Private rented sector 18.16%

Shared (3 or more families, PRS) 21.43%

Shared ( 3 or more families, tenants sharing, PRS) 22.97%

Shared (PRS unrelated tenants sharing (all)) 24.58%

Shared (3 or more people, 2 families, PRS, unrelated tenants sharing) 22.63%

Table 1

This is a poorly worded question for HMOs where many residents will not have a living room20. Nonetheless, these EHS results do correlate with our wider findings and suggests that there is a significant cold problem in HMOs, affecting between a fifth and a quarter of all homes, with this problem being more prevalent than in the wider private rented sector.

There were some dissenting views among our survey respondents in terms of the extent of the mould and condensation problems in HMOs. One survey respondent wrote: “Condensation and mould problems are associated with UPVC windows and low incomes, often Council properties, so draughty Victorian conversions [ie typical HMO properties] generally have less.” But more generally our responses indicate that condensation and mould are problems. The fact is that in poorly insulated, under-heated homes, residents are often fighting a constant battle to try and balance ventilation, moisture problems and high bills.

19 New analysis undertaken by Future Climate using the latest English Housing Survey data: Department for Communities and Local Government. (2015). English Housing Survey, 2013: Housing Stock Data. [data collection]. UK Data Service. SN: 7802, http://dx.doi.org/10.5255/UKDA-SN-7802-1.

20 And there is a higher proportion of “don’t know” responses to this question from people living in shared houses.


http://dx.doi.org/10.5255/UKDA-SN-7802-1

There was similarly a minority view that under-heating is not always a problem in HMOs: two respondents stated that because bills are included in rent, under-heating is not usually an issue, at least in licensed HMOs: “As the majority of our licenced HMOs have heating included in the rent we don't have excessively cold properties”. But the majority (64%) of respondents disagreed. And it was pointed out that it is not just HMO residents who might be under-heating: where landlords are paying the bills they can seek to control the usage of the heating system. One survey respondent said that, “Some landlords control when the heating is on or the temperature, some by remote control, leading to periods of inadequate heating.” An interviewee raised a concern that new heating controls (using smart technology) would make it easier for landlords to remotely limit or cap the heating used in HMOs.

Chart 4

High heating costs lead to financial problems either directly or indirectly: 64% agreed that HMO residents often can’t afford to heat their homes adequately (only 6% disagreed with this statement) and 46% agreed that – even where bills are included in rent - high heating bills lead to higher rents or other financial problems (versus 9% disagreeing).

In light of the above it is unsurprising that most (62%) of our respondents felt that fuel poverty is a relevant consideration for HMOs (15% disagreed).

4 Characteristics and energy features

4.1 Examples of typical HMOs

Whilst low household incomes are clearly prevalent in the HMO sector, the extent of problems of cold, damp and high cost within HMOs is driven in large part by the built form of these buildings. We asked respondents to our survey to identify typical HMOs in their area.


It is striking that the characteristics of HMOs most commonly identified by our respondents are close to the characteristics identified by DECC and others as key risk factors that pre-dispose households to be in fuel poverty:

Pre-1919 age of construction Low levels of insulation Electric heating Private rented sector Single person households Unemployed households

The majority of respondents drawing pen portraits of larger, older town houses:

Converted large five floor terraced properties on a sea front. Others are multi occupancy flats above commercial properties.

Large town house providing a shared living room with bedrooms on ground and first floor, sometimes with an attic room on second floor. Gas central heating, more than one bathroom, sometimes some en-suite rooms. built interwar. Semi-detached or terraced usually double glazed and loft insulation but no other energy saving measures.

‘Taking Bournemouth/Poole area firstly typically 1885-1910, cavity construction 80-100mm cavity width, detached, 7-10 units mixture of bedsits and studio flats, when first looked at usually had 0-25mm loft insulation and unfilled cavity (however most now fully insulated, but most (90%) rooms in roof remain untreated. Typically heated with E7 storage heaters.’

‘1800s, listed, attached on one side, very large. Was hotel, now converted. Single bedsits. Zero insulation’.

‘1840-1900 construction, Terraced Georgian property built with solid walls and either listed or in conservation areas. Levels of insulation in loft tend to be low. Heating is usually mains gas or electric storage heaters.

‘1880 to 1920, mid terrace, two storey property which is let as a shared house. Roof insulated with 100mm loft insulation. Heating either mains gas from a boiler in the kitchen/bedroom or electric storage radiators’.

‘Pre 1919: terrace: s257 self-contained flats: very little insulation in attic space and usually solid stone wall: usually electric wall heaters or electric storage’.

‘1890s brick built terraces, 3 storey, 9" walls, poor insulation. UPVC windows generally plus central heating, combi boiler’.

‘Pre-1919; mid-terrace; bedsits or s257 flats; v poor insulation; gas central most common’. ‘Converted Victorian semi-detached with small one bedroom or studio s/c flats, (not to building

regs). Electric heaters - with timer and thermostat. No heating in bathrooms. Ceilings are high, walls don't have CWI [cavity wall insulation] or aren't suitable. No loft insulation. No heating in communal parts’.

‘Pre 1920 - 3-storey semi-detached house. 3 self-contained flats with uninsulated walls, moderate-to-poor heating appliances. 100mm loft insulation or uninsulated attic room. Single-glazed sash windows’.


‘Poorly converted /5 storey terrace Victorian house containing self-contained flat with poor insulation and gas central heating. Quite often there is on peak electric heating. We also have similar houses used as bedsits and sharing bathrooms’.

‘1940s, terraced, multiple occupancy house, solid wall, electric storage heaters’. ‘1940s, end terrace, 2 storey shared house, minimal insulation, old heating system in place but

tenants use old electric heaters’. ‘1950's traditional brick built 2 storey dwelling with mixture of gas & electric heating’.

Some respondents to our survey emphasised that there is not a single type of HMO: one respondent saying “No such thing as a typical HMO I'm afraid. Going back to the 80s they were traditionally older, inner-city properties in poorer areas. They now include the whole range of property types including ex council flats and new town-houses”. Nonetheless the focus on older town houses does seem to be backed up by other data: though it is a small sample, the latest English Housing Survey suggests that a high proportion (53%) of shared homes (private rented sector, occupied by 3 or more unrelated people sharing) are mid or end terraces. Using a larger sample, but a looser approximation of HMOs (private rented sector homes occupied by “other multi-person households”) the EHS shows that 49% of homes of were built before 1919; 75% before 194421.

21 See Appendix 2: Analysis of the latest English Housing Survey data undertaken by Future Climate for this study Department for Communities and Local Government. (2015). English Housing Survey, 2013: Housing Stock Data. [data collection]. UK Data Service. SN: 7802, http://dx.doi.org/10.5255/UKDA-SN-7802-1.


http://dx.doi.org/10.5255/UKDA-SN-7802-1

4.2 Energy efficiency problems in HMOs

We asked respondents to state whether a range of energy efficiency issues were more or less prevalent in HMOs than in other housing.

Chart 5

Our data suggests that the principal energy related issues that are distinctive to HMOs are:

‘Poorly insulated rooms in roof’ – identified as more prevalent in HMOs by 50% of respondents; ‘Electric heating’ was the second most commonly identified issue. Electric heating is not always

problematic where properties are very well insulated. However our respondents also identified that use of older storage heaters and use of on-peak electric heating as primary space heating were prevalent in HMOs.

Lack of loft insulation in properties with standard lofts remains an issue that is more prevalent in HMOs than in the wider stock.

Secondly our data suggests that older boilers and uninsulated cavity walls – issues for the rest of the stock – are not especially acute problems in the HMO sector. Nonetheless it is important to note that respondents did not think these issues were less prevalent in HMOs than other homes.


The use of expensive electric heating is very noticeable as a distinctive issue for HMOs – whether that is direct electric heating or older storage heaters which do not hold their heat well. The issue here is compounded by the fact that many HMOs residents are often at home all day and so have a high heating demand22. Use of fixed direct electric heating may have been driven by HHSRS enforcement practice which has tended to focus on heating adequacy rather than heating costs (as we explore in section 7 below).

The under-insulated room in roof is also noticeable as an issue that is not widely discussed in relation to the rest of the housing stock. This can be a problem both for cold in winter and for overheating risk in summer. A paper from Warwick University and the French Service des Etudes Médicales reports that:

“Investigations into the Paris heat wave of 2003 found that elderly residents of dwellings sited immediately under an inadequately insulated roof were more likely to suffer overheating and an increased risk of mortality than those in other apartments (Vandentorren et al, 2006).

