Houses of Multiple Occupation

Background This report is prepared by Dr Steve Iafrati, part of the Institute for Community Research and Development at the University of Wolverhampton.

This is an interim report detailing some of the findings to date. Current research within the Institute for Community Research and Development examining the impact of houses of multiple occupation (HMO) is ongoing and we are very grateful to the Sir Halley Stewart Trust for their financial support.

Houses of Multiple Occupation

The research is based in Telford and Wolverhampton, but is also informed by meetings in other local authority areas where there is a hope of expanding the research.

Reducing bad outcomes

The Institute for Community Research and Development works with and for our local communities to deliver effective community-based transformational projects. Drawing on a history of collaborative research across our faculties of Social Science, and Health, Education, and Well-being, ICRD uses interdisciplinary expertise to effect positive change in local communities, increase knowledge, and shape local and national policy.

April 2019

Dr Steve Iafrati For more information, please contact:

Institute for Community Research and Development

Dr Steve Iafrati

University of Wolverhampton

s.iafrati@wlv.ac.uk

Or, for more information about the Institute for Community Research and Development, please visit https://www.wlv.ac.uk/research/institutes-and-centres/icrd/

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Summary

What is the problem?

This report is based on findings to date from research with Houses of Multiple Occupation (HMO) tenants in Wolverhampton and Telford. Thanks to funding from the Sir Halley Stewart Fund, the research is now going to be expanded to include input from professionals working with HMOs and to also include a wider geographical area. Underpinning this research is existing research across the country as well as attending HMO working groups in Wolverhampton and Telford.

HMOs are defined by government as accommodation with a private bedroom and shared facilities such as bathroom, kitchen and, at times, living area. This excludes purpose built flats and properties such as nursing homes. Despite the statutory definition, most people working close to HMOs operate a ‘common sense’ understanding of HMOs as houses with non-familial tenants with shared facilities, regardless of the number of storeys or tenants. Problematically, many local authorities do not know how many HMOs operate in their area. In places, it can be that local authorities only know of 20% of HMOs actually operating.

From these sources, evidence suggests that problems associated with HMOs emanate from three areas: (i) ‘rogue landlords’ who have little regard for the quality of the property or outcomes of their tenants, (ii) ‘out of their depth’ landlords who have become an HMO landlord without fully understanding the responsibilities involved, and (iii) vulnerable tenants whose behaviour may cause harm to themselves and others.

The problems associated with HMOs, in summary, are: 

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For service providers, disproportionate amounts of resources spent on remedying problems associated with HMOs

During the last decade, there has been a rapid increase in the number of houses of multiple occupation (HMOs) across the West Midlands, which mirrors a national trend.

For communities, the growth in numbers of HMOs can stigmatise areas and limit economic regeneration

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For vulnerable tenants, living in HMOs can produce bad outcomes for their well being and mental health as well as contributing to anti-social behaviour

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For the future, large concentrations of HMOs have been associated with modern day slavery, sexual exploitation, and organised crime

Increasingly, policy responses to HMOs have been based on enforcement and planning controls to address the rogue landlords. This is, without question, necessary. However, this only addresses one aspect of the problems. In doing so, it risks not only grouping the out of their depth landlords with the rogue landlords, but it also does little to address the support needed by vulnerable tenants.

The central argument of this research is that it is important to develop strategies that address all three causes of bad outcomes associated with HMOs.

Predominantly located within the low cost private rented sector, HMOs are home to a disproportionate number of vulnerable tenants.

This includes: 

People with mental health issues

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People with alcohol and substance abuse problems

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People who were formally homeless

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People on very low incomes

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Prison leavers

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Those formerly living in care

For many of these people, they face duel problems of limited housing supply and housing unaffordability. This makes them more likely to live in HMOs, which are not necessarily suitable for their needs. Furthermore, cuts to welfare and support services mean that they are less likely to receive services needed to address their personal challenges.

A strength of the HMO working groups is the multi-agency composition that allows the development of solutions that not only continue to address the role of landlords, but also to develop a personcentred approach to mitigate tenant vulnerabilities.

Steve Iafrati 3

The result is that many of the most vulnerable people are living in some of the worst housing that has a potential to exacerbate their problems.

