Property guardians: headline report – GOV.UK

Authors: Kesia Reeve, Emma Bimpson, Jamie Redman and Lindsey McCarthy with Elaine Batty, Barry Goodchild, Ben Ledger-Jessop, Elizabeth Sanderson, Beth Speake and Ian Wilson

September 2021

Summary

This report presents the headline findings from a study commissioned by the Department for Levelling Up, Housing and Communities and carried out by the Centre for Regional Economic and Social Research (CRESR) at Sheffield Hallam University to explore property guardianship in England. The findings are based on a survey of local authorities in England, interviews with local authority officers in 14 case study areas, and with 24 property guardians.

Overall, the findings suggest that poor conditions prevail in property guardianship, despite efforts by some guardian companies and the Property Guardian Providers Association to professionalise the sector and comply with legal standards. Local authorities have a duty to review private sector housing, and powers to tackle substandard housing, yet very few appear to engage with the sector, related in part to confusion about their status in housing law.

Key messages

• Very little is known about property guardianship in the UK. There are no national statistics, and local authorities do not collect data about the sector. The very limited available evidence, including the findings from this study, indicates that guardianship may be relatively widespread, geographically, not concentrated only in London and other very high value markets, and may be more prevalent than local authorities assume.

• Property guardian companies view guardianship as a model that prevents crime and anti-social behaviour and makes a social and economic contribution to communities through provision of low-cost housing to local workers. For residents, guardianship can provide value for money because of the space available, relative to the cost, but there was also a strong sense of compromise in the accounts of the guardians interviewed, trading space and affordability, for standards.

• Most of the property guardians interviewed had entered the sector because of difficulties accessing affordable traditional private rented sector housing. They were people of varying ages, sometimes facing homelessness. This is a somewhat different picture from the popular characterisation of guardians as young creatives and professionals seeking flexible, quirky lifestyles and entering guardianship through active, positive choice.

• All the guardian companies interviewed reported that the properties they manage met basic living standards and health and safety standards and stated their compliance with relevant statutory regulations. They described responsive maintenance services and concerted efforts to professionalise and improve the reputation of the sector. However, reports of poor property conditions were widespread amongst the guardians interviewed.

• Local authority enforcement teams were not routinely engaging with the property guardian sector and, with some notable exceptions, expressed ambiguity about the application of legislation to property guardianship. They were mostly not proactive in identifying and inspecting property guardian Houses in Multiple Occupation (HMOs) and some barely acknowledged guardianship as falling within the remit of enforcement teams. Guardian companies expressed frustration that some local authorities were slow or unresponsive to applications for HMO licenses.

• Property guardians usually occupy properties under license agreements rather than tenancies but the question of whether property guardians are tenants or licensees in legal terms is the subject of much dispute.

• Most of the guardians interviewed understood the conditions of their license agreements. These were, however, the subject of dissatisfaction. Unannounced inspections were a particular source of complaint. Property inspections with no forewarning, even if legitimate, were viewed as violation of privacy. Guardian companies, on the other hand, described inspections as reinforcing health and safety commitments, although they also help to establish occupation as a licence rather than a tenancy.

1. Introduction

This report presents the key findings from a study commissioned by the Department for Levelling Up, Housing and Communities (DLUHC) and carried out by the Centre for Regional Economic and Social Research (CRESR) at Sheffield Hallam University to explore property guardianship in England. The research was conducted alongside a study about local authority enforcement in the private rented sector.^{[footnote 1]}

2. Background

• Property guardianship is a form of private accommodation in which occupants live, but where they also have an explicit role in providing security for a property that otherwise would be empty and potentially at risk of squatting or vandalism.
• The growth of property guardian companies in the UK dates from the early 2000s when two Dutch companies expanded from the Netherlands to the UK. Once the model was demonstrated as viable in the UK, other competing companies emerged.
• There is a lack of national data about property guardians and very little research evidence. What evidence there is indicates that property guardianship may be a burgeoning market but one characterised by poor conditions and insecurity. Local authorities have duties and powers to tackle poor conditions in the private rented sector, but nothing is currently known about how local authorities are responding to property guardianship. It is against the backdrop of such a significant evidence-gap that this study was conducted.