The amount of heat conducted through the opaque elements of the building fabric when the temperature of external surfaces is higher than the internal is relatively small in modern buildings. However, this may not be the case for older buildings and in some cases (where dwelling or rooms are directly under the roof) heat gains can be very significant.”23

4.3 Paying for energy in HMOs

We asked what payment arrangements were prevalent in HMOs in survey respondents’ communities (chart 6 below). Many indicated that these were highly variable depending on the type of HMO (with S257 HMOs usually having individual meters, for example). Our survey respondents identified that landlords including costs of energy in rent was the most common way in which energy is paid for, followed by tenants sharing bills, then prepayment meters in each unit. Arrangements may be mixed for fuels with gas included in rent but electricity paid for by individual pre-payment meters24.

22 An issue identified to us by one of the EHO interview respondents

23 Thermal Discomfort and Health: Protecting the Susceptible from Excess Cold and Excess Heat in Housing Ormandy and Ezratty 2014 https://www2.warwick.ac.uk/fac/med/research/hscience/sssh/publications/publications14/thermal.pdf

24 Based on interview with an EHO


Chart 6

Landlords sub-metering was identified as “prevalent” by 20% of respondents. One interviewee felt that levels of sub-metering was diminishing due to Ofgem rules (see below) and the fact that in the past, but no longer, energy companies had provided sub-metering services. Even if tenants are not overcharged, sub-metering can be practically difficult for HMO residents - for example with tenants having to buy tokens off their landlord at a time that suits the landlord.

Ofgem energy resale rules prohibit landlords from profiting from energy sales whether sub-metered or calculated on other bases (for example on the basis of the size of rooms occupied). Resale rules do not apply where a fixed charge for energy is agreed as an additional charge on the rent, before rental agreements are signed (though where such fixed charges have a usage cap it is likely the resale rules do apply).

We asked respondents if they felt the resale rules were being adhered to and received a full range of responses from “We have no experience of this happening in our area,” to “Landlords will have inclusive bills in their rent but have a utility cap. I am yet to hear of a case where a landlord has refunded money to a student if they did not reach the cap,” and “landlords sometimes profit from token arrangements that can only be purchased from them.”


5 Barriers to action on energy efficiency in HMOs

Chart 7

We asked respondents their views on the most significant barriers to action in HMOs (Chart 7 above). The main barrier is the basic issue that these tend to be hard to treat properties: large, old and solid walled where the costs of improvements are high. They are in urban areas and access and consent issues may also complicate action.

The second issue highlighted is the supply/demand issue: that landlords do not have to make energy efficiency improvements in areas of high demand, and/or the fact that tenants do not ask for these features. This is clearly not always the case – our evidence above suggests that in the more professional or higher end of the student market properties are being improved. But in much of the HMO “market” normal rules of supply and demand do not apply, with tenants being placed in these properties by local authorities or having very limited choice due to personal circumstances (no deposit, poor references, limited English etc). This poorly functioning market is why government already takes a more robust regulatory approach with HMOs than other rented properties, and also makes the case for stronger use of regulation as a means of managing energy standards in these properties.


Competing local priorities emerged as a strong factor for action on energy efficiency in HMOs both in this part of our survey and in interviews with EHOs. While all local authorities appeared to recognise their duties to monitor and act on excess cold in rented properties and to licence large HMOs, as section 7.5 highlights commitment to enforcement action in the PRS varies greatly across different local authorities. The reasons for this and the challenge to national policy makers this creates are explored in more detail later in the report and the conclusions below.

Comments under the “other” heading mostly related to the lack of national support programmes for energy efficiency.

6 Energy Performance Certificates and HMOs

There are two recognised issues with regard to the issuing of Energy Performance Certificates for HMOs which we explored through our survey and interviews. The first relates to the fact that EPCs are generally not considered to be required for HMO rental situations. The second issue is that there is a lack of clarity around what type of EPC different HMOs may require.

In additional to these issues around the issuing of EPCs, three interviewees highlighted that EPCs could be used much better alongside private sector housing programmes including HMOs licensing - but scope for this was limited in non-unitary authorities by the fact that Trading Standards (at county council level) enforced EPC requirements while housing enforcement activities were run from the district council.

6.1 Requirement for EPCs at Point of Letting HMOs Units

DCLG’s “How to Rent” checklist advises that Energy Performance Certificates are not required at point of letting units within HMOs.25 This can mean that tenants in HMOs get less information about the energy used in their home than other tenants.

The fact that HMO units may not require EPCs could limit the impact of the PRS minimum energy efficiency regulations which will take effect from 2018. HMOs which have not been sold or rented out as a whole property since 2008 will not have to meet the minimum EPC “E” standard because they do not have the EPC which acts as the legal trigger for these regulations26.

25 DCLG’s “How to Rent” checklist advises that “The landlord must provide you with… …The Energy Performance Certificate. This will affect your energy bills and the landlord must provide one (except for Houses in Multiple Occupation).” https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/496709/How_to_Rent_Jan_16.pdf

26 There are also other reasons why the regulations may have a limited impact – most notably the requirement that landlords only have to install measures where these are fully funded by a third party.


One of our respondents said: “Currently the EPC requirements exclude the majority of HMOs and the proposed new enforcement powers to ensure PRS properties meeting minimum energy efficiency standards which come into force in a couple of years have so many exemptions that most PRS properties (inc HMOs) will not need to comply with these minimum standards.”

As part of evidence gathering for this study we found that Dr David Smith, Legal Director of the Residential Landlords Association is now advising that the EPC is required a point of letting of HMOs.

The issue is that the relevant regulations says that an EPC is required only at the point of rental of a "a section, floor or apartment within a building which is designed or altered to be used separately.”27 Mr Smith in a March 2016 communication reproduced with permission here says:

“The EPC definition neither includes or excludes an s254 HMO because the definition is not just about design. If you design a property to have individual bedrooms with en suite bathrooms and shared kitchens then it will be a s254 HMO but it will still be designed to be used separately. The problem is that the EPC definition does not really make sense. The EU was of the view that EPCs should be provided for HMOs and there now appears to be confusion. This is partly because the EU tends to use the word "apartment" as they have done in the Heat Networks directive and this has not direct translation here.”

6.2 Methodology to be used in EPC assessments

The second issue around EPCs and HMOs is that of the appropriate methodology (domestic or non-domestic) for carrying out EPC assessments in HMOs. The issues is that SAP (the EPC calculation methodology) is designed to estimate energy use using calculations based on construction, installed measures and behaviour within a typical family home. A SAP assessment may not be suitable particularly for larger, bedsit-style or hostel HMOs.

The survey undertaken for this study found that while only a small percentage of our respondents (12%) claimed to be familiar with the issue, the problem that “you can’t do an EPC for bedsits” was mentioned several times, for example “I assume they [EPCs] are not being required for bedsits with shared facilities. How would they be done anyway?” This has the following practical consequences:

Lack of clarity around how SAP assessments should be carried out causes problems with financing schemes, particularly where these are based on ECO which has required EPCs to calculate grant. Our respondents highlighted that this has militated against inclusion of HMOs in ECO funding (see section 8 below).

It is difficult for environmental health officers to know when it is appropriate to use SAP assessments within assessments of excess cold risk in HMOs or individual bedsits– limiting and complicating the use of SAP in supporting HHSRS assessments

It may cause confusion and difficulty when EPCs are specified as a minimum requirement of EPC licensing.

27 Section 6(5) of the Energy Performance of Buildings (England and Wales) Regulations 2012 as amended in Part 4 of The Building Regulations &c. (Amendment) Regulations 2013


The government has set a goal that no properties rented or owned by people in fuel poverty which have an Energy Performance Certificate of Band G or F by 2020. It is currently possible for an HMO resident to be occupying an uninsulated, electrically heated attic room within a wider property that does as a whole building meet the minimum EPC “E” standard.

7 Council action to promote energy efficiency: enforcement and licensing

Through our survey, interviewees and literature reviews we have sought to understand how councils, in spite of the issues raise above, are using powers given to them by central government to tackle dangerous excess cold and promote energy efficiency in HMOs. This section presents our findings.

This section also includes a summary of the government’s proposals to extend mandatory licensing to a wider variety of HMOs as consulted on in their recent technical discussion document28.