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Evidence and data

One of the key problems for this research was to understand how to balance the regulation and enforcement strategies of HMOs with also recognising how to support and empower some of the most vulnerable tenants.

The future risk of a growing HMO sector featuring a concentration of vulnerable tenants has been seen in other parts of Britain. Large numbers of vulnerable people hosed within HMOs, some of which are ‘off the radar’ has enabled growth in modern day slavery, sexual exploitation, and gang activities.

Between 2010 and 2017, the number of HMOs nationally grew from between 236,000 and 379,000 to over 500,000. Most of this increase has come through conversion of previously domestic two-storey residences.

This is an ongoing piece of research and is currently being expanded to include other local authority areas.

Interestingly, evidence suggests that local authority area responses vary significantly and there is a significant opportunity for greater sharing of good practice and ways of working.

This is likely to be a significant under-estimate of the real number of HMOs, and might be less than a quarter of the real figure. Even with the figure of over 500,000 HMOs nationally, if there were four people per HMO, this would put the HMO population at 2,000,000. with many HMOs being larger, the 2,000,000 figure could be seen as a conservative estimate.

The government recognises that this encourages ‘opportunistic rogue landlords who feel the business risks for poorly managing their accommodation are outweighed by the financial returns.’

This research has included attending HMO working groups in Telford and Wolverhampton to understand the nature of the problem and potential solutions.

HMOs are mainly located in areas with lowest income levels, highest levels of social problems and highest demand for welfare. The House of Commons recognises that ‘large numbers of HMOs can present difficulties for the regeneration of an area, as their poor physical condition can put off investors.

Many people that live in HMOs often stay on a short-term basis, which can make it difficult to get resident support for local regeneration projects’.

Currently, it seems unlikely that there will be a reduction in the growth of HMOs in the near future.

HMOs are not new in terms of housing, however, their recent rapid growth in numbers has prompted renewed concerns.

Behind this expansion in the number of HMOs lies: 

Insufficient affordable housing supply. Between 2010 and 2017, completion of affordable rented properties fell from 61,090 per year to 41,530 per year. This means a declining proportion of new properties are affordable

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Decreased government confidence in social housing. Between 2010 and 2017, social rent housing completions fell from 35,950 per year to 5,380 per year.

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Problems of housing unaffordability for those in secure employment makes it harder for them to move up the housing ladder and free up affordable properties

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Growth in low paid, precarious work, in-work poverty and welfare reforms such as benefit freezes and a cap on Local Housing Allowance.

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Government reliance on policies encouraging home ownership has produced limited benefits

The problems of this are twofold: 

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It makes certain tenants more vulnerable to exploitation from rogue landlords who have little interest in the neighbourhood and whose poorly maintained and managed properties can stigmatise certain neighbourhoods It also makes it more likely that people will continue harmful patterns of behaviour.

This might be personally harmful to their mental/physical health, but also harmful to neighbourhoods, such as public drinking, ant-social behaviour and drug abuse.

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Amidst the growth in numbers of HMOs and their role in housing vulnerable tenants, there has been a growing trend of landlords advertising out of area to attract tenants. These tenants have limited or no link to the area, limited familial support or

Legislation and policies regarding HMOs might only address some of the problems identified within the HMO working groups and do not comprehensively recognise root causes.

Future risks to neighbourhoods

Within government policy, the welfare of tenants is only understood as part of a broader remit linked to health and safety and property management.

Part of the underlying problem is that there is a growing concentration of HMOs, as well as other forms of low cost private rented accommodation, in certain neighbourhoods.

Additionally, with a shortage of affordable housing and limited social housing, it is a sellers’ market with a captive market of those with limited other housing choices, which further reduces the incentive for private landlords to invest.

Essentially, the cost of investing in a property is greater than the benefits as there is no potential to increase rents accordingly.

The context of economic decline coupled with specific housing problems means that there is little incentive to invest property maintenance and improvement.

Typically associated with downward economic cycles are worse health outcomes, worse education outcomes, increased acquisitive crime, and anti-social behaviour.

Currently, most policy is focused on rogue landlords. This is problematic because: 

It does not necessarily recognise the diversity of landlords - some are rogue landlords that need enforcement and others are ‘out of their depth’ and need education and support

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It only addresses one of the sources of bad outcomes illustrated above. For tenants with multiple and complex needs, early intervention and support will also lessen bad outcomes for the tenants and communities within which they live.

