Selective licensing has been in place in several boroughs for some time, but few councils have gone down the route of applying for the Government approval required to extend the schemes across their entire locality. The pioneer of widespread licensing was London’s Newham Council, and it has just had its permission renewed. There were some delays before Government ministers gave the go-ahead, and they have insisted upon the exclusion of one postcode area, but the move is still widely regarded as an endorsement of Newham’s strategy.
Newham has been using its extended powers with prosecutions and banning orders. It has recovered millions in council tax, retrieved tenants’ deposits and has begun to rate letting agents. Newham is targeting many of the key issues that impact tenants: poor standards, unsafe properties and dodgy financial practices – all things the Government is itself vocal about whenever the private rental sector comes up for discussion as part of overall housing policy.
Until now, many councils have been dissuaded from applying for this blanket licensing permission because the process isn’t simple and can stretch the resources of a cash-strapped authority. However, with Newham’s proactive approach showing that results can be achieved and its substantial recovery of council tax income, that may well change. We should expect more councils to plan the expansion of their existing selective and HMO schemes to every landlord, every area and every property.
And when they do, it’s another cost the landlord has to stand. A landlord who already upholds high standards, follows all the regulations and has a good relationship with his or her tenants will be paying a fee of a few hundred pounds for the privilege of carrying on in the same way.
Councils will have administrative costs, there’s no doubt about that, but we should also be aware that there’s considerable variation in the fees councils charge for licensing, and the way in which schemes are administered. Brent council, for example, charges £340 for a 5-year licence. Pop across to Croydon and you’ll be paying as much as £750. On top of fees, licenses may be dependent upon things like training, professional body membership and inspections. The sums involved may not be huge, but margins are being eroded all the time, and most of these licences are on a per property basis. If you have properties in more than one council area, you could easily be jumping through completely different sets of hoops.
We’ve no objection to high standards in the PRS – we’re all for them, but we’re not convinced licensing is the way forward. It will penalise the responsible landlord and be ignored by the dodgy one who currently ignores every other bit of property rental legislation.
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