7.1 Introduction: enforcement of housing standards

The Housing Act 2004 puts in place the regulatory framework for housing health and safety and includes several specific provisions for HMOs. The principal elements impacting on HMOs are:

Housing Health and Safety Rating System (HHSRS) (established through Part 1 of the 2004 Housing Act) – the regulatory system councils are required to use to assess and address health and safety hazards in all homes including cold, damp and overheating. Councils have a duty to monitor their housing stock for hazards and to intervene in relation to Category 1 (serious) hazards. They have the power to intervene in response to Category 2 (more minor) hazards. A very clear Parliamentary Briefing of the development of HHSRS, how it works and policy developments since its introduction is publicly available29.

HMO Licensing (Part 2 of the Act)o Mandatory licensing – the requirement for all larger HMOs to have a licence issued by

the local council (specifically the local housing authority) – see section 1 above.o Additional licensing – which councils can apply to smaller HMOs (including S257 HMOs)

in designated areas where there are poor housing conditions or management.

28 Extending mandatory licensing of Houses in Multiple Occupation (HMOs) and related reforms: A technical discussion document DCLG 2015 See Footnote 7 for link.

29 Parliamentary Briefing on History of Housing Act and HHSRS including policy developments (dated March 2015) http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN01917


Selective licensing (Part 3) – where councils can require a licence for all private rented properties (including HMOs) in areas with low housing demand and/or anti-social behaviour issues.

Management regulations (Part 7) – applied to all HMOs - these set minimum standards for repair and upkeep of facilities and require basic management arrangements to be in place. Separate management regulations, but with similar provisions, apply to S254 and S257 HMOs.

7.1.1How are energy efficiency standards applied in HMOs? HHSRS, Licence condition, management standards and facilities standards

We explored with interviewees how – practically – standards are enforced at a local level. A requirement for a landlord to make improvements in the management or facilities of any individual HMO30 may be driven by a consideration of some or all of:

The judgement of an environmental health officer about whether hazards are present based on their professional application of the HHSRS operating guidance

Local standards for licenced HMOs Local published guidance on expected standards for non-licensed HMOs or wider PRS properties National proscribed standards for facilities that apply to all licenced HMOs National proscribed management standards for all HMOs

Locally published standards aim to provide clarity to landlords about the features that EHOs expect to see in their properties. As we explore in Section 7.2 below, these local standards vary significantly around the country but can (and some do) cover heating systems and sometimes insulation. Examples of this are noted in Section 7.2 of this report.

Although respondents recognised the legal requirements to adequately enforce housing quality in their area, local priorities and different approaches to enforcement do affect the standards that – in practice – different landlords have to meet in different parts of the country and within the same local authority area. For example in the case of Sheffield (see “Selective Licensing” below) the council took a strategic decision to proactively require landlords to address Category 2 cold hazards in the area covered by its selective licensing scheme.

It is noticeable that while local standards may cover heating and insulation (and EHOs might order improvements in these areas) the proscribed nationally set elements of these standards applying to HMOs do not cover provision of effective heating or insulation – instead relating to bathrooms, toilets, fire precautions, kitchen and laundry facilities. It is noticeable that Section 65 of the 2004 Housing Act gives the government the power to extend the proscribed facilities standards beyond bathrooms, kitchens and laundry facilities to also cover “standards as to the number, type and quality of other facilities or equipment which should be available in particular circumstances.”

Locally set standards may be more subject to challenge by landlords. For example, a recent legal decision in regard to space standards in HMOs units set by Manchester City Council31 suggests that amenity standards laid down by local authorities do not have the full force of nationally set prescribed

30 Or a refusal of a licence to let the property


standards. On the other hand, a recent Upper Tribunal judgement in this area has reinforced councils’ freedoms to set licence conditions. In a case relating to conditions requiring electrical safety certificates and carbon dioxide detectors in a selective licensing area, the barrister acting for the council involved (Hyndburn in Yorkshire) has written “’[following this judgement] Local housing authorities can in my view have a higher degree of confidence in imposing licence conditions, in circumstances where they represent a proportionate means of ensuring the safety of tenants within an SLA.32”

7.1.2Energy standards applied in HMOsThe energy efficiency features expected in HMOs varies significantly between councils. We found some evidence from our survey that authorities are shifting to regard EPC “D” as an indicator that a property does not have a category 1 hazard. This applies where they place people in HMOs accommodation: one respondent said “Band D properties are assumed not to be a Cat 1 hazard for excessive cold.”

31 Clark v Manchester City Council [2015] UKUT 129 (LC) http://www.localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=22632:upper-tribunal-comments-on-councils-setting-space-standards-for-rooms-in-HMO&catid=1:latest-stories

32 “Matthew Paul successful in Upper Tribunal over selective licensing area conditions” Blog, Civitas Law: Sept 21st 2015 http://www.civitaslaw.com/news/2015/9/21/matthew-paul-successful-in-upper-tribunal-over-selective-licensing-area-conditions.aspx


We found evidence that councils do increasingly regard F&G banded EPC properties as likely to have category 1 hazards and that councils are taking action on these properties – either through licensing conditions or HHSRS enforcement. It is arguable that this should always have been the case – since 2006, SAP35 (close to the E/F boundary on an EPC) has been officially indicated as a proxy for presence of a Category 1 excess cold hazard33. But the influence of DECC’s planned PRS minimum energy efficiency regulations34 has also been very important in giving some of the councils we spoke to confidence to require homes to meet an E standard – either as an HMO licence condition or through HHSRS enforcement action.

EHO Interviewees and survey respondents were nonetheless clear that they did not think EPC assessments on their own are robust enough to act as a proxy for excess cold hazard, for example a respondent said “[our standard for housing referrals is] Actually band D - but assessed using HHSRS as some EPC's have been variable quality.”

Electric heating and low levels of insulation in solid wall properties are typical features of HMOs. The most detailed previous survey of enforcement action in HMOs in this area - in 2010 - found that council officers are usually willing to accept fixed electric heating and would only sometimes or rarely require insulation of flat roofs or rooms-in-roofs. Reviews of published local standards undertaken alongside this study found that councils were often still requiring only fixed electric heating systems with focus on heating adequacy rather than cost. This is in line with DCLG’s 2006 HHSRS Operating Guidance but does not take account a subsequent Upper Tribunal case (Liverpool vs Kassim) which ruled that heating cost could be taken into account when considering risk of excess cold. Written guidance on standards of insulation is included in some published sets of standards but not others.

7.2 Examples of local authority published standards for HMOs and selective licensing areas

Rugby Borough Council’s standards are typical, focusing on heating adequacy:

“Each bedroom and living room should have a fixed space heating appliance or be served by a central heating system, which may include any system of warm air or under-floor heating, capable of maintaining a temperature of 18oC when outside temperature is minus 1 degree C.”35

There is no mention of insulation.

33 A Decent Home: Definition and guidance for implementation: June 2006 – Update, CLG, 2006. Page 18: “A SAP rating of less than 35 (using the 2001 SAP methodology) has been established as a proxy for the likely presence of a Category 1 hazard from excess cold.”

34 Required in the 2011 Energy Act

35 Houses in Multiple Occupation: Standards of Amenities Rugby Borough Council, 2014 https://www.rugby.gov.uk/downloads/file/314/standards_of_amenities


Waltham Forest Borough Council sets a somewhat more robust standard and links heating to insulation:

“A fixed heating system must be provided to all lets. Radiators must be fitted with thermostatic valves. Fixed storage heaters are preferred where there is no gas supply although fixed modern programmable convector heaters may be provided in buildings with a high level of thermal insulation.”

Norwich Council shows best practice. It limits HMOs landlords’ electric heating options to storage heating:

“Suitable methods of heating are: a) central heating b) electric storage heaters. These must be a fixed installation and capable of being run on economy tariffs with minimum standards of auto charge control in accordance with Building Regulations Part L1 and manual back up. c) fixed gas heaters connected to a suitable flue and terminal outlet.”

And in an extended section on insulation requirements for licensed HMOs, Norwich requires that

“Attic rooms and dormer windows must be insulated to a standard equivalent to the minimum energy efficiency values set out in approved document L1B. If the current insulation does not meet this standard then additional insulation must be fitted. Care should be taken not to block any ventilation at the edges (eaves).”36

In a further example of good practice, Sheffield City Council set the standards that will be expected of private rented properties (not just HMOs) in a selective licensing area:37:

“An Energy Performance Certificate (EPC) is required. Mid terraced properties must have a certificate with a D rating or higher. End terrace properties and semi-detached properties must also aim for a Band D but have a minimum of the top half of Band E. The exact works to improve these house types to a reasonable standard will be the subject of an individual assessment.