3. Aims and objectives

The overall aim of the study was to improve DLUHC’s understanding of property guardianship. To meet this aim, the research was guided by a series of research questions:

• why and how do people become property guardians?
• what are property guardians’ experiences of guardianship, including the types of properties occupied, conditions, safety, and management of their property?
• what action, if any, do property guardians take when they experience problems with their property or management of the property?
• what role does property guardianship play in the wider housing market?
• is the property guardian sector operating within the relevant aspects of housing law and are property guardians aware of their legal status and rights?
• what role do property guardian companies play in the property guardian market and what are their business models?
• how are local authorities using their powers to tackle issues with the property guardian sector?

4. Methods

Phase 1: analyses of an integrated dataset comprising a survey of local authorities and secondary data sources

• A survey, administered by DLUHC, was distributed to all English local authorities in spring 2020. It contained questions relating to property guardianship alongside questions about private sector housing enforcement. Responses were received from 140 local authorities, representing 44% of the 318 local authorities in England. Data relating to property guardianship was extracted for this report, although response rates to these questions were poor.

Phase 2: qualitative research with local authorities in England to explore enforcement in the private rented sector, including in relation to property guardianship

• 14 case study local authorities were selected. These represented local authorities with a variable profile in relation to private rented sector housing conditions, levels of enforcement action, and the size of the enforcement team. The sample was derived to included local authorities from each of the regions of England, from each of the ‘urban/rural classification’ categories, to include unitary, metropolitan and non-metropolitan local authorities, and to include some local authorities known to have property guardians.

• 80 interviews were conducted with local authority officers and partner agencies through individual interviews and focus groups. All participants were asked about their experience of property guardianship and their approach to enforcing standards in the sector, although some local authorities reported no knowledge of the sector. Interviews and focus groups were conducted by videocall, with follow-up questions and communication by email in some cases. All were recorded and transcribed.

Phase 3: qualitative interviews with property guardians and property guardian companies

• Qualitative interviews with 24 property guardians were conducted by video/telephone and were recorded and transcribed. Participants were given a £20 electronic shopping voucher to thank them for their time.

• The final sample comprised 13 women and 11 men. Participants ranged in age from 24-55 (six in their 20’s; 12 in their 30s; four in their 40s; and two in their 50’s) and lived in seven London boroughs, the West Midlands, the South East, the East of England, the North West, and Yorkshire (in total, 15 lived outside London). Across the sample participants had experience of living in properties managed by 10 different guardian companies. All participants were either single (the majority) or in a couple, and none had children living with them. All were White British (21) or White European

• A total of eight interviews were conducted with property guardian company staff. Participants worked for guardian companies that varied in size, maturity and geographic coverage. The sample included most of the well-established guardian companies in the UK. It included representation from the Property Guardian Providers Association (PGPA), as well as companies that are not members.

5. The scale and geography of property guardianship

There are no national datasets estimating the number of property guardians or guardian properties. Response rates to questions about property guardians in the survey were low and so did not provide accurate information about the number of guardian properties in England. In total, 41% of LAs reported being aware of property guardians in their area, identifying a maximum of just 130 individual property guardians. Over one third (34%) reported no guardians, and one quarter did not know There is tentative evidence that guardianship may be more prevalent than is indicated by these responses.

• Research conducted in 2017 estimated that there are around 5-7,000 property guardians in the UK.

• In their 2019 annual review, the PGPA report that 600,000 people applied to be property guardians in the preceding year, twice the number as had applied the previous year.

• Two guardian companies interviewed for the study said they had identified around 40 competitors, and analysis of Companies House data suggests that there are between 20-40 companies operating at any one time.

• A freedom of information request in 2016 found that around 1000 property guardians lived in buildings owned by central London authorities alone^{[footnote 2]} and one London-based guardian company interviewed for this study reported that they have over 500 properties.

In terms of the geographic distribution of property guardianship, the survey found that almost half (22) of the 51 local authorities that reported having property guardians were in the South East (16 LAs) or London (six LAs). This is consistent with the literature which suggests that the emergence of property guardians is related to affordability issues, which are more prominent in these regions, and with the views of the case study local authorities. However, property guardianship is not solely a London or South East, or even ‘high value’ market phenomenon. The number of guardianship properties may be fewer (although that is not known), but it is a model operating across England. For example:

• six of the eight companies interviewed for this study operated nationally;

• local authority survey respondents in the Midlands, East of England and North of England all reported property guardians in the area;

• a snapshot of data harvested from spareroom.com on January 20th, 2021 by the study team found property guardian rooms/buildings advertised in 95 local authority areas, 80 of which were non-London authorities, including those in the North and Midlands. This included several local authorities reporting in the survey that there were no property guardians in the area.

