The increase in selective licensing of landlords across England and Wales is a trend that many will have noticed in 2013. With selective licensing a local council can force all landlords in an area to be licensed if it perceives problems of low housing demand and/or anti-social behaviour. Critics, however, see it simply as a way for local councils to increase revenue (here is a recent example from North Somerset). Since licensing – whether of all private landlords or just HMOs – is often applied to entire districts, many good and successful landlords are being unfairly punished with high fees just to get a license which has no effect on the way they conduct their business. There is also the risk of unfairly damaging the reputation of landlords in general.
Rentify therefore urges the government to place stricter guidelines on local authorities for implementing licensing. We also urge all of our landlords to find out about any plans for licensing in their areas and use the designated 10 week consultation period to express their concerns and arguments against the proposals.
Currently local councils have general consent from central government to implement licensing if that local council thinks it’s necessary. Several factors can be taken into account:
- The area is experiencing or is likely to experience low housing demand
- The area is experiencing anti-social behaviour (including crime, nuisance and/or environmental crime)
- There is a lack of mixed communities (e.g. a high proportion of rented properties in comparison to owner occupied properties)
- There is lack of local facilities (e.g. shops closing down)
It is often not too difficult for a council to argue that at least one of these things is a problem. Although it must ‘take reasonable steps’ to consult those potentially affected by licensing, this is hardly much of an obstacle. The system would be fairer if councils had to apply to central government for consent and provide local landlords’ arguments as part of the application. The government should also impose stricter conditions, such as ensuring an area has a specific percentage of rented properties in comparison to owner occupied to qualify for a ‘lack of mixed communities’.
The risk for landlords here is not just the extra financial burden. If selective licensing grows, it would provide critics of the private rented sector with ammunition for demanding even further regulation. And it’s likely that the financial motivations of the councils who implemented the licensing would pass unnoticed. This is why landlords must do all they can to fight plans for licensing in their area.