The Impact of Selective Licensing on Mental Health and Social Outcomes – A Study
A recent study published in BMJ Open has looked at how selective licensing schemes in the PRS may impact social outcomes and mental health amongst tenants. In this report we will look at what the study found and what we might learn from it.
Selective licensing – how does it work?
As this study looked exclusively at health issues in selective licensing areas it might first be useful to recap on what selective licensing actually is.
Under the Housing Act 2004 local authorities have the ability to introduce selective licensing schemes in designated areas of their district with a timespan of five years. Within a selective licensing area all PRS properties which are not otherwise subject to HMO licensing must be licensed.
A statutory procedure must be followed in order to introduce a selective licensing scheme and specific criteria must be met before one can be introduced. Many (but not all) schemes require the approval of the Secretary of State.
The criteria that apply for selective licensing to be introduced are that the area is one that is experiencing: Low housing demand – or it is likely to become such an area. A significant and persistent problem caused by anti-social behaviour (ASB). Poor property conditions. High levels of migration. High level of deprivation or high levels of crime. However, the reduction of anti-social behaviour tends to be the most often-stated reason where local authorities wish to introduce selective licensing.
Where they are proposed the introduction of selective licensing schemes tends to be controversial. Detractors sometimes criticise them as being a cynical revenue raising exercise.
Licensing and health – the limitations
There is nothing within the criteria that suggests selective licensing schemes can be used to improve health, or even that such schemes are intended to have a direct impact on health. Few would argue that better living conditions can potentially lead to better health but it is only a very general association – and other factors are at play too.
It is also worth bearing in mind that selective licensing schemes are relatively rare. Only around a sixth of 317 English local authorities (but not all have these powers) have such schemes. They tend to be more prevalent in London however.
Of course, selective licensing is not the only tool available to local authorities in order to regulate housing standards. They have HMO licensing and additional HMO licensing powers. They also have powers under legislation including the Housing Act 2004 to identify unfit PRS properties and require landlords to remedy them.
To date there is relatively little evidence on to what extent property licensing impacts health. One piece of research from 2013, which is quoted in this study, suggests that there is some evidence to support so-called interventions around thermal comfort. This is especially the case where it is targeted at people with the highest needs (poorer baseline health and/or socioeconomic status). It said that being able to heat the home economically had positive impacts on health outcomes (general health, mental health, respiratory health, reduced absences from work and school) as well as facilitating better use of indoor space for the residents.
The background to the study
The study says it is the first ever evaluation of the mental health and social outcomes of selective licensing schemes.
The stated objectives of the study were to assess the primary impact of selective licensing, which it describes as an area-based intervention in the private rented housing market, on individual self-reported anxiety and neighbourhood mental health as measured by what is known as the Mental Health Index (MHI). Its objectives were also to assess secondary impacts on anti-social behaviour (ASB), self-reported wellbeing and the turnover rate of residents living in this type of accommodation.
The study was authored by 11 eminent UK public health professionals. The authors work within a number of academic institutions, predominantly the London School of Hygiene and Tropical Medicine plus the University of Liverpool Faculty of Health and Life Sciences and the Department of Natural Sciences, Middlesex University. One of the authors serves as the Head of Private Sector Housing in the London Borough of Hackney.
The study was funded by the National Institute for Health and Care Research (NIHR) at the School for Public Health Research.
Basic assertions supporting the study
In introducing the study the authors make some assertions regarding housing quality and health. They say: ‘Housing quality affects health. Poor quality homes present numerous environmental risks to residents’ health, including risks of injury, physical illnesses linked to cold, damp and indoor pollution, and risks to mental health and well-being
‘The costs to the English healthcare system attributed to poor housing rivals those associated with hazards such as smoking and alcohol consumption; costing an estimated £1.4bn in 2021.
‘The unequal distribution of poor-quality homes across the population correlates with other social inequalities in health.
They say: ‘Housing improvement interventions can have a positive impact on residents’ health, including mental health and well-being, particularly when targeted at those most in need. Therefore, strategies for improving population health and health equity often include housing improvement.’
They add: ‘Housing quality improved between 2000 and 2019 in England across all sectors, but conditions are consistently worse in the private rented sector (PRS) compared with owner-occupied and the social rented sector. For instance, the proportion of homes failing to meet the criteria of the Decent Homes Standard in 2019 was 23% in PRS compared with 12% in the social rented sector and 16% for owner occupied homes. The PRS doubled between 2000 and 2019 in tandem with falling affordability of private homes and shrinking of the social housing sector.’