This has the potential to create growing numbers of people with the lowest disposable incomes in these neighbourhoods, many of whom will be made even poorer by cuts to benefits such as Local Housing Allowance.

The movement of those on the lowest incomes away from the South-East of England to areas such as the West Midlands will exacerbate this trend.

The overall impact can be to limit the potential for regeneration, reduce local economic demand, make investment less likely, and negatively impact house prices.

In doing so, this will encourage the kind of economic opportunism recognised by the government that includes further conversion of domestic properties into HMOs.

This will be partly enabled by those with the greatest economic resilience moving away from these areas - which perpetuates a downward economic cycle.

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Working with partners

Policy responses Within HMOs, there is a high concentration of vulnerable and marginalised tenants. For these tenants, HMOs have been described as run by ‘landlords who openly targeted extremely vulnerable renters’, housing at the ‘bottom end’, and ‘housing of last resort’. HMOs have been identified as associated with: 

Crime

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Anti-social behaviour

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Environmental problems

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Worsening physical and mental health

As well as: 

Unsafe and poorly maintained properties

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Rogue landlords

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Geographical concentrations of HMOs in certain neighbourhoods

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Unchecked growth in the number of HMOs

In response to these concerns, policy has increasingly centred on: 

Increased licensing and consultation

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Stronger enforcement powers

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Fines for rogue landlords

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Planning regulations, such as Article Four Guidance, to limit further HMOs

further exacerbate their problems and any increased homelessness could make support services harder to deliver. City of Wolverhampton council recognise that his could ‘risk displacement of any issues to other areas’ and Telford and Wrekin council believe that this could have a detrimental impact on the most vulnerable. ii)

Despite many of the problems associated with HMOs being directly linked to tenants’ vulnerabilities and personal challenges, the policy responses focus overwhelmingly on the landlords and management of HMOs.

However, whilst recognising that problems associated with HMOs have a wide range of causes and context, policy responses have mainly focused on enforcement and regulation. Little attention has been paid to understanding the needs of vulnerable tenants or understanding how their lived experience of ‘housing of last resort’ might be improved so that it does not exacerbate their problems. This means not only looking at the housing itself, but the support they require to manage their tenancies and flourish.

This is not to say that there is no need for enforcement, this will always be important and vital.

Furthermore, it is not to say that all problems linked  Government led consultations on further to tenant behaviour will be addressed through restrictions greater support. Behaviour such as drug dealing This policy approach has created two key problems: and criminal activities such as modern day slavery and sexual exploitation will always require i) It could potentially limits the number of HMOs intervention from the criminal justice system and in an area. For those with the fewest hosing other partners. choices and limited ability to access However, it might reduce bad outcomes for those in alternative housing, fewer housing choices might lead to increased homelessness and/or most need of support, reduce expensive crisis ‘sofa surfing’. For those who might be classed interventions, and reduce demand on frontline as being vulnerable, this has the potential to services that can be redirected.

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The research to date has been to work with a range of partners to identify how bad outcomes from HMOs can be reduced. The research is also an ongoing project that is beginning to include new geographical areas and more interviews with HMO tenants.

The evidence base comes from: i.

Attending HMO working groups in Telford and Wolverhampton

ii.

Individual meetings with officers working directly with HMOs

iii.

Interviews with 15 HMO tenants from separate properties

g with A key element of workin of HMOs has been the role enforcement officers Local authority housing  officers, including private rented sector teams 

ams

Housing enforcement te

One of the noticeable elements of the research is the number of agencies that have an interest in HMOs. This includes...

landlords working within There exists a number of t to ve a strong commitmen the HMO sector who ha able tenants, but also to not only housing vulner s have good outcomes ensure that these tenant dlords, especially those lan or ct se y ar nt lu Vo  vulnerable tenants, working with potentially such as prison leavers , often working in Private sector landlords  local authorities and close collaboration with other agencies 

Housing associations

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The local experience “People try to break into my room. People with drink problems and schizophrenia. My daughter has to come round to sort out the problems. But I am stuck. I cannot speak to the landlady. She has kicked out tenants for complaining… The bathroom has no safe lock. The kitchen and washing machine is too dirty. No hot water or heating for days. It’s got worse in the last few years. I know lots of people in house shares and none feel safe.”