These various figures need to be treated with caution: they are not based on robust data or rigorous analysis, and the most robust evidence – the 2017 research – has not been updated. However, there is enough indicative evidence to suggest that local authorities should make proactive efforts to assess the scale of property guardianship in their areas, to make informed decisions about whether this is a sector requiring regular review of standards.

6. Property guardianship business model

• Property guardians provide security for a property that would otherwise be empty and at risk of unauthorised occupation or vandalism. Guardians occupy the property on a sublicense^{[footnote 3]} from a commercial organisation – a property guardian company – and this company in turn holds the property on a commercial licence or short-term lease from the property owner. The guardian company receives a license fee from the guardians. The property owner is generally responsible for costs associated with the structure or fabric of the building, and the guardian company carries the cost of installing facilities required for a basic standard of living, and ongoing maintenance.

• Property owners can be private individuals or companies, public authorities or third sector organisations. All the companies interviewed reporting having local authorities as clients.

• Property guardian companies see guardianship as a ‘win-win’ model that prevents crime and anti-social behaviour and makes a social and economic contribution to communities through provision of low-cost housing to local workers. The value of the service provided by guardians, above traditional security services, was emphasised by each of the companies interviewed, as participants described the reduction in arson, vandalism and squatting through buildings being inhabited, and their contribution to bringing empty homes back into use.

• All guardian companies interviewed highlighted the social value of guardianship. Several described their companies as targeting NHS or key workers as part of their strategic development, with one company housing 40 overseas nurses in a partnership with a local authority in London and an NHS Trust. In this context, they pointed to the value of guardianship as providing housing for key workers living in high rent areas.

• Guardian companies employ financial eligibility checks like those found in the wider private rented sector. The companies involved in this study required applicants to be employed, or self-employed. Within these parameters, they described the target demographic as diverse and including professionals, key workers, and people in creative industries. There was some evidence of a shift, with several companies emphasising that they had moved on from the ‘bohemians’ who they viewed as traditionally interested in guardianship. ‘Trust and responsibility’ were frequently cited as key factors in character assessments, as companies looked for people ‘in good standing’.

• Interviews with guardian companies suggest they are clearly adept at identifying new markets, continually seeking to evolve and adapt the business model in response to opportunities. One company had started working with a large homelessness charity after identifying the need for homelessness accommodation during the pandemic, for example, and we have noted above that recruitment strategies have shifted, potentially changing the profile and demographics of property guardians living in the sector. This is a sector that might, therefore, change rapidly over time.

• There have been attempts recently by property guardian companies to improve the reputation and practice of the sector. The PGPA was established to set standards across the sector that members must meet and comply with, and to develop best practice. The PGPA reported that they apply membership criteria stringently, citing guardian companies that were not currently accepted as members and that had been expelled for falling below expected standards. Local authorities welcomed these developments, reporting optimism that improvement in standards and conditions would flow. The PGPA’s ambition is to be recognised as a professional body in line with the model operating in the Netherlands which they view as exemplary.

7. The legal framework for property guardianship

The applicability of housing legislation to property guardianship: key areas of tension

• Regardless of the former use of guardian properties, they are occupied as places of residence and so meet the definition of a ‘dwelling’ under the Housing Act 2004. As such, they are subject to the same legislative and regulatory framework as other private rented accommodation. Nevertheless, there remains significant ambiguity, dispute, and variable understanding about the extent to which, and how, existing housing legislation and regulation applies to property guardianship. The general picture was as follows.
  • Guardian companies were mostly of the view that some housing legislation does not, or should not, apply to property guardianship, pointing to characteristics of the sector to argue for exemption from certain legal requirements such as mandatory licensing for Houses in Multiple Occupation (HMO), or lower expectations for property standards. These include: that the buildings are often commercial not residential in terms of their previous use; that they are only used for short-term residence; and that the primary purpose of guardianship is to provide security rather than housing.
  • Local authorities were either a) unsure whether or how to apply to legislation, reporting it to be unclear (those less experienced about guardianship) or b) firmly of the view that the legal status of guardianship was not materially different to other private rented sector housing (those with greater experience of guardianship).
  • Property guardians were generally of the view, like the companies, that guardianship was ‘different’ in some respects to other forms of private rented housing and so should not be held to the same standards, but that they have a right to better standards and security than they currently experience.
• Two aspects of housing and tenancy law were a particular source of dispute: the question of whether property guardians are licensees or tenants; and the question of whether property guardian premises containing five or more people from at least two households meet the statutory definition of a ‘house in multiple occupancy’ and so are subject to mandatory licensing.

