Landlord licenses aren’t going away – but who do they actually help?

Wales is the first country in the UK to make licenses a legal requirement for all landlords in the private rental sector. The proposed law will come into effect in the autumn. “The new legislation we are introducing will not only improve the situation for tenants – informing them of their rights and responsibilities – it will also help good landlords by improving the sector’s reputation,” says Welsh housing minister Lesley Griffiths.

“When Rent Smart Wales is introduced this autumn, it will provide a simple way for landlords to register and for them and their agents to become licensed. Ahead of the changes, I encourage landlords and agents to subscribe to register their interest and to receive useful news and updates.”

In addition to applying for a license, landlords will be required by law to register their properties. In theory, this will result in a greater degree of transparency, accountability and trust in the Welsh private rental market. Any landlord who does not wish to comply can appoint a licensed agent to manage their property – because estate agents can always be trusted to do right by tenants, right?

I’ve said before that accreditation and licensing programmes for landlords are a waste of everyone’s time and money, and I’m not the only one with concerns about the precedent that this development in Wales sets for private landlords in England and Scotland.

This flawed scheme is far from smart,” says Mark Isherwood, the Welsh Conservative Assembly’s shadow housing minister, “because Labour ministers refused to listen to the sector and empower vulnerable tenants. Simply waving a stick won’t work and I fear good landlords will continue to be penalised.”

Douglas Haig, vice-chairman for the Residential Landlords Association (RLA) in Wales, agrees that the majority of landlords are being punished for the unscrupulous conduct of the minority:  “Whilst we encourage all landlords to comply with the new regulations and follow the Welsh Government’s guidance, the RLA believes that this will detract local authorities’ attention away from tackling the minority of landlords who are criminals and stretch resources further,” he says. “We believe that existing regulations in the private rented sector are sufficient to tackle the criminal landlords, however we do not see adequate enforcement of the powers that already exist.”

Selective Landlord Licensing is currently being trialled in areas all over the UK, with many more cynical individuals viewing it as little more than a revenue-spinner for local councils. “My opposition is on the grounds that the scheme will add cost without adding any value,” writes Croydon landlord Robert Ward. “As such it will be bad for Croydon tenants as well as Croydon landlords.”

Ward cites the case of an East Ham landlord who crammed 26 tenants into a three-bedroom house, a case which the council tried to use as an argument for the necessity of licensing (without acknowledging that they had already neglected to enforce the licensing of the property as multiple occupancy).

Are we to take comfort in the fact that the authorities clearly have no idea what they’re doing when it comes to regulating the private rental sector? I fail to see how treating landlords like de facto criminals will benefit tenants, especially when focusing on the innocent allows the guilty (and their victims) to continue to fall through the cracks.

George Spencer is CEO at Rentify.