“Roof/loft spaces must be insulated where they are accessible from the house. A minimum of 270mm loft insulation, or equivalent including any upright stud walls in attic loft spaces, where accessible. Cheeks and ceilings of dormer windows and roof slopes can be over-boarded with insulated plasterboard to obtain greater energy efficiency if no insulation is evident

“Loft hatches must be insulated and draught proofed.

“Hot water tanks and exposed hot water supply pipes must be insulated if passing though unheated areas.

“Where cellar ceilings have been removed or the ceiling is in poor repair exposing floor joists there must be 150mm mineral fibre insulation fixed in place with chicken wire. It is important to maintain ventilation to cellars otherwise insulation and plasterwork will become wet with condensation. Where other insulation exists an individual assessment will be made to check its suitability.”38

For another selective licensing area, Newcastle City Council requires the following. The referencing of the minimum “E” standard coming into force from 2018 is noticeable:

36 Private Sector Housing: Amenity Standards Norwich City Council 2015

37 This information based on interviewee with Sheffield Housing Officer

38 Selective Licensing – property standards, Sheffield City Council 2014. Retrieved from https://www.sheffield.gov.uk/dms/scc/management/corporate-communications/documents/housing/renting-HMO-landlords/selective-licensing/Selective-Licensing-Property-Standards--15-4-2014-/Selective%20Licensing%20Property%20Standards%20(15-4-2014).doc


“The Licence Holder must provide each occupier of the house with an Energy Performance Certificate (where applicable). The Licence Holder shall provide a copy of the said certificate to the authority on demand. Please note that the letting of properties with an EPC rating of F or G will be banned from April 2018.

All habitable rooms must be provided with adequate and suitable fixed space heating appliances or a controllable central heating system. If a hot water cylinder forms part of the heating system it must be properly lagged with a suitable jacket. All hot water pipes must also be lagged.

If the house is an upper property and can have loft insulation this must be provided to at least 250mm. Where there is any upgrade of loft insulation, a standard compatible with current Building Regulations must be met.

The Licence holder must also ensure that the property has at least two of the following energy efficiency measures:

Double glazing Energy efficient central heating boiler. Cavity wall insulation Draught-proofing Radiator thermostats Low energy light bulbs throughout. (It is the licence holder’s responsibility to provide replacement energy efficient

light bulbs.)”39

7.3 Mandatory, additional and selective licensing

7.3.1 Impact of licensing on energy efficiency and fuel povertyBased on the minimum, nationally prescribed licence conditions, mandatory licensed HMOs do not need to reach any energy efficiency standard beyond being free of category 1 excess cold hazards. We asked respondents to our survey to identify whether mandatory licensing had increased the energy efficiency of HMOs. The large majority of respondents (63%) said there was not enough data to know whether licensing has had a positive impact on energy efficiency in HMOs and some respondents pointed out that licensing has no necessary direct impact on energy efficiency (“Anecdotally I can’t recall noticing better EPC’s for licensed properties. When checking a licence I don’t recall seeing too many references to energy improvements.”)

39 Licence Conditions, High Cross 2015 – 2020, Newcastle City Council available from https://www.newcastle.gov.uk/housing/private-housing/selective-licensing


Nonetheless it was noticeable that many respondents made passing references to better standards and data for licenced HMOs and it is undisputable that the licensing opens up a route for communication with landlords about standards and for data gathering. The impact of licensing on energy efficiency probably depends on the extent to which councils choose to use the licensing to drive this outcome (one respondent noted, “Cardiff council focused on energy efficiency as part of their additional and mandatory licensing schemes”). In an interview, Oxford City Council (also discussed below) emphasised that they saw licensing as a tool that they have available to improve standards particularly in HMOs - and that they use licensing in parallel with HHSRS (a tool for the whole PRS). Our interviewee from Oxford City Council felt that their HMO licensing programme, extended through additional licensing to cover all categories of HMOs, has driven higher energy efficiency standards in the HMO stock.

7.3.2Selective and additional licensingSelective licensing schemes can be applied to all private rented properties in areas with social or housing market problems linked to renting. We asked our survey respondents in detail about selective licensing schemes: sixty-six people responded to our questions on this topic and eleven respondents provided details on schemes currently in place.

Chart 8

We did not find any evidence of a particular focus on cold or on HMOs within selective licensing. The basis for putting selective licensing schemes in place can only be low demand or anti-social behaviour and one respondent commented, “Selective licensing is about dealing with Anti-Social Behaviour and we have previously struggled to find evidence to link ASB with HMOs.”

However, the example of Sheffield’s energy efficiency standards (and the slightly less ambitious standard for Newcastle) for their selective licensing area show how ambitious standards can be set by local authorities for all PRS homes in these areas.


Additional licensing schemes apply only to HMOs and can be put in place in areas where HMOs are poorly managed or in poor condition. From our evidence additional licensing schemes are less prevalent than selective licensing with only 9% of respondents saying that they currently have schemes. Our literature review, however, found evidence of a rapidly growing number of such schemes in a wide variety of different areas (see Appendix 2). Respondents provided details on six current and two planned schemes. The additional HMOs brought into the scope of licensing were a mixture of all non-mandatory-licensed HMOs; smaller S254 HMOs; and in one case, S257 HMOs.

Councils can use prevalence of cold in an area as grounds for introducing additional licensing (as a condition or management problem). Cold was a significant factor in driving four of the additional licensing schemes our respondents described, though not as the main reason: one respondent said “Partly [cold was the driver] - excess cold is the main hazard in HMOs.”

Oxford has an additional licensing scheme covering all HMOs (as defined in the 2004 Housing Act – S254 and S257 HMOs) in the city. It was noted in interview that S257 HMOs landlords in Oxford often did not come forward for licensing because they did not realise that their properties met the HMO definition.

7.3.3Production of an EPCs as a licence conditionThe production of an EPC as a licence condition can overcome the fact that EPCs are – under official guidance - not required in HMOs lettings situations (see above).

Six of the 11 Selective Licensing areas required EPCs as a licence condition. One noted “No [there is no requirement for an EPC] but condition exists that a copy of the EPC is provided to the tenant and must be supplied to the Council following a written request. Production of an EPC is a condition of the Council's Landlord Accreditation Scheme, which license holders should take reasonable steps to apply for. If they are accredited, they receive a discount on the cost of a license. Less than 50% of licensed landlords are accredited under the LAS.” A further respondent expressed a concern possibly rooted in the Manchester v Clark case described above, “Not yet decided but I understand there are difficulties enforcing standards not included in license of other housing regulations.”

Four of six additional licensing schemes that were reported on required EPCs as a licence condition, though one of the respondents who was planning a scheme said “How do you get an EPC for HMOs with shared facilities?” – the “EPCs for bedsit HMOs” problem described at section 6 above.

7.3.4Minimum EPC standard as a licence conditionOne scheme manager in our survey stated an intention to introduce a minimum EPC condition as part of additional licence conditions: “Not currently but will come in line with new requirements when they come in” - presumably a reference to the PRS minimum energy efficiency standards. However, another respondent wrote “Not sure if this can be done legally and we would not do anything that was not enforceable.”


The HOME report identified that Bath and North East Somerset had applied a minimum EPC “E” standard within licence conditions for mandatorily licensed HMOs. Oxford City Council told us that they were now taking a similar approach but based around imposing individualised licence conditions on HMOs that rated F/G on the EPC. Based on the recommended measures on the EPC, landlords of F/G banded HMOs in Oxford will be required to install the measures concerned as a condition of their HMOs licence.

7.3.5DCLG proposals to extend mandatory licensingIn its recent Technical Discussion Document on Extended Mandatory Licensing and related reforms, DCLG has proposed extending mandatory HMOs licensing to shared homes occupied by five people in at least two households of the following additional types:

Two storey buildings (currently mandatory licensing only applies to three storey buildings) Section 257 HMOs (poorly converted flats) All flats above or below commercial premises (currently only such flats in three storey or higher

buildings are within scope of the regulations). The consultation document also says there is a weaker case for extending HMOs licensing to single storey buildings and to all residential flats.

