An SLS can only be introduced if the council is satisfied that there is a problem with low housing demand or where there are significant and persistent problems of anti-social behaviour. Any decision to implement an SLS must be consistent with the council's housing strategy and part of a coordinated approach for dealing with homelessness, empty homes and anti-social behaviour. The council must be satisfied that there are no other courses of action that might provide an effective remedy, and that the introduction of an SLS will assist in dealing with the problem.
Councils can implement an SLS, provided they meet all of the requirements in the Housing Act 2004:
- The area must have low housing demand; and
- The SLS must contribute to the improvement of the social or economic conditions of the area.
Or:
- The area is experiencing a significant and persistent problem of anti-social behaviour;
- Private sector landlords in the area are failing to take appropriate action to combat the problem; and
- Making an SLS designation will lead to a reduction in, or the elimination of the problem.
The council must have also consulted everyone affected for a minimum of 10 weeks.
Low housing demand
When deciding if an area is suffering from low demand, a local authority must take into account:
- the value of the properties in the area in comparison with similar properties in comparable areas;
- the turnover of occupiers in the area; and
- the number of properties available and the length of time they are unoccupied.
Fit and proper persons
When operating an SLS, local authorities must also assess landlords for:
- management competence;
- being 'fit and proper'; and
- the suitability of their management structures and funding arrangements.
When determining whether a landlord is 'fit and proper', local authorities can consider factors such as whether the landlord has been involved in any fraud, practised unlawful discrimination, broken any housing laws or breached any relevant code of practice.