Licensees or tenants?

• Property guardians usually occupy properties under license agreements rather than tenancies. This distinction is important because it determines the rights property guardians are owed, for example regarding notice periods. It is important to guardian companies to maintain the position of guardians as licensees. Many described the clarification of licensee status as a central part of the sign-up process with guardians, as well as being reinforced by signage in buildings and by monthly inspections.

• Hunter and Meers^{[footnote 4]} outline three crucial criteria that determine a tenancy rather than a licence. To be a tenancy the property guardian must be a) paying rent b) for a period and c) have ‘exclusive possession’. Property guardians pay a fee every month, albeit called a ‘license fee’ rather than ‘rent’, and so the first two of these conditions are met. ‘Exclusive possession’ is less clear. It might involve, for example, having a lockable bedroom to which the property guardian alone has been issued keys. There is some disagreement about whether the common clause in property guardian licenses allowing companies to inspect building and rooms without notice prevents ‘exclusive occupation’ as is generally claimed by guardian companies.

• As legal precedents have established,^{[footnote 5]} it is what happens in practice rather than the written terms of an agreement that matters. Research conducted with property guardians in London in 2017 scrutinised the conditions of occupation and, on finding that nearly half of the guardians they surveyed has sole occupation of the property, suggested that this ‘infers a level of control and access which may not be commensurate with occupying on a licence; instead it is far more likely to effect the creation of a tenancy.’^{[footnote 6]} Local authorities interviewed for this study, including trading standards officers, were consistently of the view that most of the property guardians they encounter are tenants rather than licensees.

HMO licensing

• The question of whether property guardianship should be subject to mandatory HMO licensing was raised extensively by guardian company executives, with most, although not all, arguing for exemption. Two main arguments were made in support of this view: first, that guardianship is not a housing tenure and so should not be subject to housing legislation; and second that the characteristics of guardianship are different to other private rented sector accommodation so should be exempt from, or subject to a different set of less stringent conditions.

• Local authorities less experienced in property guardianship were not always clear whether mandatory HMO licensing should apply to guardian properties, and some described it as a ‘grey area’. The few local authorities more experienced in dealing with property guardian properties did not, however, think this was a ‘grey area’ and could readily determine whether a property guardian premises was subject to mandatory licensing.

• Local authorities also reported that property guardian companies, while generally remaining resistant to HMO licensing and continuing to lobby for exemption, were licensing their properties. There was a sense that in respect of HMO licensing the property guardian sector was shifting, in practice if not in principle.

8. Reasons for entering property guardianship

• Amongst the property guardians interviewed for this study, the decision to enter guardianship was nearly always underpinned by financial insecurity and the (un)affordability of traditional private rented sector housing. A picture emerged from the research that is somewhat different to the popular characterisation of guardians as young creatives and professionals and ‘carefree, young people’^{[footnote 7]} seeking flexible, quirky lifestyles and entering guardianship through active, positive choice. Rather, they were people of varying ages, sometimes facing homelessness, and often with few alternatives. Around one third of the sample had entered guardianship in response to a destabilising change in circumstances, including relationship breakdown and being served notice to quit a tenancy.
• The guardians interviewed had often been struggling to access affordable private rented housing when they came across guardianship, an experience not exclusive to those living in areas with high housing costs. It is relevant that around two thirds of the sample occupied roles in the labour market that were part time, low paid and/or insecure. Various constraints had prevented participants from securing accommodation in the private rented sector before moving into guardianship:
  • they could not afford the private rented sector housing on the market – for example ‘I was leaving a marital home and looking at, it [rent] was twofold really, cost was primary, I did have a look on the rental market for what I could afford to rent, I wasn’t getting a great deal at all’ (male, 40’s, East of England)
  • the housing that was affordable was in such high demand that it was let very quickly, for example – ‘the properties were going on the market super quick and by the time you actually view something it was already gone’ (female, 20’s, market town, West Midlands)
  • they failed to meet basic income thresholds applied by landlords and agents, for example – the problem I have being on a lower income is private rental companies wouldn’t even look at me…because my income wasn’t adequate enough… (female, 40s, West Midlands)
  • they could not find affordable accommodation they considered adequate in terms of size, standards or conditions, for example – ‘I could have gone for a really horrible bed-sit that was in my price range or done a student house share or something (female, Yorkshire, 30s)
• The relative affordability of guardianship was foregrounded by nearly all participants. It was common for participants to compare the rent they had paid or would otherwise pay in the traditional private rented sector with their monthly payments as a guardian, although it was also suggested that costs had risen in recent years, particularly in London.
• All participants occupying traditional professional roles (such as teacher) were guardians in London, and London-based participants were also more likely to be in full-time employment. The sample is so small that no generalisation can be drawn from this. It would make sense, however, that in a housing market as expensive as London, it is not only those in precarious employment that turn to cheaper forms of accommodation.
• Guardianship was rarely described as an unconstrained choice, but some participants were enthusiastic about what it could offer. Property guardianship was described as an exciting opportunity to live in ‘interesting’, ‘weird, old buildings’ and some appreciated the high degree of creative licence to personalise and decorate their living space.
• The space available in guardian buildings relative to what participants could afford was a ‘pull’ for most, but for the artists in the sample it also provided them with a place to work, motivating them to enter and remain in the sector. Around a third of participants were using properties for work and other creative endeavours alongside domestic purposes, with three having music or art studios within the property. As one described:

