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Are Landlord Licensing Schemes really about Rogue Landlords?

  • Posted:  6 years ago
  • Categories:  Landlords
Landlord Selective Licencing Scheme - Valor Properties

The purpose of selective licensing is to help reduce socially unacceptable behaviour from occurring with rogue landlords, as well as to try to force them to clean up their acts. Wherever selective licensing is applicable, landlords must apply for a license if they would like to use their property within the rental market. This, in turn, means the council can monitor the property and landlord, as well as create stipulations regarding safety measures and property management.

Many landlords believe this licensing is nothing more than a means of boosting a councils coffers. Local authorities have a goal to crack down on rogue landlords who aren’t complying with standards in the private sectors. These efforts will not only weed out those who are putting tenants at risk, but also reduce noise issues, uncleanliness, crime, and other quality issues.

How does selective licensing work?

Either the entire borough or a portion of it is subject to the Housing Act of 2004’s designation. Under this designation, it places a requirement for all privately rented accommodation to possess a license from the relevant council. Those who are not in compliance will undergo criminal prosecution and receive up to a £30,000 fine. The license is typically good for up to five years.

In order to determine if a landlord complies with licensure, the council will typically check for:

  • A certificate stating valid gas safety inspection has occurred
  • A condition report for electrical installation
  • A written copy of tenancy agreements
  • Written evidence of insurance for landlord

Is every council participating?

For a local authority to declare a selective licensing area the area must be, 1) An area of low housing demand and/or 2) An area affected by anti-social behaviour where the private landlords have failed to take steps to control anti-social behaviour by their tenants. From April 2015 an area which contains a high proportion of properties in the private rented sector (in relation to the total number of properties in that area) can also be designated for selective licencing.

Your local council will be able to tell you if your property is in a selective licensing area, some of the areas that have introduced selective licensing include:

  • Brent
  • Croydon
  • Durham
  • Hastings
  • Liverpool
  • Newham
  • Oldham
  • Peterborough
  • Southwark
  • Thanet
  • Waltham Forest

What are the costs?

The fees vary based on the property’s location. For example, those who are a locally accredited landlord in Nottingham pay £480 and, if not, it’s £780. Even if one individual owns multiple homes, a separate license is required for every property. In Gateshead, the fees range from £550 to £1,000 and are dependant on how early or late landlords apply. Early bird discounts are given to Bexley’s landlords making their payment £690 after the fee of £371 has been deducted.

Landlords who own more than thirty properties, or letting agents with more than 120 properties, can spread their application process over a three month period to help with associated costs. The council must, however, receive a list of properties and a schedule regarding application submissions. This agreement was made as a means of making it easier for those landlords who want to work hard to remain compliant, as well as to determine which ones would be easier to weed out from the rest.

What if the landlord isn’t rogue?

Some landlords are delivering excellent quality services to their tenants and keep well managed proprties. However, this doesn’t mean they’re exempt from the scheme. Instead, the council will offer a discount in many situations if the landlord has accreditation. It’s the landlord’s responsibility to check with their council regarding this information.

How do landlords feel about schemes?

Those who are doing their best to keep their properties up to par are upset. Many can’t understand why the council is going after those in the private sector who are letting out to one or two tenants, rather than those who are running an HMO (houses in multiple occupation). Those who aren’t rogue landlords believe this scheme is a way for the council to line their pockets, rather than sort out the criminals.

Some property owners are in support of the council, however, and are coming forward expressing as such. In Bexley, the landlords are receiving discounts for their exemplary service and high-quality standards during licensing. These practices have support from local businesses, owner-occupiers, and tenants who are coming forward about good landlords.

Is this a money-making scheme?

Councils across the board are holding firm and rejecting this notion. They are making it clear that landlords should not inflate rents to cover the costs of licensing, and that the council does not stand to profit from cracking down on criminals. The purpose of costs associated with licensing is to cover administrative costs and nothing more.

Are tenants privy to licensing information?

The council must keep a register stipulating which properties have a license and which do not. Tenants have the right to view these records. The practice allows tenants to ensure they’re renting a safe property that meets their standards.