is nts, advice and guidance For many vulnerable tena at ate some of the issues th vig na em th lp he to al nti esse arise ch as advice and guidance, su g in id ov pr s cie en Ag  Citizens Advice GPs Health providers, such as   

 

Important in the research was to meet with tenants to gain an insight into the lived experiences of HMOs as well as evidencing issues raised by partners at the HMO working groups. For many service providers, key issues were the disproportionate amount of resource allocation as well as the bad outcomes for the most vulnerable tenants.

“It’s where I live, but I wouldn’t say it feels like home”

Mental health services ort and interventions Services providing supp e and mental health regarding substance abus rmer prisoners Charities working with fo those likely to be overth wi g in rk wo ns tio sa ni Orga m ch as refugees and asylu represented in HMOs, su

HMOs are not suitable for many of those whose only housing choice is an HMO. Most service providers did not see HMOs as being the problem. Though there was recognition that they are far from ideal and are indicative of broader housing problems. Many tenants interviewed stated that they did not feel a sense of ‘home’ in their HMO, as well as having feelings of insecurity and fear.

p meetings At the HMO working grou s who directly were a range of partner e outcomes of engage with the negativ vulnerable tenants   

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The police and fire service ams Anti-social behaviour te h Doctors and other healt professionals Social workers

These organisations have a combined wealth of qualitative and quantitative evidence relating to HMOs. The working groups are an excellent way of bringing this evidence together and could continue by being forums to develop strategic action plans and oversee their implementation.

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“I don’t feel safe. I share a house with young people, they sell drugs and I have been stopped [by the young people] from getting into the house… there’s always fighting, drug dealing, loud music and parties in the house.”

“I wait until they [the young people] have gone and then I leave the house. I leave early in the morning and come back late at night. I spend all day away. I just come back to sleep… if I don’t go out early, I can be stuck in my room all day.”

An older woman living alone and with mental health problems, typified responses when she spoke of a climate of fear in her house. Due to threats, violence and criminal activities such as drug dealing and burglaries, she was forced to leave her HMO early in the morning before anyone else was awake and stay away from the property until late at night. At that point, she would return solely to sleep before repeating this behaviour the next day. In effect, she was homeless by default during the day and this was having a negative impact on her mental health.

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“There are some nice people in the house sometimes. But a lot of them take drugs and I have been threatened by a drug dealer. I didn’t want to let him in the house… it’s not really safe… I get broken into two or three times a week and my food is stolen from the kitchen. There’s no lock on the cupboards and the garden is messy… [Increasingly] there are more bad tenants. They bully. There is more drug dealing.”

“I used to be homeless before living here. I used to sleep in [a local park]. I had problems after my mum and dad passed away... Now, I always pay my rent on time but my money [benefits] is not enough for the rent and I have to give the landlord more money... He [the landlord] says I am now in debt and cannot move out until I have paid the debt.”

Commonplace in the HMOs was drug dealing, parties, burglaries and fighting. There were also accounts of ‘good tenants’ being intimidated by ‘bad tenants’. For those interviewed, these were accepted aspects of HMO living. Feelings of fear and insecurity ran through the interviews, along with examples of bedrooms being burgled on a weekly basis, food stolen from the kitchen, and a woman who was fearful of using the shared bathroom.

Other tenants spoke of being in debt to the landlord as Local Housing Allowance did not cover all of the rent. Rents were usually in the region of £90 per week, with many tenants having to contribute approximately £10 per week from their benefits. Some did not know how much they were meant to be paying, why they were paying additional money, or how much they were in debt. One tenant was now being employed by his landlord to recover tenant debts.

“I have anxiety and learning difficulties. I don’t really go out... There’s only two foot next to the bed. It’s too small for a chair. Some days I just lie on the bed. There’s no sitting room… I have a lot of tablets. Angina, inhalers, that sort of thing. I am on anti-depressants. I’m on ESA. I can’t get up and down stairs very well, it’s difficult for me. So I just stay in my room really.”