7.4 Standards applied in HMOs where councils are placing vulnerable/homeless people

We asked about whether a minimum EPC standard is applied when councils refer people in housing need into HMOs accommodation. Twenty-one respondents said there were no standards in place, versus five who said there were: the largest group said “don’t know”. Out of seven people who were able to provide detailed information, three reported an “EPC” D standard, though this may be within a requirement that homes are free from HHSRS category 1 hazards – rather than as a stand-alone EPC standard.

We also asked respondents particularly about energy standards in HMOs where successful asylum seekers are placed. Generally, the view was that these properties were inspected by the council and of a decent standard though one respondent noted that conditions could be very variable.


7.5 Challenges to effective enforcement activity in councils

There are some well-understood issues relating to the application of the HHSRS and the tackling of excess cold, which were reinforced by responses to our study:

A lack of up-to-date official guidance and data for carrying out HHSRS inspections. The official HHSRS Operating Guidance was issued in 2006. HHSRS is a data-driven process and one of our interviewees pointed out that some of the housing and health data in the official guidance is now nearly twenty years old. One impact of this is in regard to provision of heating - which continues to be assessed by many councils only on adequacy (ie the capacity of the heating system to warm the room to 18degrees regardless of cost) rather than cost to residents. In 2014 DCLG stated that it had no plans to update the Operating Guidance but as this report highlights this view may now be reconsidered40.

A lack of willingness by many councils to take formal enforcement action. An interviewee told us that it was common for younger environmental health and housing officers never to have been involved in enforcement action (and highlighted that this was at odds with other areas of environmental health practice, for example food safety). The HOME report as well as earlier reports – for example by one of the developers of the HHSRS system, Dr. Steven Battersby in 201141 - have repeatedly shown a lack of enforcement action using HHSRS. Reasons usually cited are that councils are likely not taking enforcement action because official guidance encourages them to use “softer” approaches, because of uncertainty over outcomes of enforcement action42, and because of lack of resources in the council43. This has often resulted in a lack of proactive enforcement with the emphasis on the tenant to arrange an inspection of any premises to determine whether there is a Category 1 or 2 hazards. Whilst the research has not conducted direct research into this area it is likely this results in minimal activity as many tenants are deterred from making requests of their landlords for improvements and maintenance works because they are afraid of being evicted.

40 See Parliamentary Briefing note on HHSRS referenced at Footnote 28

41 Are Private Sector Tenants Being Protected Adequately? A study of the Housing Act 2004, Housing Health and Safety Rating System and Local Authority Interventions in England, Dr Steven Battersby, 2011 http://www.sabattersby.co.uk/documents/HHSRS_Are%20tenants%20protected.pdf

42 The variability of First Tier Tribunal judgements – ruling on appeals against HHSRS decisions by landlords – was cited as an issue by several of our interviewees.

43 See HOME study for more details on this point (see footnote 1)


Funding for regulatory action – most respondents to our survey indicated that activity was principally funded from council general budgets, with some additional funding likely to be forthcoming from income from HMOs licensing and – to a lesser extent – HHSRS enforcement activity. One respondent stated: ‘We have some income from HMOs licencing and enforcement action however not enough mandatory licence properties to self-finance and have additional licencing in a specific area not the whole council area’.

Taken together, there is therefore a concern about the extent of proactive enforcement action. To some extent this needs to be addressed nationally, with new national guidance and regulation around HHSRS and – an even bigger issue – ensuring that councils have the resources to deliver effective programmes. But there is also scope for better sharing of best practice and ideas between authorities: when asked why they were not using EPC standards within licence conditions, one EHO told us that it was because the idea had never come up.

8 Uptake of energy efficiency grants and financing in HMOs

We asked respondents to our survey about what financing support for housing energy efficiency improvements was made available in their area and whether landlords were receiving funding to improve HMOs under such schemes. This may be funding from wider housing improvement/ regeneration programmes or from ECO or other explicitly energy efficiency focused schemes.

One respondent said that they had a specific improvements grant scheme for HMOs. Twenty-three percent (16 respondents) of respondents to this question said their area had improvement grant schemes targeted at the private rented sector/HMOs. Forty-five percent (30 respondents) said there was a wider energy efficiency financing scheme.

In terms of the extent to which improvement schemes reached HMOs, most (though not all) respondents who gave responses reported low reach into the HMO sector. The most successful scheme reported reached 33 HMOs and offered “Housing improvements, etc and a special initiative for energy efficiency grant in the past year, which was very popular for secondary glazing and double glazed units.”

In terms of energy efficiency programmes (we asked about “any energy efficiency scheme (financing, loans etc) for private sector housing?”) one respondent gave a lengthy response on why HMOs uptake was low:

“[HMOs uptake of the financing scheme is] Minimal. Lack of Green Deal Finance meaning that there isn’t a way to finance non-grant eligible properties. As well as there not being a lot of ECO funding, the amount of this funding is dependent on the amount of carbon emissions saved per property. Unless the house has shared facilities, individual bedsits would have to be assessed separately and it’s more difficult to prove the necessary carbon savings from small properties. Obvious barriers around getting agreement with multiple tenants and disengaged landlords. We don’t record HMOs separately from private rented, however, I would expect there to be very few of them that take up such measures for the above reasons. The exception to this is likely to be area based schemes such as the SCIP project where additional capital funding may be available. “ [SCIP is a regeneration funding scheme in Leeds].


Out of 27 respondents who gave details of an energy efficiency funding schemes, nine said “don’t know or no data” when asked about HMO uptake, eight said HMO uptake “was very limited, or none.”44 Only one respondent gave a very different answer - reporting on a dedicated PRS scheme on the south coast that ran from 2005-2014 and had very high HMO uptake: “Between 60-80% of all HMOs in project areas have been surveyed and identified as insulated or insulated under the schemes. HMOs were specifically marketed to through LA registers, student letting services, letting agents and via local NLA meetings .”

9 Conclusions and policy recommendations

9.1 The problem of fuel poverty in HMOs

Our research has shown that Houses in Multiple Occupation (HMOs) are very often highly energy inefficient, with residents who are often vulnerable and usually on low incomes. HMOs are prone to cold and damp. The low levels of energy efficiency in these buildings can cause financial problems for residents either directly through high bills or indirectly by adding to rent costs.

Characteristic features of HMOs identified through our survey have been identified in DECC analyses as correlated with the highest levels of fuel poverty: pre-1919 properties, private rented tenure, electrically heated, very low income, often unemployed households.

There are distinct energy efficiency problems in HMOs – notably under-insulated lofts and rooms in roofs and old electric heating systems.

9.2 Why have cold HMOs not been improved

While the problem of the landlord/tenant energy split incentive is less acute in the HMO sector (because landlords often pay energy bills) landlords have often chosen not to make energy improvements, particularly at the bottom end of the HMO market. Respondents to our survey believe that is because HMOs are often difficult to improve house types and because of the lack of a well-functioning market.

Funding for energy efficiency in HMOs from ECO (and predecessor supplier obligations) has been limited. Mostly that is because supplier obligations (ECO and predecessor schemes) have struggled to reach homes in the wider private rented sector to any significant extent. But also HMOs are non-standard homes which are often seen as “too difficult” to include in energy efficiency funding programmes – a problem that has been compounded by issues with SAP (EPC) assessments in these properties.

44 These were free responses – which we have summarised and categorised. Other respondents did not respond or made other points in response to this question.


There are likely significant informational barriers to action on energy efficiency in HMOs, particularly with landlords being unaware of options for improving hard-to-treat house types.

Against this background, while there are some very good examples of best practice, enforcement and licensing action has often not gone far enough to promote energy efficiency in cold and highly energy inefficient HMOs. Local authorities often tolerate HMOs with very basic levels of insulation and with direct electric heating; one of the most expensive ways of heating a home. Many smaller HMOs and poorly converted flat HMOs are currently unlikely to be reached by local authorities at all because they are not included in mandatory licensing.

9.3 The potential for a new approach

There is scope for current and planned DECC and DCLG policies and programmes to work much better together to reach HMO landlords and promote higher standards – and there is an opportunity to be seized by government to make this happen.

In terms of the regulatory system put in place by the 2004 Housing Act we have found positive evidence of evolving local practice to use HHSRS and licensing to tackle cold and fuel poverty in new ways. The influence of DECC’s PRS minimum Energy Efficiency regulations on that practice should not be underestimated – particularly in the more widespread recognition within enforcement practice that EPC F/G is not an acceptable standard for HMOs or other PRS homes.

