Leading Nottingham landlord Mick Roberts tells LandlordZONE about the unintended consequences of licensing in his home city.

A leading Nottingham landlord wants councils around the UK to understand how private rental market licensing is achieving the opposite of what the schemes usually set out to achieve.

Mick Roberts, who runs Advance Properties and its large portfolio of properties across the city (including 36 within its licensing scheme), says the unintended consequences include pushing up rents and making it more difficult for tenants to find property to live in.

“The rental market used to be well supplied, but I’ve heard about 20 good, credit-checked, working tenants queuing up for properties that come on to the market, which wasn’t the case before the licensing system came into force,” says Roberts.

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Nottingham began its schemes in August 2018. They include huge swathes of its central and inner zones, which are covered by both a selective licensing and large/small HMO regulations too.

Rent rises

“The rents have shot up massively here in Nottingham and it’s now one of the most expensive cities in the region,” says Roberts.

“I believe this is because the licensing system is helping reduce the levels of stock available as well as pushing up costs massively for landlords, both of which are putting upward pressures on rents.”

He says the extra costs include the expense of licensing each property which is £480 per property for accredited landlords, and £780 for those who aren’t, as well as the upgrades that the council then asks for after inspecting a property, which often costs a lot more.

“It’s a mad system because I’ve got tenants who have been with me for nearly 20 years without any problems and suddenly the council is all over me to improve the properties after an inspection,” says Roberts.

“And it’s not joined up – one side of the council is clamping down on landlords and forcing them out of the market, but their housing colleagues pick up the bill when tenants become homeless.

“I’ve had to evict tenants who, before licensing, I would have deemed to be marginal but not worth evicting, however the extra costs brought in by licensing have forced my hand.”

Roberts says he believes the city council is punishing good landlords like him but failing to catch the truly rogue operators.

“The licensing system is sucking money out of the system – I used to replace six bathrooms or kitchens every year, but I can’t afford to do that now, so the good stock is getting worse,” he says. “They’re punishing everyone to get at the minority of bad landlords – I know one landlord who was fined £2,000 for each of his six properties because he had not applied or a licence, but when they visited the properties they were in good order and the tenants were happy. Where’s the sense in that.”

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8 COMMENTS

  1. Couldn’t agree more. Successful landlords who do things correctly being pushed out of the rental market by politicians who can’t do their own job successfully. All it will do long term is push landlords to cash in and invest elsewhere creating a shortage of quality rentals. The rogue landlords will continue achieving nothing. Common sense isn’t so common 🙄

  2. Nottingham City Council expected LLs to absorb the cost of the licence even though LLs told them rents would go up to compensate. The result is one of the fastest increases in rent in the country over the last year. 18 months on and still only half the estimated LLs have applied to the scheme.

    Additionally the £780 fee, which is going up this year because the council have underestimated the revenue, is the same for all houses regardless of size so the impact on the rent on a 1 bed is significantly higher than on a larger property.

    • Expensive LL licensing is just a tax on LL.
      I doubt there would be many LL who would complain if there was a National LL Licensing Scheme administered by Councils on Govt behalf with the Licence fee being £100 per property every 5 years.
      No LL would be permitted to let without a Licence.
      No LA would be allowed to let any property without sight of the LL licence.
      Problem is that Govt knows very well that vast numbers of people are housed by illegal LL.
      There would be mass homelessness if only Licensed LL were able to provide rental accommodation!

      So idiot Govt continues to allow Councils to come up with these stupid money making for the Councils, licensing schemes.
      All aimed at getting rid of small LL.