• For a few participants, guardianship was partly driven by a need to move to an area that was within reasonable proximity to their place of work or allowed them to pursue more meaningful activities aligned with desired career paths, typically in the arts. For example – The rent was a lot cheaper so it meant I could spend less time in a job I didn’t want to be doing and more time focusing on art and doing exhibitions (female, 30’s, London)
• With a very small number of exceptions, participants viewed property guardianship as a short-term solution to problems accessing decent affordable housing in a more secure tenure. However, many had been guardians for many years, moving between guardian properties but remaining within the sector. At least eleven participants had lived in guardianships for at least two and as long as seven years, sometimes moving sequentially from one to another. Eight had lived in at least one guardian property for a year or more and two had lived in the same property for six years.

9. Accessing guardianship

• Most participants first learned about and secured a property guardianship through a) social networks and word of mouth, or b) vacancies advertised on sites such as ‘Spareroom.com’ and ‘Rightmove’. Subsequent properties were either those offered by the same guardian company or found through friends living in other properties with vacancies. Those who found properties through online searches had done so while searching for private tenancies and had not, typically, previously heard of property guardianship.
• There was some evidence that the letting process was expedited if the potential resident was already a friend of current property guardians and/or the head guardian^{[footnote 8]} – ‘when you know someone you can kind of jump the queue.’ and that companies actively encouraged existing property guardians to recruit peers through their social networks: Some of the guardian companies reported having made less use of general letting websites over time because of the success of peer and word-of-mouth recruitment

10. Geography and mobility

Property guardians are thought be to a mobile population. It is also suggested that guardianship can provide an affordable means through which people can live in expensive locations, such as London, potentially allowing people to take up employment in less affordable housing markets and/or live closer to their place of work. The findings from this research suggest a more complex picture.

• Participants were mobile in the sense that very few were living in the town or city where they grew up.^{[footnote 9]} However, geographical mobility had usually predated a move into a guardianship property – i.e. participants had already moved away from their hometown into the private rented sector, and then moved into guardianship broadly within the place in which they already lived (with some mobility between London Boroughs). It was not uncommon, therefore, for participants to describe guardianship as providing a more affordable way for them to remain in, rather than to move to, a particular place.
• Those who had relocated longer distances directly into a guardian property had usually done so to start new jobs or because employment opportunities were greater. The presence of friends and social networks in the destination area also influenced decisions. Participants who had moved local authority area into guardianship, had not always moved from less expensive to more expensive areas.
• Participants had also moved between guardian properties. Overall, around one third of participants had moved at least once, and as many as five times, within the sector. This often occurred when guardians are given notice to quit and are then offered an alternative by the same company. In these cases participants typically moved within their city/town of residence, or between London boroughs.

