EXPLOITED: Part 3 – The unchallenged rampage of HMOs and shared houses, wreaking havoc for a profit across our community

Words by Adam Smith

In the third instalment of EXPLOITED, Adam Smith looks at the oversaturation problem in the HMO and supported living sector – hearing from the top of two housing associations and going right down to the root cause of the misery.

It’s a license to print money,” one former employee of a housing association tellingly revealed.

And it stands to reasons where there is easy money on offer there will be a queue of people ready to take it.

On the Birmingham City Council website there is a list of HMOs where landlords can charge the benefits system £900 for a room, which often can be more than £500 over the private rented market value. And the list runs into the thousands.

Across Birmingham there are 2345 HMOs with six or more people living in them, with applications pending for another 758 properties – including houses in Mere Road, Queens Road, Chester Road, Hillaries Road, Norfolk Road, Kings Road, Slade Road and George Road in Erdington.

As well as the licensed HMOs there are thousands more smaller HMOs and shared houses which fall into the category of ‘exempt’ or ‘supported’ accommodation. There are hundreds of companies which can apply for an HMO license in Erdington, many of which have been arguably set up just to take advantage of the system.

Spring Housing Association (SHA) is a Birmingham based Housing Association which operates HMOs, hostels and social housing – an organisation that has been referenced in previous Exploited articles. SHA has close links to Birmingham City Council and is one of the biggest housing associations in the Midlands, managing or owning more than 700 properties.

SHA, which has Edgbaston MP Preet Gill on its board of directors, has lobbied the Government to tighten up regulations and is now even turning shared houses into family homes.

SHA group chief executive and founder, Dominic Bradley, told Erdington Local there should be tighter regulations on the mushrooming number of companies which can run HMOs and shared accommodation.

He said: “We believe that there is over saturation of exempt shared housing provision in Birmingham. This is not to say that this type of housing doesn’t have an important part to play in the prevention of homelessness in all of its forms. In fact it’s essential.

However, we have long recognised that in parts of the city we are over saturated with this style of housing – which is disruptive to local communities. Stockland Green is an obvious example of this.”

Dominic added: “It’s one of the reasons we are about to purchase a shared house in Erdington and convert it back to a family home. We are aiming to do something similar in Edgbaston, which has had similar community issues to Stockland Green.

Whilst this is a start and one we are keen to develop further there are wider more systematic issues that need to be tackled around strengthening existing regulations about what we mean about care, support and supervision and work with providers to curb the current unmitigated growth and target provision linked to local strategy which we know Birmingham City Council are very keen to achieve.”

In the last article, Exploited – Humans Must Obey,  we outlined the rules tenants have to follow whilst living in supported housing and HMOs.

In the housing sector the term used is ‘Exempt Accommodation’ because in 1996 Housing Benefit regulations were changed to include ‘non-commissioned EA’ which were defined as ‘accommodation which is…provided by a non-metropolitan country council, a housing association, a registered charity or a voluntary organisation where that body or a person acting on its behalf also provides the claimant with care, support or supervision.

‘If a provider or landlord meets these criteria, they are exempt from rent restrictions within the private rented sector and are able to yield rent levels, paid for from housing benefit, far in excess of ‘general needs’ social sector rents and, often, market rents.’

These two paragraphs provided the starter of the sector gun, as landlords and housing associations realised they could charge more rent without the hassle of tenancy agreements – and the introduction of Universal Credit in 2012 massively increased the sector. The Conservative government’s change of rules, that the tenant received the housing benefit and not the landlord, meant it made sense for landlords to claim their houses were ‘exempt’ so they could get the cash directly as had been the case for decades.

The last Parliamentary research into HMOs, published in 2019, revealed there were more than 497,000 HMOs in England in Wales in 2018. And that number is growing.

Spring Housing Association, the University of Birmingham, and Commonweal Housing combined to produce a 60 page report – Exempt from Responsibility? Ending Social Injustice in Exempt Accommodation – which detailed the shocking state of housing provision and detailed how thousands of people were stuck in negative housing situations across the city. 

Ashley Horsey, chief executive of Commonweal Housing, a charity formed to ‘implement housing solutions to social injustice’, described the damage exempt housing is doing to tenants and communities.

He said: “The findings of this report are stark. That over 11,000 people in Birmingham – and many thousands more across the country – are living in potentially unsafe and unsuitable ‘exempt’ accommodation should concern us all.

Residents interviewed for this report described feelings of ‘entrapment’ in financial instability; exclusion from decision-making processes; lack of control over where, and with whom, they are housed.

At the same time, the nature of too many of the business models involved in this space are causing some concern, not least inflation linked leases from property owners requiring ever rising rents.

In addition, the deficit-based tenant modelling – talking up your tenant’s weaknesses to justify your income stream – is all too common, and a tricky place to be morally. Especially where there remains little oversight.”

Ashley added: “The ‘don’t ask don’t tell’ nature of some of the governance and regulation of this sector is alarming. Of course, everyone accommodated in the exempt accommodation sector is in need of a home. But asking no questions simply because this sector is putting a roof over a head is not good enough.

In particular, the exempt accommodation sector is too often the only housing available for the marginalised, the overlooked, the undervalued and the de-valued in society. They are the women who find themselves here after fleeing domestic violence, as their only housing option.”

The next instalment of EXPLOITED will reveal the shocking stories of women who have either lived in, live in, or have been affected by HMOs, exempt, or shared housing.

To read Exempt from Responsibility? Ending Social Injustice in Exempt Accommodation, visit www.springhousing.org.uk/wp-content/uploads/2019/11/Spring-Housing-Final-Report-A4.pdf

To read the 2019 Parliamentary briefing paper on HMOs, visit www.commonslibrary.parliament.uk/research-briefings/sn00708 

For more on Spring Housing Association, visit www.springhousing.org.uk

For more on Commonweal Housing, visit www.commonwealhousing.org.uk

If you have been affected by HMOs or any of the issues mentioned in this article, we want to hear your side of the story – email Erdington Local on exploited@erdingtonlocal.com

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2 Replies to “EXPLOITED: Part 3 – The unchallenged rampage of HMOs and shared houses, wreaking havoc for a profit across our community”

  1. I live hermitage road have HMO houses on road ,police always there ,three houses gone up for sale , we worried going to be HMO houses ,the problem is one bathroom ,four bedrooms ,people in out all time if they all do not get on fights ,I feel really sad to see change of family homes change ,mental health problems ,drink ,drugs ,years ago would be in hospital ,watch the same cars pull up hand out window sell there drugs ,all so common now ,feel so sad

  2. Speak to anyone living in Stockland Green or Erdington – the dismal story repeats itself.

    Frightening really, how these houses are used to accomodate pretty explosive people. The drain on emergency services is doubt phenonomal.

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