  3. Boston (Lincs) tried to introduce a blanket scheme a few years ago I had a rental property in the town and argued strongly against it. It became clear in conversation with one of the leading “Council Officers” that they had no idea how the Market actually works. The words extortionate rents was used in the publicity yet this officer had no idea that rents are directly equated to the cost of buying the property. If a property costs £100k and the “Investor” wants a reasonable return (The FTSE 100 returns roughly 7.5% annually) then the rent “Must” be £620 per month to earn 7.44% why should I be a landlord if the council is going to make it impossible for me to make money (I might as well just invest in the FTSE 100 and stay away from the rental market. According to the last census 2011 the population increased in Boston by 15.9% in 10 years.
    ALL of those people were accommodated by the Private landlords (Boston Council built close to zero new homes in that period) The government and local councils should be thanking the private sector investors not complaining about them. Two years later I sold the property (It went to a married couple) and I re-invested in an area where it seems the council is not looking at mandatory licensing. So Boston LOST a rental property. How does that help tenants? Local councils already have the powers to deal with “Rogue Landlords” They just take the lazy route of thinking blanket licensing will fix the problems, It wont. The council should be tackling issues around bad behaviour related to HMO’s, Bad plumbing, dodgy wiring etc using the powers they already have. Target the guilty not the profession and NEVER forget that capital is liquid I can invest anywhere and in any sector thereby I can also withdraw investments from a sector just as easily. Until government and local authorities want to build and rent out properties they should BACK OFF and leave it to those who want to get involved. The population of the uk has grown 4 million in the last 10 years. If the government are not prepared to house these people then they should step aside and allow those who are doing the job to get on with it, make profits which they can then reinvest in the sector to meet future demand.

  4. Yes 100% spot on we run a property management company in London, the licensing prices are out of control, I also want to point out that if you have ever visited a council property I do not think they would be granted a license !!!!! But they expect the private landlord to be on much a higher standard than themselves.

  5. I put one property for rent on the market in Nottingham recently, I had 87 enquiries within 3 weeks, most of the people were looking to move is due to the fact that their LL are selling.

    There are going to be a lot of homeless people in Nottingham, I wonder if Nottingham city council has realised what they have done? I don’t know how the council will cope with the housing situation. I don’t think one department talks to the other departments.

    The government gets more tax by introducing section 21 and the Nottingham city council gets more revenue by introducing license, resulting the rent shoot up there, the people that need houses the most lose their homes, because LL are forced to leave the rent market.

    Who really benefits it all in the Robin hood land, not the poor tenants for sure.

  6. Paradoxically, the licensing schemes and the constant drip drip of new rules and new fines and threats of fines is now giving a competitive advantage to the bad landlords. Councils lack resources to enforce the rules that exist but to show they are “doing something” simply ask for more and more powers to deal with “rogues”. The rogue doesn’t much care if he is in breach of 5 regulations or 15. The conscientious landlord has to incur extra expense to comply. The conscientious landlord is also “low hanging fruit” for enforcement.

  7. I am a landlord with more than 30 properties in Nottingham city and the outlying boroughs. I attended the consultation meetings before the scheme was implemented and some of the landlord/council liaison meetings since it has been running. At each meeting the overwhelming opinion expressed to the council by landlords was that rents would have to go up. There has been constant dishonesty from the council with regard to the upward pressure on rents and the increased difficulty encountered by less than perfect tenants when looking for accommodation. They are still suggesting that “well run” properties should not see rent rises. I resent this implication as I look after my properties well and have a good relationship with my tenants. I cannot understand how public servants can justify such anti landlord bias and dishonesty.

    I know of many single property landlords who have sold up and left the market in the last few years due to the increases in regulations and licensing. Each house is lost to the rented sector as they usually go to first time buyers due to the disisentives faced by landlords.

    In my first twenty years as a landlord, I never needed to evict a tenant but since the licenses came in I have had to evict several families due to overcrowding (new babies) and various anti-social problems I would have worked through these problems before, but now I cannot take the risk as the council can hold me responsible for tenants behaviour. Can I trust the council to behave fairly in these cases? I suspect not.

    In several of my Gedling propetries, I have let to tenants from the city who have been made homeless. Their first months rent and deposit were provided by Nottingham City. I believe Nottingham City are farming out their homeless tenants to the outlying boroughs. This will help them disguise the true increase in homelessness which there licensing scheme has greatly contributed to.

    The last property I advertised in the city had over fifty replies, even with a no growing plants warning, so the demand out there is huge.

    This licensing scheme has made life more difficult for the poorest and most disadvantaged tenants, the very people it was supposed to help. Sadly the anti-landlord crusade looks likely to continue in Nottingham

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