11. Property conditions and management

Property conditions

• Information provided by guardian companies and by property guardians about property conditions were inconsistent. All the guardian companies interviewed reported that the properties they manage met basic living standards as well as health and safety standards and explicitly stated their compliance with statutory safety regulations. Meanwhile, reports of poor property conditions were widespread amongst the property guardians interviewed.
• Most property guardians reported very poor conditions, with properties frequently described as deteriorating and susceptible to adverse weather conditions. Local authorities also reported poor conditions in properties they had inspected. Persistent issues with damp and mould were very commonly reported, including damp from flooding, faulty plumbing and leaking roofs. The following was typical:
  This place is quite a crumbling concrete block so the ceilings, the walls, just outside of my bedroom door rain was coming through the ceiling… it would happen again and again. (male, 20s, London)
• Amenities were also frequently reported to be inadequate, with several guardians reporting no hot running water, or no drinking water, for some of the time or in part of the building. One guardian reported having no hot water other than from an electric shower over one winter and another explained that now it’s just one shower works for 15 people and they haven’t really done much to fix it. Another reported that there was no heating or hot water in the property when he moved in. After two months of complaining they were provided with a portable heater. Local authorities also described guardian properties they had inspected with no drinking water (the only water was in the bathrooms), no kitchen facilities, or no hot water.
• Lack of adequate heating was very commonly reported, accentuated by the fact that properties were often very large (a feature reported to be one of the most positive aspects of guardian properties in other ways) with high ceilings (night clubs, warehouses) and draughts due to the general poor conditions.
• Most guardian participants were reliant on portable heating and appliances. One local authority officer explained that these are often ‘poor quality but it does scrape through on the legal minimum’ This raises an important point that some of the conditions reported by the guardians interviewed may not have breached legal minimum standards but were, nevertheless, experienced as inadequate.
• Fire safety measures were reported to be reasonably good in some guardian buildings, but several examples were provided by guardians and local authorities where this was not the case. One guardian reported that there had never been a fire drill at a building with over 20 guardians in the several years he had been resident, and individual rooms were not protected by fire doors. These accounts are at odds with the reports of guardian companies, several of whom employed fire safety consultants and contractors to carry out initial risk assessments on potential guardian premises, as well as ongoing fire testing once buildings were occupied. These measures were described as additional, rather than as a replacement for legislation.
• It is difficult to determine whether the poor conditions reported by guardians reflects a failure on the part of guardian companies to meet legal standards and requirements. This certainly would not be consistent with the views of the companies interviewed. It could also partly reflect the limited engagement of local authorities with the property guardian sector and their ambiguity about the application of legislation to property guardianship. Many HMOs fall below required standards before being inspected by local authorities, who then instruct on works required. But this requires local authorities to identify and inspect properties.

Management and maintenance

• Several guardians reported fully operational and responsive repairs reporting systems. However, it was much more common for participants to describe companies handling of issues as either slow, unresponsiveness, or evasive, than prompt and satisfactory. When companies did make repairs or attempt to improve conditions, guardians reported that they would most often provide temporary, low-cost solutions that were not very effective.
• Unresponsive repairs service may partly reflect lack of willingness of the part of the owner, rather than the guardian company to invest in significant work. Companies reported their own frustrations that their clients (the property owners) could be evasive or reluctant to invest. In these situations, the companies were faced with the choice of making good the property themselves or serving eviction notices and closing down the guardianship.
• There was scarcely any evidence to suggest that guardians notified local authorities of problems with property conditions. They appeared to have little idea how to pursue grievances, beyond repeated complaints to the company. Rather than bringing grievances to wider attention, participants would most often manage their own expectations both prior to and during their guardianship. They would routinely concede that conditions and issues described above were to be expected with the price and nature of property guardianship.

Licence conditions and management

Most of the guardians interviewed understood their agreements and could provide detail about the conditions of their licence. Guardian companies emphasised that they reviewed licensing conditions thoroughly during the signing-up process. There was no evidence that guardians were not entering willingly and knowledgably into their licensing agreement. The conditions contained within the licences were, however, the subject of dissatisfaction, as follows.

• Unannounced inspections were a particular source of complaint and a condition of most license agreements. Property inspections with no forewarning, even if legitimate, were viewed as violation of privacy. One described an unannounced inspection while she was in the shower – somebody just walked through the front, didn’t come into my room but I was like ‘somebody’s in the house’. Guardian companies described inspections as reinforcing health and safety commitments, but room inspections are also a condition that can help establish occupancy as a license rather than a tenancy.
• Concerns were raised about the insecurity of licences, as contrasted with tenancies, because of the shorter notice period (28 days). The insecurity of being a licensee was emphasised because respondents knew that buildings used for guardianship had a short life. Many participants had been served notice, some several times, and all reported being given the requisite 28 days. Local authority tenancy relations officers reported that they had encountered illegal evictions and notice periods in guardian properties some time ago but that this had changed more recently. When served notice, it was common for guardian companies to offer, and guardians to accept, alternative guardianships, In the main, participants were grateful for this strategy, seen as being deployed to minimise the inherent insecurity associated with guardianship. Companies would carry deposits and details over to ensure smooth transition and minimise hassle for guardians.
• Licenses often contained restrictive conditions, such as limiting the number of visitors allowed or the number of nights guardians could spend away from the property. These conditions were articulated by one guardian as feeling like a violation of her human right to live comfortably in her home, although she recognised that, legally, her rights were not being breached.