As well as evolving local practice there is also evolution in national policy. Since the Election, DCLG has focused more on rogue landlords and poor conditions in the private rented sector.

In particular, DCLG is considering (see section 7 above) extending mandatory HMO licensing. Licensing is an important tool in tackling cold HMOs because councils can impose licence conditions that promote warmer homes and because they are required to check that the property is free of Category 1 hazards within five years of the licence being issued. Equally importantly, licensing opens up a line of communication between the council and the landlord. But mandatory licensing only reaches a small proportion of HMOs: according to DCLG data, only one in eight HMOs45 requires a mandatory licence. The proposed extension of mandatory licensing will help address cold in HMOs by:

Bringing Section 257 HMOs into licensing. Converted houses are the coldest homes in the housing stock (see box above right) and have not been well reached by previous energy

45 According to DCLG local authority housing returns (see footnote 8).


How many very cold S257 HMO are there?

The English Housing Survey shows that flats in converted houses are the least energy efficient homes in the UK stock. An astonishing twenty-six percent of these properties have Category 1 health and safety hazards; 11% have a category 1 excess cold hazards – more than twice the rate in the rest of the stock*. A subset of these converted flats – probably the worst subset - will meet the official definition of a section 257 HMO: being situated in a building where more than a third of the flats are privately rented and where conversions do not meet the standards of the 1991 building regulations.

We have no data on how many S257 HMO there are, though DCLG have asked for evidence on this in their consultation on extending mandatory licensing. Respondents to our survey said that these were the second largest part of their HMO stock.

We suggest that a research priority for DECC and DCLG should be to assess numbers of S257 HMO and energy efficiency condition within these buildings.

*English Housing Survey Profile of English Housing 2012 Ch. 3, Tables 3.3 & 3.9

efficiency programmes. Licensing of these homes – particularly if energy standards are explicitly included in licensing conditions – could have a significant impact.

HMO residents will benefit from such additional requirements as councils include as licence conditions – and our research shows councils are increasingly likely to include energy standards in licensing condition.

Ensuring that HMOs are subject to HHSRS inspections. Improving data about HMOs. Better monitoring of HMOs by local authorities will help in the

planning and delivery of programmes to support HMOs landlords and tenants.

Are tenants paying their landlord for energy getting a fair deal?

Landlords usually include energy bills in rent for HMOs accommodation – sometimes with a usage cap. Particularly in areas of high demand and low choice for tenants the implied cost for energy in these arrangements should be reviewed. It’s likely that where a usage cap is applied landlords are bound by energy resale rules, but even where they are not there are questions about whether a fair charge is being made. We also found that landlord sub-metering still occurs in some HMOs – probably in the areas of very low cost and low quality bedsit and S257 HMOs. It’s hard to be sure that landlords are not overcharging tenants and the arrangement can be difficult and embarrassing for tenants. We recommend Ofgem should review fixed charging and sub-metering for energy in shared housing and other private rented situations to help ensure that tenants are getting a fair deal.


9.3.1Smoothing the regulatory landscapeAs our diagram shows below there is already a powerful set of policies that could work together effectively to regulate cold and energy inefficiency in HMOs. But the delivery of these policies is currently disjointed and subject to local variation. The boxes and our recommendations note how these existing policies can be made to be more mutually reinforcing through the steps we describe below.

Rent Smart Wales

In Wales, landlord licensing and the new Rent Smart Wales scheme offers a separate opportunity to reach and engage with HMOs landlords, working alongside the Housing Act 2004 regulations. Mandatory training for managers of rented properties offers an opportunity for focused messaging around energy efficiency issues.

EPCs at point of letting HMO units

DCLG guidance needs to require EPCs at point of letting HMOs units. To do so will close a loophole that could limit impact of minimum energy performance standards in HMOs (because without an EPC the regulations will not be triggered). The landlord associations do not object to EPCs for HMOs units, and the legal adviser to the Residential Landlords Association.

New standards for heating and insulation in HMOs

At local level some councils are using Housing Act powers to set standards and guidance for insulation and heating in licensed HMOs. There are currently no national standards around heating and insulation within HMOs management regulations or facilities standards but arguably these could be introduced. Whether through guidance to councils or new national regulations (facilities or management standards


for HMOs) we suggest that nationally we should be looking to see environmental health requiring minimum standards for HMOs as follows:

Have gas central heating with room controls or controllable storage heaters with boost facility; programmable direct electric heating only to be considered in very highly insulated properties.

Have a basic level of insulation: draught proofing, loft insulation, cavity wall insulation and insulated rooms in roofs (as appropriate).

Secondary glazing or double glazing.

HHSRS Operating Guidance

At the same time as promoting these standards within HMOs licensing and/or HMOs management, DCLG should update HHSRS Operating Guidance to ensure that EHO practice is to consider heating cost as well as adequacy in assessing Category 1 excess cold hazards.

Through HHSRS Operating Guidance, DCLG should also ensure that EHO practice is to recognise the lowest (F&G) banded EPC homes as likely to pose a category 1 excess cold hazards. Official documents since the establishment of HHSRS have recognised SAP 35 (close to the E/F boundary) as a proxy for presence of an excess cold hazard.46 As such it is reasonable to expect that local authorities should be inspecting all rented homes in F&G bands for excess cold – in line with their duty to monitor the housing stock for hazards and inspect premises where hazards are likely to be present. We are pleased that local authority practice is moving in this direction – even including EPC “E” homes as likely to pose a risk - but national guidance needs to drive consistent action and encourage and highlight proactive approaches to enforcement. Better alignment between Trading Standards (who hold the responsibility for EPC enforcement) and housing health and safety could drive this practice – this is particularly an issue that needs to be addressed in non-unitary authorities47.

EPC Assessment Methodology for larger HMOs

There is confusion over energy assessments for bedsit-type HMOs. DECC need to work with DCLG to provide guidance on how EPCs should be carried out for these properties. This is an issue that has limited inclusion of HMOs in ECO schemes. Future ECO programmes are likely to revert to a deemed score approach rather than requiring full EPC assessments. Ofgem need to ensure that deemed scores are calculated for measures installed in HMOs-style properties.

46 Local authorities have a duty to arrange for an inspection of any premises to determine whether there is a Category 1 or 2 hazard following a well-founded complaint or for any other reason that the authority considers appropriate. If a Category 1 hazard is found to exist, the local authority should then take action to ensure the hazard is removed.47Where trading standards sit at county level while housing health and safety is delivered at district level.


HHSRS and PRS Minimum Energy Efficiency Standards

It is essential that minimum energy efficiency performance standards do not undermine HHSRS enforcement in the coldest homes. PRS regulations introduced through the Energy Act 2011 need to recognise that the 2004 Housing Act takes precedence in regulating action on energy efficiency in the homes where there is a cold hazard. The PRS regulations and the guidance must be explicit in referencing landlords’ existing responsibilities and ensuring the enforcement of a Category one or two hazard for cold does have to be rectified and – in line with the Housing Act - paid for by the landlord before any of the proposed exemptions referenced in the regulations apply.

The Fuel Poverty Strategy states that – by 2020 – no fuel poor home will be living in an F or G banded home. Despite the difficult nature of this stock, the Government has the right statutory frameworks in place that can make that happen in HMOs: we strongly recommend it makes the necessary adjustments to guidance and secondary regulations to ensure the E target is reached in the homes that house many of Britain’s most vulnerable people.


Appendix 1 – Local Authority Housing Returns data on HMO in England

Page | 43

Appendix 2 – Literature Review

Literature Review – aims and methodology

The aim of the literature search was to identify recent (2014/15) developments in national policy, local authority activity and landlording practice relevant to the issues of fuel poverty and energy efficiency in HMO. We also aimed to identify any new research studies providing insight into energy and energy efficiency issues in HMO – beyond those identified in the Future Climate/eaga charitable trust/University of Manchester HOME (HMO and energy efficiency policy) study last year.

It is proposed that this should be regarded as a first stage literature review to be developed as new and unpublished data sources are identified from the questionnaire and interviews.

It should be noted that HMO, and particularly cold and fuel poverty in HMO are a marginal topic for policy makers, housing academics and even in the professional landlord press. To some extent the lack of focus on this issue is a significant finding in itself; for example as we note below there is more press coverage of - and local authority activity in regard to - fire risk in HMO, even though death-rates from fires in HMO may be lower than those caused by excess cold48.

