Local councils will no longer have the authority to implement borough-wide landlord licensing schemes according to a controversial announcement made by Central Government this week.
The Selective Licensing powers that have been in place since 2010 aimed to combat issues such as anti-social behaviour and deter rogue landlords. However, the Conservative Housing Minister, Brandon Lewis argued that the majority of landlords ‘offer a decent service’ and that measures ‘only serve to push rents up’ for tenants.
From April 1st, councils will need to seek Government approval before implementing such a licensing scheme if it is to cover a wide area.
The National Landlord Association (NLA) were pleased with the judgement, which came after sustained lobbying and a damming report on the state of landlord licensing across the country, released in February.
So is this good or bad news for landlords?
Whilst councils have been able to introduce compulsory licensing for a number of years, there has been a surge in the number of councils doing so recently. Just last month, Liverpool City Council launched the biggest scheme of its kind in the country while most significantly, Enfield council were taken to court and made to rescind theirs, marking an important change of direction.
The intention of licensing was to raise standards and uncover rogue landlords, by requiring landlords’ properties to meet certain standards. But many landlords have argued that the fees to hold a licence, which can cost several hundred pounds per property, are doing nothing to raise standards but act more as a ‘tenant tax’.
For professional landlords, Selective Licensing Schemes should not be an issue. If they are accredited and operate ethically, then the only impact to them is cost-related. However, for amateur landlords who are not experienced in managing and maintaining rental properties, the cost of the licence and any improvements needed prior to being granted one could have a serious impact.
Generally, any measures to raise standards within the private rented sector should be celebrated, especially in areas worst affected, but care should be taken not to financially penalise good landlords as opposed to spending time using enforcement powers to regulate the bad ones. Rogue landlords will be unburdened by the introduction of Additional and Selective Licensing Schemes and it is they who cause the problems.
If there was better policing of the existing licensing and planning regulations then the ‘problem’ areas would improve. It is difficult to see how rogue landlords would be caught out by the introduction of extra licensing schemes when they do not obey current regulations.
Additional and Selective licensing schemes will be an extra cost to the best landlords which may prevent them establishing more good quality private rented accommodation and allowing the illegal ones to flourish, which will do little to improve neighbourhood balance.
Having to seek government approval for the introduction of a Selective Licensing Scheme should ensure a more meaningful consultation period and introduction of these schemes only where appropriate.
