PRS licensing schemes are set to increase by a staggering 39% next year as councils prepare to collect an estimated £400 million in selective, additional licensing scheme fees and fines and £1.9 million in recovered unpaid taxes by landlords.

The astonishing figures have been published by tech platform Kamma, which specialises in compiling data on property licensing across the UK for landlords, letting agents and councils.

This includes the existing 386 mandatory and 124 discretionary schemes already in operation plus the 48 set to start and further schemes under consideration.

Funding gap

Kamma claims authorities are both planning many more licensing schemes and being keener about enforcement in part because it is one of the easier ways to plug the local authority funding gap that is set to widen next year to £3.2 billion.

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It also claims that councils see property licensing as a chance to improve standards at a time when studies show that poorer quality housing correlates with the faster spread of Coronavirus.

As LandlordZONE has reported before, Newham in London is the UK’s most enthusiastic proponents of PRS licensing both in terms of extending selective and additional schemes, and enforcing them.

Kamma warns that many councils have been eyeing its successes and intend to follow suit next year.

orla shields kamma

Its CEO, Orla Shields, says: “Discretionary licensing has been a Local Authority prerogative since 2006 but, with budget gaps widening and the well-known successes of Newham council in generating additional tax revenues, we’re seeing more proposed schemes in consultation than ever before.”

The platform is backed by leading European venture capitalists Pi Labs, Triple Point and M7 Structura and recently raised £1.6 million to fund its products for letting agents and lenders.

9 COMMENTS

    • Rather than small licensing schemes why not every rental property to be licensed.
      No more than £100 every 5 years.

      Also all LL to be licensed at £100 every 5 years.

      There are millions of rental properties and 2.5 million LL.

      That should create enough £100 for most councils.

      For those poorer areas where renting tends to be more prevalent that would generate a lot of licensing income.

      Ensure RRO are in place for LL who refuse to licence.

      Of course such a National LL and rental property licensing scheme would result in millions being made homeless as there are millions of fraudulent tenancies.

      Just two examples of these fraudulent tenancies are

      Accidental LL letting out homes with residential mortgages without obtaining CTL which means LL are breaching insurance and mortgage conditions.

      LL letting to DSS tenants where their BTL mortgage conditions specifically prohibit letting to such tenants.
      With fraud also on LL insurance as DSS normally results in increased insurance premiums.

      These are just two examples of the fraud that occurs in the PRS.
      There are many others.

      A robust Licensing system would detect these frauds resulting in millions of homeless and many properties being repossessed by lenders where LL have breached mortgage conditions.

      Because the questions AREN’T being asked which would be the case if there was a National Licensing scheme nobody is aware of the full extent of fraud in the PRS.

      Quite frankly lenders don’t want to know.

      Just imagine lenders being required as part of licensing to provide CTL proof for tenants and tenant types!!-

      Many lenders would discover their mortgagees are committing mortgage fraud.

      What would lenders then do!?

      Licensing is a way to reduce PRS provision as many LL won’t be able to provide the correct information for licences to be granted.

      With the threat of RRO then many of those fraudulent LL will sell up.

      Licensing every rental property and LL may result in an improved PRS but it would definitely result in a far smaller one abd mass homelessness.

      Letting sleeping dogs lie might be the most pragmatic response to these issues.

      The effects are plain to see in Tower Hamlets.

      LL have sold up and moved away from letting properties there.

  1. All my tenants will be charged higher rents in that case – way to go government. They pretend to love tenants but in reality they hate them because with every new regulation / cost a rent increase will be the result.

  2. Every industry in the U.K. faces increased regulation and cost to the detriment of the very people they claim to be protecting, with the potential collapse of that industry or poorer outcomes. Stop interfering. Create jobs elsewhere.

  3. When the Council introduced a Selective Licensing scheme in my area all landlords told them the licence fee would be recovered via an increase in the rent. The Council thought this was “unfair” but all businesses pass on their costs, that the way business works, , their scheme now costs tenants in the area more rent.

    As all these schemes are just a money generator for the Council and despite all the regions landlords protesting against, the NLA as it was then, actually gave their support to it. Which just compounds how poin tless the NRLA actually is.

  4. Landlords are just an easy target to raise more tax: SDLT Licencing. There are some merits to licencing if the councils use the extra income to seek out the bad/rogue landlords and provide services to LL’s and tenants in the PRS

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