The literature review involved:

Review of recent published DCLG policy documents49 relating to HMO Review of Welsh Government policy documents relating to HMO particularly in light of PRS

reforms in Wales Review of latest DCLG Housing data, English Housing Survey, Stats Wales data and recent

Welsh Government report into HMO stock – including some analysis of this data, reported in detail in Appendix A & B

Search through landlord press and advice websites (2014/2015) Trawl of some relevant NGO and housing websites General web-searches using key words Academic literature search using relevant key words

Note the academic literature search did not find any new material beyond that identified in the bibliography to the 2014 HOME study.

Bringing together the insight gathered, the insight gained can be classified into:

1. Policy developments (national – England) 2. Policy developments (national – Wales)3. Local developments – local authority regulation of HMOs4. Landlording experience and practice5. New research and insight into the HMO stock and the lived experience of HMOs – see also

Appendix A & B

Findings

48 ODPM 2006 HHSRS Operating Guidance supports this statement

49 No specific review of DECC publications/statements was undertaken as both NEA and Future Climate are closely involved in DECC policy discussions and are aware of the key aspects of current energy efficiency policy and thinking impacting on HMOs.Page | 44

Key findings/issues arising

Parliamentary Briefing on History of Housing Act and HHSRS including policy developments(dated March 2015)

“This note briefly explains the old Housing Fitness Standard and the reasons for its replacement in 2006 with the Housing, Health and Safety Rating System before giving an overview of how the new HHSRS works. The HHSRS enables environmental health officers to assess housing conditions and take enforcement action in certain circumstances”http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN01917

Government’s tenants guidance on safe homes (March 2015)

Renting a safe home – a guide for tenantshttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/412913/150309_How_to_rent_a_safe_home__final_.pdf

Government (DCLG) proposals to extend mandatory licensing of HMO to a wider range of house-types and situations- including S257 properties

Official consultationhttps://www.gov.uk/government/consultations/extending-mandatory-licensing-of-houses-in-multiple-occupation-and-related-reforms

Landlords’ Association Response (RLA) Dec 2015: http://news.rla.org.uk/rla-criticises-uo-licensing-plan-2/

New requirements for property information and reinforcement of EPC requirements through revised rules around Section 21 evictions with some online discussion as to whether this now requires EPCs in HMO situations – though this seems unlikely.

The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 (text of legislation)http://www.legislation.gov.uk/uksi/2015/1646/pdfs/uksi_20151646_en.pdf

Explanation of legal changes here from Guild of Residential Landlords Prescribed Legal Requirements Before Serving A Section 21 Notice : http://www.landlordsguild.com/prescribed-legal-requirements-before-serving-a-section-21-notice/

Discussion of EPC requirements (including in relation to HMO) on “Landlord Law” blog: http://www.landlordlawblog.co.uk/2015/09/17/section-21-the-new-rules-energy-performance-certificates/

Licence conditionsHyndburn case – In Hyndburn Council, landlords successfully challenged the requirement for production of EPCs as an HMO licence condition as part of a wider tribunal appeal against aspects of a selective licence regime. The council successfully challenged the Tribunal’s judgement on some aspects of the licensing proposals but did not attempt to have the EPC condition reinstated. The case

Report on original appeal by landlord association:Agent wins landmark ruling in licensing case Property Industry Eye July 2014http://www.propertyindustryeye.com/agent-wins-landmark-ruling-licensing-case/

Report on upper tribunal judgement Sept 2015:http://www.civitaslaw.com/news/2015/9/21/matthew-paul-successful-in-upper-tribunal-over-selective-licensing-area-conditions.aspx

Report on scheme from Hyndburn Council including statement that original licensing scheme no longer includes EPCs (dated 2014?):http://democracy.hyndburnbc.gov.uk/documents/s591/Hyndburn

Page | 45

http://democracy.hyndburnbc.gov.uk/documents/s591/Hyndburn%20Selective%20Licensing%20Scheme%20Review.pdf

http://www.civitaslaw.com/news/2015/9/21/matthew-paul-successful-in-upper-tribunal-over-selective-licensing-area-conditions.aspx

http://www.civitaslaw.com/news/2015/9/21/matthew-paul-successful-in-upper-tribunal-over-selective-licensing-area-conditions.aspx

http://www.propertyindustryeye.com/agent-wins-landmark-ruling-licensing-case/

http://www.propertyindustryeye.com/agent-wins-landmark-ruling-licensing-case/

http://www.landlordlawblog.co.uk/2015/09/17/section-21-the-new-rules-energy-performance-certificates/

http://www.landlordlawblog.co.uk/2015/09/17/section-21-the-new-rules-energy-performance-certificates/

http://www.landlordsguild.com/prescribed-legal-requirements-before-serving-a-section-21-notice/

http://www.landlordsguild.com/prescribed-legal-requirements-before-serving-a-section-21-notice/

http://www.legislation.gov.uk/uksi/2015/1646/pdfs/uksi_20151646_en.pdf

http://news.rla.org.uk/rla-criticises-uo-licensing-plan-2/

http://news.rla.org.uk/rla-criticises-uo-licensing-plan-2/

https://www.gov.uk/government/consultations/extending-mandatory-licensing-of-houses-in-multiple-occupation-and-related-reforms

https://www.gov.uk/government/consultations/extending-mandatory-licensing-of-houses-in-multiple-occupation-and-related-reforms

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/412913/150309_How_to_rent_a_safe_home__final_.pdf



http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN01917

does though touch on issues of discretion by councils to use licence conditions to manage property condition.

New Housing and Planning Bill tightens requirements about who can qualify for an HMO licence

In Manchester council has tightened requirements to belong to an approved redress scheme as HMO licence condition

%20Selective%20Licensing%20Scheme%20Review.pdf

Link to Consultation on “rogue landlords” – led to Housing and Planning Bil provisionshttps://www.landlordtoday.co.uk/breaking-news/2015/11/dclg-rogue-landlords-consultation-outcome-published

Housing and Planning Bill texthttp://www.publications.parliament.uk/pa/bills/cbill/2015-2016/0075/16075.pdf

Council's new powers to fine agents flouting redress schemesLandlord Today Nov 2015https://www.landlordtoday.co.uk/breaking-news/2015/11/councils-new-powers-to-fine-agents-flouting-redress-schemes

LICENSINGSeveral new additional licensing schemes for HMO are reported around the country accompanied by statements in at least one case from RLA arguing that such schemes are now unnecessary given government proposals to extend mandatory licensing.

National Landlords Association has published a (not entirely unhelpful) review and set of recommendations around licensing schemes – confirming rising trend for additional licensing. Notes that use of discretionary licensing depends on political complexion of council.

For example:Rhyl (April 2015) https://www.denbighshire.gov.uk/en/business/licences-and-permits/HMO-licence.aspxWorcester (March 2015) : http://www.worcester.gov.uk/additional-licensing-of-HMOCamden (Dec 2015): http://news.camden.gov.uk/new-landlord-licensing-scheme-to-raise-private-housing-standards

[Note what diverse types of communities these are!!]

Report on RLA objections to Camden additional licensing – June 2015:https://www.landlordtoday.co.uk/breaking-news/2015/6/rla-urges-camden-to-reconsider-HMO-licensing

NLA Licensing Report - http://www.landlords.org.uk//quidproquo/licensing-report Feb 2015

Heat Metering and Billing RegulationsNew regs take effect from Dec 205 – likely to impact bedsit landlords in a limited way - need to register with NMRO and maybe fit TRVs...