12. Tackling poor conditions through enforcement

Reviewing standards and conditions in the property guardian sector

• Local authorities have a duty under Part 1 of the Housing Act 2004 to keep housing conditions under review and identify action needed in the local area. Results from the survey and the case studies indicate very low levels of knowledge about the property guardian sector amongst local authorities.
  • Most local authorities did not have a comprehensive understanding of standards and conditions across the private rented sector generally. Where reviews and surveys were conducted, they did not include property guardianship. There was little evidence of case study local authorities feeling duty bound to identify or review the property guardian sector as part of reviews of the wider private rented sector.
  • One quarter of local authority survey respondents were unable to say whether property guardians operated in their area. A further 34% reported having no property guardians although the study team were aware of guardians in at least some of these areas. Overall, the survey and case study research suggested that most local authorities are aware only of property guardian premises that had been drawn to their attention, usually through complaints.
  • Of the local authorities reporting having property guardians, few, if any, were able to provide accurate information about the number of premises or guardians, the number of guardian companies operating, the type of building or specific information about the legal arrangements used.
  • Enforcement officers in the case study areas often spoke in vague terms about property guardianship, recalling having ‘come across’ one some time ago, or having ‘not heard much’ for a while. For example – I’ve read about it and other local authorities’ experiences but I wouldn’t want to say.
• Limited attention to guardianship partly reflected a view that the sector is so small, outside London at least, that a complaints-driven approach to identifying problems is appropriate. A few local authorities barely acknowledged guardianship as falling within the remit of enforcement teams. There were exceptions, with a small number of local authorities giving consideration to the way in which housing and enforcement legislation applied to property guardianship, liaising with property guardian companies, and proactively carrying out licensing and housing inspections. They fully acknowledged the sector as within the remit of the enforcement team, part of their ‘business as usual’, and to be dealt with within the same processes and legal frameworks as any other dwelling.
• Local authorities use property guardians in their own empty buildings and so it was surprising that so few displayed knowledge about the sector. This might be explained in part by limited communication between respective local authority departments. Officers in two local authorities described difficulties securing information on local authority-owned guardian properties from the relevant department.
• It is concerning that local authorities are not routinely incorporating this section of the private rented sector into their standard data collection exercises because evidence from this study suggest that standards are often poor, and that guardianship may be more prevalent and geographically dispersed than local authorities assume.

Enforcement action

• Nearly all local authority case study and survey respondents had an enforcement strategy in place, but none had a strategy for property guardianship or referenced guardianship in wider strategies. Enforcement of standards in guardian properties was, therefore, guided by general enforcement strategies.
• Local authorities’ interaction with, and enforcement against property guardian companies was sporadic and, in some cases, non-existent. In total, 12 local authority survey respondents (out of 51 reporting having property guardians in their area) had taken enforcement action against property guardian companies and only four case study local authorities reported any recent dealings with property guardians. Only one of these encountered guardianship on a regular basis (a London borough).
• 36 of the 51 local authority survey respondents reporting property guardians in their area (70%) had received complaints about property guardian premises, most commonly in relation to property standards (25 respondents), followed by nuisance (nine respondents). Most instances of enforcement in these local authorities related to conditions, for example addressing hazards, repairs, heating improvements and fire safety (eight respondents). Licencing was the second most common reason for enforcement, reported by four respondents.
• Amongst case study local authorities, work to enforce standards and regulatory compliance in property guardian premises was very reactive, although the study team encountered proactive work by a trading standards officer, and one member of an enforcement team with a stated remit for property guardianship which was allowing more proactive work to develop. When complaints were received, local authorities inspected and took action as appropriate, including improvement notices and civil penalty notices for failure to license.
• There was tentative evidence that when enforcement action was taken against guardian companies it was effective at prompting behaviour change, acting as a deterrent for future breaches. The local authorities that had taken robust enforcement action reported notable improvements subsequently. As such, greater attention to property guardianship amongst local authorities could result in much needed improvements in standards in the sector.