“you get kids in the house, no one answers the door. We go in anyway and they are hiding in the wardrobe… If the tenant owes money, we take the TV or other stuff, even if it’s only £20 [of arrears].”

High numbers of people in HMOs and other forms of vulnerable accommodation have mental health problems. Many of these currently at risk being residualised in HMOs, which see these problems exacerbated.

“My panic attacks have got worse. I am alone and cannot socialise. It’s making my [mental health] problems worse.”

Providing support Despite the negative experiences of many HMO tenants, there were some positive outcomes. The research also involved speaking with tenants and staff working with vulnerable tenants in HMOs where the tenants were provided with support. Furthermore, the properties were well maintained and there was no fear that the landlord would evict tenants if they raised concerns.

HMO tenants interviewed are unlikely to report concerns because of (i) fear of reprisals from the landlord, (ii) having limited engagement with service providers, and (iii) being intimidated by other tenants. Other tenants spoke of staying in their rooms, too frightened to leave and worried to raise issues for fear of eviction. The threat of eviction was a genuine concern for many tenants who were unaware of their tenancy rights and there was significant anecdotal accounts of people being evicted.

“I’ve spent most of my [adult] life in prison. But not now. [The voluntary sector HMO landlord] helps keep me out of prison and I am now providing clean drug tests… I get support with filling in forms and benefit claims… We have house meetings every week and we can talk about what we need.”

“People try to break into my room. People with drink problems and schizophrenia. My daughter has to come round to sort out the problems. But I am stuck. I cannot speak to the landlady. She has kicked out tenants for complaining… The bathroom has no safe lock. The kitchen and washing machine is too dirty. No hot water or heating for days. It’s got worse in the last few years. I know lots of people in house shares and none feel safe.”

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Key findings

As with other HMOs, these properties housed people with multiple and complex needs such as being prison leavers, having mental health problems and histories of substance abuse. Additionally, there were tenants with histories of homelessness and domestic violence that meant that, as a cohort, they were comparable with other HMO tenants. However, they were distinctive by their good outcomes.

The staff and landlords in these HMOs understood the needs of their tenants and had a commitment to their tenants’ wellbeing.

Tenants spoke of how the HMO had a feeling of being a home as well as being a place of stability and support to help address personal challenges such as overcoming addiction and managing mental health.

“I have done some volunteering and then started an eight week [training] course. Then I started mentoring others. It’s hard when you have a criminal record, but I want to get a job and get a flat of my own.”

Support came in the form of helping tenants with benefit claims, advice on cooking and shopping, health advice, as well as organising regular house meetings. Furthermore, the properties were well maintained, which was beneficial to both the tenants and the local neighbourhood. The tenants, rather than feeling ‘warehoused’ in the HMO, were optimistic about the future and had plans for finding their own homes in the future. In addition, tenants were signposted to volunteering and training opportunities that would help move forward and address the challenges of being prison leavers.

Not surprisingly when dealing with a group of people with multiple and complex needs, there were still problems. One tenant had been caught with drugs and another tenant had broken into another tenant’s room. However, these issues were addressed immediately and the offending tenants were evicted. The outcome was that support for tenants was able to reduce the amount of problems and when problems did arise, the tenants felt sufficiently empowered to be involved in finding solutions. In the long term, this will produce better outcomes and reduce demand for crisis interventions.

This is a model that has also been replicated in other HMOs with positive outcomes. Operating a system of ‘floating support’, tenants’ needs are recognised and understood and there is a proactive system of providing support and guidance to vulnerable tenants.

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The HMO sector is an area of concern for many service providers and voluntary sector organisations

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These concerns are particularly related to demand for services, the impact of crisis interventions, resource allocation and cost

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Given the limited national political willingness to address the factors contributing to the expansion of the HMO sector, it can be presumed that it will continue to expand in the foreseeable future

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The HMO sector houses a disproportionate number of people who could be classed as being vulnerable or having multiple and complex needs, at a time when frontline services in areas such as mental health, substance abuse and social work are facing funding cuts

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The nature of the sector means that there will always be bad outcomes associated with HMOs, however, it is important to consider how these bad outcomes might be reduced

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It can be argued that bad outcomes emanate from three sources — (i) rogue landlords, (ii) ‘out of their depth’ landlords, and (iii) the behaviour of tenants with multiple and complex needs