Summary from a lawyerLondonpropertylicensing website Nov 2015http://www.londonpropertylicensing.co.uk/new-regulations-heating-provision-HMO

Welsh Govt Review of HMOWelsh government has carried out a review of HMO – focused on problematic concentrations – very

Welsh Assembly GovtHouses in Multiple Occupation: Review & Evidence Gathering Apr 2015Provides a discussion of concentrations of HMO in Wales - no explicit discussion of cold/HMO issues

Page | 46

http://www.londonpropertylicensing.co.uk/new-regulations-heating-provision-hmos

http://www.londonpropertylicensing.co.uk/new-regulations-heating-provision-hmos

http://www.landlords.org.uk//quidproquo/licensing-report

http://www.landlords.org.uk//quidproquo/licensing-report

https://www.landlordtoday.co.uk/breaking-news/2015/6/rla-urges-camden-to-reconsider-hmo-licensing

https://www.landlordtoday.co.uk/breaking-news/2015/6/rla-urges-camden-to-reconsider-hmo-licensing

http://news.camden.gov.uk/new-landlord-licensing-scheme-to-raise-private-housing-standards

http://news.camden.gov.uk/new-landlord-licensing-scheme-to-raise-private-housing-standards

http://www.worcester.gov.uk/additional-licensing-of-hmos

http://www.worcester.gov.uk/additional-licensing-of-hmos

https://www.denbighshire.gov.uk/en/business/licences-and-permits/hmo-licence.aspx

https://www.denbighshire.gov.uk/en/business/licences-and-permits/hmo-licence.aspx

https://www.landlordtoday.co.uk/breaking-news/2015/11/councils-new-powers-to-fine-agents-flouting-redress-schemes

https://www.landlordtoday.co.uk/breaking-news/2015/11/councils-new-powers-to-fine-agents-flouting-redress-schemes

http://www.publications.parliament.uk/pa/bills/cbill/2015-2016/0075/16075.pdf

http://www.publications.parliament.uk/pa/bills/cbill/2015-2016/0075/16075.pdf

https://www.landlordtoday.co.uk/breaking-news/2015/11/dclg-rogue-landlords-consultation-outcome-published

https://www.landlordtoday.co.uk/breaking-news/2015/11/dclg-rogue-landlords-consultation-outcome-published

http://democracy.hyndburnbc.gov.uk/documents/s591/Hyndburn%20Selective%20Licensing%20Scheme%20Review.pdf

useful in understanding geography of Welsh HMO (see below) but not cold or other condition issues. This based on an LA survey with some very similar questions to the ones we are going to ask.

http://gov.wales/docs/desh/research/150505houses-in-multiple-occupation-HMO-final-report-en.pdf

Rent Smart Scheme in WalesThe Welsh government is introducing the Rent Smart Scheme requiring registration of all landlords and training of those who manage properties. This sits alongside HMO licensing.

https://www.rentsmart.gov.wales/en/

Welsh Assembly Govt Clarification on rent smart vs HMO licensinghttps://www.rentsmart.gov.wales/en/faqs/

PenaltiesExtensive press/online reports of large fines being levied against HMO landlords in England for non-compliance with licensing and/or safety standards – usually in regard to fire risk (though some references to cold and damp)

Easy to find examples in landlord press.

https://www.landlordtoday.co.uk/breaking-news/2015/12/two-brighton-unregistered-HMO-landlords-fined

http://www.landlordzone.co.uk/news/60000-fine-couple-breaching-HMO-rules

Investing in HMOSeveral press articles about the relatively high returns that landlords can make from investing in HMO, with HMO presented as a better investment than other types of buy-to-let property.

One press reports of a new survey showing unprecedented high need/demand for student housing in high quality HMO

Surge in HMO Investment in the North West Landlord News Aug 2015https://landlordnews.co.uk/surge-in-HMO-investment-in-the-north-west/

Buy-to-let: creating bedsits for 20pc returns is just a response to the marketDaily Telegraph, Jul 2014http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10990419/Buy-to-let-creating-bedsits-for-20pc-returns-is-just-a-response-to-the-market.html

Useful article with data on unprecedented demand for student HMO accomm including analysis of demand drivers. Property Reporter Nov 2015.

http://www.propertyreporter.co.uk/landlords/student- accomodation-demand-reaches-all-time-high.html

Gender and sharingInteresting research from Spareroom.com on gender differences in the experience of rented housing

Extensively covered in the press, one example below. July 2015https://landlordnews.co.uk/females-living-in-shared-housing-pay-more-rent/

Page | 47

https://landlordnews.co.uk/females-living-in-shared-housing-pay-more-rent/

http://www.propertyreporter.co.uk/landlords/student-accomodation-demand-reaches-all-time-high.html

http://www.propertyreporter.co.uk/landlords/student-accomodation-demand-reaches-all-time-high.html

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10990419/Buy-to-let-creating-bedsits-for-20pc-returns-is-just-a-response-to-the-market.html



https://landlordnews.co.uk/surge-in-hmo-investment-in-the-north-west/

http://www.landlordzone.co.uk/news/60000-fine-couple-breaching-hmo-rules

http://www.landlordzone.co.uk/news/60000-fine-couple-breaching-hmo-rules

https://www.landlordtoday.co.uk/breaking-news/2015/12/two-brighton-unregistered-hmo-landlords-fined

https://www.landlordtoday.co.uk/breaking-news/2015/12/two-brighton-unregistered-hmo-landlords-fined

https://www.rentsmart.gov.wales/en/faqs/

https://www.rentsmart.gov.wales/en/

http://gov.wales/docs/desh/research/150505houses-in-multiple-occupation-hmo-final-report-en.pdf

http://gov.wales/docs/desh/research/150505houses-in-multiple-occupation-hmo-final-report-en.pdf

Findings from data (EHS , DCLG and StatsWales Housing Returns data)

Latest DCLG LA Housing returns (see Chart at Appendix A) (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/445385/Local_Authority_Housing_Statistics_dataset_2013-14_rev_Mar15.xlsx)

o DCLG Housing returns continue to point to major concentrations of HMO in six types of community (see analysis in Appendix 1): London boroughs; seaside towns; university towns; east of england new migrants; wealthy southern and heritage towns; regional cities.

o London continues to account for over 40% of all HMO (195,000)o The DCLG Housing returns need to be treated with a degree of caution and it is not

clear on what basis local authorities are estimating numbers of HMO in their area. Some data is clearly erroneous – eg Lambeth reports only 1.9% HMO while neighbouring Southwark reports 18.4%.

o Total number of HMO in England is estimated to be at 483,868 (all HMO) up from 426,834 in Apr 2011 (historical data here - https://www.gov.uk/government/collections/local-authority-housing-data#2010-to-2011 - so worth also looking at intervening and earlier years).

In Wales, there are 18,179 HMO estimated in 2013/14 in LA returns with declining trend since 2006/2007 (earliest year reported) – 19849 estimated in 2011 https://statswales.wales.gov.uk/Catalogue/Housing/Hazards-and-Licences/housesinmultipleoccupation-by-area

English Housing Survey identifies HMO but their test does not align with the Housing Act 2004 HMO definition – seems to only be based on a definition of a bedsit. Accordingly they report very low numbers of HMO in the stock – only 4 cases out of 12,000 homes surveyed (which is not enough to estimate numbers across the stock).

Using the EHS data I have been able to identify homes that are not flagged as HMO but which seem to meet the Housing Act 2004 definition (see Section 1 above) - with three or more people from at least two unrelated families sharing a private rented home. This is still a small sample but starts to give useful indicative data on the condition of shared homes:

House-type All householdsShared (3 or more people, 2 fams,

PRS, unrelated tenants sharing)

1 “detached house or bungalow 22.23% 5.03%2 “semi-detached” 29.11% 19.24%3 “terrace/end of terrace” 28.16% 53.19%4 “purpose built flat/maisonette” 16.02% 16.35%5 “flat conversion/rooms” 3.71% 6.19%6 “caravan or boat” 0.17%7 “other” 0.09%8 “non self contained” 0.50%

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Appendix 3: List of interviewees

Meetings:

Attended meeting of around 20 environmental health officers from Midlands and North West at a Chartered institute of Environmental Health private sector housing group meeting in Stockport – Jan 2016.

1-1 Interviews (staged Jan-March 2016):

Adrian Chowns, Manager of HMO Enforcement Team, Oxford City Council

John Kolm-Murray, Chair, Association of Local Energy Officers and Islington Council

Paul Fitzgerald, Chair, National HMO Network (and consultant Environmental Health Officer)

Nigel Winnan, Connections Manager, Wales and West Utility

Bob Mayho, Policy Officer, Chartered Institute of Environmental Health

Peter Snell, Environmental Health Practitioner

Paul Rotherham, Legal and Policy Officer, private sector housing, Sheffield City Council

David Shiner, Domestic Energy Efficiency Manager, Coventry City Council

Ellen Spencer, Private Sector Housing Team Leader, Norwich City Council

Jo Brookman Lloyd, Poverty Intervention Officer, Pembrokeshire Communities First

Informal conversations and email exchanges:

Neil Jennings, National Union of Students

Jenny Holland, UK Association of the Conservation of Energy

Jenny Wigley, Barrister specialising in public law, No5 Chambers, Birmingham

Dr David Smith, Legal Director, Residential Landlord’s Association

Despite contacting some HMO landlords who had completed our survey, we were not able to get any to agree to interview.

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