Explaining limited enforcement to tackle poor standards in guardian properties

• Local authorities face barriers to tackling poor standards in the private rented sector generally. Research carried out alongside this study identified the following factors as significant drivers and barriers of enforcement in the private rented sector:
  • the capacity, experience and expertise of local authority enforcement teams
  • political will and strategic commitment to tackling poor standards in the private rented sector, and the related support of local authority legal teams
  • the scope and complexity of the legal framework for enforcement work
  • gathering evidence to support enforcement action.
• These barriers can be emphasised for marginal segments of the market. For example, if there is no political will to tackle traditional poor quality private rented housing which affects a sizeable proportion of the population, there is unlikely to be support for enforcement in guardian properties. Similarly, if enforcement teams are under-resourced, they are unlikely to prioritise a sector that represents a fraction of the local private rented sector.
• In relation specifically to property guardianship, the principal factor that explains the limited enforcement action is local authorities’ poor awareness of guardianship and failure to proactively review the sector to assess property standards. However, problems were also found in relation to the ambiguity around, and deployment of relevant legislation to property guardianship, specifically.
  • Issues associated with licencing property guardian HMOs. First, most guardian companies argue that they should not be subject to mandatory HMO licensing and so enforcement officers frequently found themselves in dispute with companies over licensing, in ways they did not with other landlords. This placed a burden on officers’ time and could require involvement from legal departments. Second, determining whether guardian properties met the occupancy criteria for mandatory licensing was not always straightforward. There can be significant churn within guardian properties and the nature of many of the buildings are such that the number of residents is not determined by the number of ‘rooms’ as it is in traditional housing.
  • Challenges relating to HMO licensing of guardian properties were not raised only by local authorities. Variable and informal practice across local authorities was a source of frustration for property guardian companies, some of whom were keen for a set of clear, consistent standards and expectations. The approach taken by local authorities to assessing compliance with HMO licensing standards was reported by all guardian companies as inconsistent, with different interpretations and applications by officers across and within local authority departments. Several companies also reported that some local authorities were slow or unresponsive to applications for HMO licensing.
  • Challenges assessing and applying standards to non-traditional property types. Even experienced officers reported difficulties applying standards to property guardian premises, including HMO management standards and Housing Health and Safety Rating System (HHSRS) hazard assessments. Confronted with unusual buildings and layouts the legislation did not always provide officers with a clear way of identifying breaches and hazards. Some officers spoke in general terms, suggesting that legislation had not been devised with property guardianship in mind, had not evolved with the private rented sector, and so was not always fit for purpose. Clarification of how the legislation applies to property guardianship was said to be required.
  • The potential hazards in guardian properties can also be those that enforcement officers are less experienced at tackling. This applied even to the most experienced teams. One officer referenced asbestos and legionnaires in this context.

13. Conclusion

The findings from this study suggest that poor conditions are prevalent in guardian properties, despite the efforts of some guardian companies and the Property Guardian Providers Association to comply with legal standards. This is concerning when we consider that most participants in this study had entered guardianship because of barriers to accessing adequate housing in the private rented sector, sometimes during a period of significant housing insecurity and in the midst of difficult life circumstances. These guardians were grateful to have found spacious, affordable housing that offered creative opportunities for some, but also reported very poor standards of living and restrictive license conditions in a sector they had intended to be a short-term solution to their housing needs, but in which many lived for years.

It is difficult to determine whether the divergent reports of guardian companies and guardians about property standards and conditions reflects a failure on the part of guardian companies to meet legal standards and requirements. Local authority enforcement teams are not routinely reviewing, inspecting or enforcing standards in guardian properties, there are differences of opinion about the application of housing law to the sector, and property guardians were found rarely to report problems to local authorities. Greater acknowledgement by local authorities that property guardianship is private rented sector housing and so falls within their role and responsibilities, accompanied by efforts to assess the scale of, and conditions within the sector locally, would very likely result in increased enforcement action and associated improvements in standards. Further clarification or guidance on the application of housing law to property guardianship is also likely to help in this regard.

There is an urgent need for more data about the scale and nature of property guardianship but there is enough indicative evidence to suggest that local authorities should make proactive efforts to assess the scale of property guardianship in their areas, to make informed decisions about whether this is a sector requiring regular review of standards.

Acknowledgements

We would like to thank the property guardians, property guardian companies, and local authority officers for giving up their time so willingly to contribute to and support this research, and for candidly sharing their experiences and views. The study was conducted during the COVID-19 pandemic and so we were very grateful for such high levels of engagement. We would also like to thank our research manager and members of the project advisory group at DLUHC for their constructive and valuable advice throughout the study and comments on the research outputs. Any inaccuracies or omissions in the report are solely our own responsibility.