Luton is making yet another bid to introduce licensing schemes in the town following previous failed attempts over the past few years.

The council has been thwarted by landlords and letting agents as well as its own ineptitude but has now launched a 12-week consultation for an additional licensing scheme to cover all HMOs in the town and a selective licensing scheme that would cover all privately rented properties within South ward.

Luton tried to introduce a scheme in April 2018, faced significant local opposition and then went silent about its plans until December 2019 when its executive committee rubber stamped them.

But a group of agents, landlords and concerned residents got together and formed Luton Landlords and Letting Agents Ltd, whose solicitor launched a legal challenge, forcing the council to admit errors in its implementation and decision making, and the scheme was put on hold.

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There are about 4,576 HMOs in Luton which have prompted about 221 complaints every year since August 2018 when the previous additional licensing scheme ended, mainly about overcrowding, disrepair and inadequate fire precautions.

Hazards

The council says there are 572 private rented properties in South ward with serious Category 1 hazards.

Under the proposals, application fees for an HMO with up to three bedrooms would be £488 with an extra charge of £122 for each additional bedroom.

For the selective licensing scheme, the standard application fee would be £488 per property, regardless of its size. A £122 discount would apply for both if a property has an EPC rating of band C or above.

Councillor Tom Shaw, portfolio holder for housing (pictured), says: “The council is committed to good quality, safe, warm, affordable homes and where this is not the case, these schemes will act as a force to improve standards for the benefit of all residents in the town.”

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4 COMMENTS

  1. Few years ago, Boston Council in Lincolnshire tried to introduce a licensing scheme and they faced such a barrage of complaints that the proposals were scrapped. I know about it because I had a property within the borders of that scheme.
    Just for reference Boston has the highest level of EU migration in the country with a population increase at one point of 16% those people were entirely accommodated in the PRS the council built zero housing in that decade. Most were low paid farm labourers.
    The more I looked into the scheme and spoke to council administrators it became clear that they had no idea how the PRS works. They didn’t understand their own rules around anti-social behaviour etc. Their view was that a license would make landlords sort out anti – social behaviour, subletting and overcrowding etc yet when I pointed out that the council are the body with the legal powers and authority to enforce overcrowding etc and that the landlord had virtually no powers they seemed surprised. The council can issue fines for anti-social behaviour, I as a landlord cannot.

    It was also clear that they thought landlords were “Charging high rents” and the other usual stereotypical mantras dished out against landlords.
    I had to show (With basic examples) how the rent is directly related to the price of the property. I’m sure everyone is familiar with the formula.
    Annual rent divided by cost of property x 100 to give the percentage of annual gross margin.
    The staff at the council were totally unaware of that formula therefore had the notion of “High rents” it was just a finger in the wind exercise and a comparison with their own (Taxpayer subsidised) council house rents and council officers were genuinely surprised at how low the actual margins are.

    They also seemed to think that landlords encouraged overcrowding… again I had to explain that overcrowding and subletting works against the landlord. I don’t get any extra rent when tenants sublet but the property would suffer more wear and tear at my expense. Standard landlords (Not HMO’s) charge rent for a property not per person. Plus, HMO’s require different standards and again the council have statutory powers to enforce these standards.

    As a landlord I can’t be visiting the property every week to check who is living there… Surely the tenants would claim harassment, complain to the council and the council would be taking me to court.

    The council officers were also surprise when I said to them STRAIGHT that if they brought in a license then I would simply sell and invest in another locality. They were genuinely surprised, almost to the point of suggesting “You can’t do that” as if I was “Cheating” somehow. Like a naughty schoolboy.
    They hadn’t figured that out because they had their own “Council housing” as a base model. Clearly the council cannot sell up their rental stock and move unlike PRS.
    I have now sold the property mainly because of issues around sub-letting and the potential for another licensing scheme to re-emerge.
    The property was sold to a married couple as their family home so it is no longer available as a rental property. That sale was about three years after Boston council scrapped the proposal but I still wrote to the council officers involved so that they truly understood that “They can make whatever rules they like” and I can simply sell up and invest elsewhere.
    Many councils are left wing labour and have a class war mentality and simply do not take time to actually learn about the PRS they are blinkered and have tunnel vision. That is clear by the number of proposals that are put out there only for them to crash and burn after consultation.
    In the end good landlords leave licensed areas and the vacuum is taken up by dodgy characters providing dodgy accommodation, so in the end the council have more problems not less.

    Councils already have enough enforcement powers they just don’t use them properly and are trying to push the responsibility onto landlords… (Just at the Home Office cannot control borders but force us to do right to rent checks)
    If the govt and councils want landlords to sort out problems then give us the power to issue asbo’s etc. They won’t do that because that would weaken their own power base of course.

    • Such licensing schemes won’t make such properties affordable or cheaper to heat.

      Invariably LL will be better off selling to FTB.

      It just isn’t worth investing further in what will be dud properties.
      Licensing condemns such properties to lower market values.

      I would NEVER buy any property in a licencing area.

      Nottingham for example has citywide licencing.

      I would never invest in Nottingham.

      In fact many Councils introducing licensing are basically indicating where all the dud areas are so that LL can avoid investing there.

      All said and and done a flight to quality accepting that would probably result in lower yields is a far more effective business model as far as futureproofing a residential investment business is concerned.

  2. Totally agree licensing schemes add zero value to LL or tenant, the only beneficiaries are the staff at the council getting paid to shuffle paper around a desk.

    The lower end of the market is not worth the hassle…. My better off clients pay on time, zero trouble, zero damage so overall competitive because no damage to fix etc, no insurance claims, no cannabis farms, no “Pop up” brothels

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