How the study was conducted
This study only looked at selective licensing areas in Greater London. It looked at what are called intervention areas (districts were selective licensing is in place) plus control areas in Greater London boroughs where selective licensing was in operation between 2011 and 2019. There are 33 local authorities in London, just under 10% of the English total.
The study drew on data from 4,474 respondents renting privately in the areas studied, from a total study population of 17,347.
The study used neighbourhood Mental Healthcare Index (or MHI) data and individual self-reported anxiety and well being information. Anti-social behaviour (ASB) figures were police-reported figures. Population turnover figures came from the electoral roll and consumer data.
The study utilised accepted (and quite complex) statistical methods to process the data. More detailed information about the sources of the data and the technical approach used can be found by referring to the study itself.
What the study found
The study found what it refers to as ‘associations’ between selective licensing being used in an area and reductions in area-based mental healthcare outcomes together with anti-social behaviour. It also found that population turnover increased in these areas.
Key takeaways:
(Note. A confidence interval or CI of 95% equates to a 5% chance of being wrong.)
Average treatment effect on treated (ATT) after 5 years was significantly lower for MHI (−7.5%, 95% Confidence Interval or CI −5.6% to −8.8%) than controls.
Antidepressant treatment days per population reduced by −5.4% (95% CI −3.7% to −7.3).
Mental health benefit receipt reduced by −9.6% (95% CI −14% to −5.5%).
The proportion with depression reduced by −12% (95% CI −7.7% to −16.3%).
Anti-social behaviour reduced by −15% (95% CI −21% to −8.2%).
Population turnover increased by 26.5% (95% CI 22.1% to 30.8%).
No clear patterns were observed for self-reported anxiety.
What is referred to as sensitivity analysis suggests that there was some benefit from the regeneration effects of the London 2021 Olympic Games which may have affected the figures.
Emphasising the fact that the study only looked at Greater London, the authors of the study assert that a national evaluation of selective licensing is ‘feasible and necessary.’
Some final thoughts
Few involved with the PRS would deny that this study has produced some interesting findings. It does suggest that, to some extent, use of a property licensing scheme can have positive health benefits.
However, in considering the results, it is very important to remember that selective licensing is not designed in any way, shape or form to produce better health outcomes for tenants.
It is also debatable as to whether selective licensing as it stands can ever improve housing conditions so much so as to improve a tenant’s health. The conditions applying to a selective licence are not that much different to the regulations which apply to letting a property which does not require licensing. Selective licence applications do not, for example, involve such rigorous examination of a property’s standards as, say, an HMO licence application does. So any link that has been established is to some extent a very opaque one.
What may also be useful would be some study and comparison of the health impacts of HMO licensing, and perhaps some comparison between other licensed and unlicensed properties of different tenures. The London property market and population make up is also quite different to that outside London in many cases.
The authors of the study do indeed acknowledge the limitations of the study and suggest that more research is needed. The authors called for a national evaluation of licensing schemes to examine impacts around England. They acknowledge that some of the apparent health improvements could be due to landlords exiting the market, so-called gentrification or anti-social tenants being displaced as a result of the introduction of selective licensing areas.
So what might happen going forward?
It is, of course, in good landlords’ interests to see that good tenants are healthy and happy in their homes and will stay for the long term. However, as things stand at the moment, It’s unlikely that the findings of this study will have any impact on the future of selective licensing. Health criteria are simply not amongst the criteria that may be used to justify a selective licensing scheme.
Looking ahead however, it will be interesting to see if this and any similar studies help to inform any future landlord licensing policies or laws – or not. For example, the current Renters (Reform) Bill which is now passing through Parliament. Although the government say that the purpose of the Renters (Reform) Bill is to ‘deliver a better deal for renters’ it does not make any reference to aiming to improve their health.
The Renters Reform Bill: What’s In It And What Does It Mean For Landlords?
The full version of the ‘Impact of selective licensing schemes for private rental housing on mental health and social outcomes in Greater London, England: a natural experiment study’ can be read here.
*Material quoted from the report is used under the terms of the Creative Commons CC BY 4.0 license.