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Currently, the increasing policy focus regarding HMOs is to focus on enforcement and planning controls

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This is important in order to address problems caused by rogue landlords

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However, it risks pulling the ‘out of their depth’ landlords into the category of rogue landlords and does not fully distinguish between landlords that are intentionally rogue and landlords that need education and support

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Furthermore, this policy approach does not recognise how tenants can be supported to achieve positive outcomes that subsequently place less resource and cost burden on service providers and the voluntary sector

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A rebalancing of policy to include more awareness of support alongside enforcement could lead to improved outcomes

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This will not solve all the bad outcomes associated with HMOs, but it could make a significant improvement in the shorter and longer terms as well as improving people’s lived experiences 16

Recommendations 

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From this research, and meeting with officers in other local authority areas, it is clear that there exists a variety of approaches and strategies for dealing with problems associated with HMOs Currently, there is limited sharing of best practice between local authorities or joint strategies/working that would cover multiple areas

Using the different recommendations below might improve bad outcomes associated with HMOs, especially if used together in a single strategy.

This could be beneficial to allow sharing of best practice, but it would also recognise that tenants and landlords can live and operate across different areas Without appropriate support, tenants’ needs can be exacerbated by living in an HMO, which for many of them represents unsuitable housing, though it is also recognised that there are few housing choices for many people

The interim recommendations are:

This was particularly evident for those with mental health problems, though is also applicable to tenants with multiple and complex needs

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This was further exacerbated by issues of debt, bullying, criminal activities in the HMO, and experiences of the welfare system

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The current cost of managing and responding to bad outcomes associated with HMOs is disproportionate relative to the size of the sector

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Looking forward, and recognising that the number of HMOs is likely to increase, it is important to also recognise potential future threats 

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The recommendations below are based on a ‘spend to save’ philosophy, which means that spending on proactive interventions will lead to long-term savings by reducing (i) expensive crisis interventions and (ii) avoiding ‘out of their depth’ landlords becoming classed as ‘rogue landlords’.

Rogue landlords Continuation enforcement with rogue landlords in a way that gains support from tenants

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Affordability problems relating to housing in the South-East of England is contributing to people on the lowest incomes leaving the area and moving to areas including the West Midlands

General

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These people are likely to be on lower than average incomes and have limited connections to the area to which they are moving

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Development of low cost private rented and/or HMO strategies that are informed by evidence and recognise future challenges

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The larger the HMO sector, the more likelihood there is of serious criminal activity such as modern day slavery, sexual exploitation, gang and ‘county lines’ activities, areas being stigmatised

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Dedicated tenant liaison officer to engage with tenants in a supportive manner, this could be provided by either the voluntary sector or local authority

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Sharing of best practice across various local authority areas and the development of collective strategies

Housing has a significant impact not only on the individual, but also on the wider neighbourhood, the economy, and the community.

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Local authority lobbying for greater investment in social housing

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General 

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Development of low cost private rented and/or HMO strategies that are informed by evidence and recognise future challenges

Next steps

Out of their depth landlords

Dedicated tenant liaison officer to engage with tenants in a supportive manner, this could be provided eithertime the voluntary sector or localto authority  by First offending landlords be

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given the choice to paylocal to attend Sharing of best practice across various authority areas and the development of collective strategies education and training sessions

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highlighting how to improve. has housing Local authority lobbying for greater investmentThis in social

The next steps for the research project are to (i) shortly commence further interviews of HMO tenants and also to (ii) begin interviewing officers working directly and indirectly with HMOs and tenants.

been likened by one local authority to the equivalent of a landlord ‘speed awareness’ course.

Vulnerable tenants 

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HMO information packs for tenants available through benefits agencies, GPs and other agencies working either directly or indirectly with tenants

The Institute for Community Research and Development

Tenant forums and confidential feedback channels where issues can be raised without fear of reprisals or evictions

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Employment and volunteering advice and guidance

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Support with training and education opportunities

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Targeted interventions with tenants most likely to experience challenges before they reach the need for crisis/ response interventions

University of Wolverhampton April 2019

Some of these recommendations have cost implications. However, evidence suggests that a ‘spend to save’ approach will lead to longer term savings for various service providers, which means that costs could be covered collectively.

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