The councils cracking down on landlords – while racking up huge fines for poor housing

Councils are cracking down on private landlords despite racking up huge fines for failing to comply with rental regulations each year, The Telegraph can reveal.

Local authorities in England were ordered to pay a collective £1.7m in compensation to tenants last year – nearly four times the amount they paid a year earlier.

Complaints about mould and damp – one of the reasons for compensation payouts – also rose three-fold, according to Housing Ombudsman data. In total £335,488 was paid out in 2022.

Lambeth Council in London paid out the most compensation of any local authority in England to its tenants, worth £120,615, and up 372pc on what it paid out the previous year. Hammersmith and Fulham Council paid out a similar £120,542, up 193pc.

Both councils this year introduced selective licensing schemes in a crackdown on private landlords. The schemes cost landlords in Lambeth £923 per property, and £597 in Hammersmith.

Outside of London, Birmingham City Council racked up the highest compensation bill – worth £79,170, and up 80pc compared to 2022. Birmingham City Council launched a selective licensing scheme last year, charging private landlords £700 per property.

'Focus is needed in the social rented sector' Bruce Haagensen, of the GB Landlords community group, said the figures "seem to disprove claims by councils that the bad properties are in the private rented sector".

He added: "Most of the reports we see in the press about sub-standard properties relate to social properties, not private properties."

As for councils' selective licensing schemes, Mr Haagensen said they had become a vital income stream for local authorities, many of whom have been plagued by debt and bankruptcy woes.

Licensing schemes last five years, although some landlords' licences only last one year if the council takes issue with their managing agent. When this happens, they have to pay the fee each year – rather than every five years.

Mr Haagensen said: "That's nearly £1,000 a year, depending on the council, rather than every five. It's a big difference, and a very good money spinner.

"If councils have concerns, the licensing shouldn't be granted in the first place. To run them on a yearly basis smacks of income generation."

Chris Norris, of the National Residential Landlords Association, said the Ombudsman's data demonstrated that problems with damp and mould can affect homes for social rent "every bit as much" as those in the private rented sector.

He added: "As the Government seeks to crack down on poor quality private rented housing, the same focus is needed in the social rented sector."

Six councils in top 10 worst social landlords Earlier this month, Richard Blakeway, Housing Ombudsman boss, named and shamed the top 10 worst social landlords for complaints handling – which included six councils.

Five were in London – Haringey, Harrow, Southwark, Newham and Lewisham – and one, Warwick District Council, in the West Midlands.

Mr Blakeway said the worst social landlords had failed to make good on orders the Housing Ombudsman issued, and often failed to meet extended deadlines for payouts and improvements.

In Wales, Cardiff's High Court told social tenants this week that they are entitled to withhold their rent if they do not receive safety reports.

Some councils in England have failed to keep with their properties' safety checks, despite being able to fine private landlords tens of thousands of pounds for not doing theirs.

In June, London's Southwark Council referred itself to the Regulator of Social Housing after admitting it had failed to keep up with electrical safety checks on its council homes.

A spokesman for Birmingham City Council said: "From the council's perspective, an increased provision of compensation is positive as it demonstrates the council is now acting more quickly to recognise where compensation is appropriate, and is awarding this in a more proactive way.

"We are committed to compensating citizens properly where the service hasn't been delivered to the standard we would expect and are grateful for the support of the Ombudsman for helping us to get to this point.

"The council is investing £1.5bn over the next eight years to ensure all our tenants live in decent homes."

Lambeth Council and Hammersmith and Fulham Council were all approached for comment.