The Housing Act 2004 provided for the introduction of a scheme of selective licensing of private landlords in a local housing authority’s area. This selective licensing was intended to address the impact of poor quality private landlords and anti-social tenants.
It was primarily developed with problems in areas of low housing demand in mind, although the Act does allow for selective licensing in some other circumstances. Many of the provisions relating to selective licensing are similar to those relating to the mandatory and discretionary licensing of Houses in Multiple Occupation (HMOs).
Many councils up and down the country (around 40 councils have either introduced or are planning to introduce borough-wide schemes) most recently Liverpool as an example, are using the “selective licensing” rules within the legislation to impose on landlords blanket provisions across whole boroughs, towns and cities. This means that individual private landlords are seeing average charges of £500 for every unit they let.
The practice is now becoming so common place that it would be easy to assume a government directive had been written. But this is not the case. Cynics argue there may be other motives behind this, not least of which may be an easy income target for cash strapped councils?
Manchester City Council ran a selective licensing scheme for five years and has recently concluded the scheme was not worth the time and money and did not achieve its objectives. This experience has led Councillors to consider alternatives to traditional licensing. Some proposals include providing tax breaks to good landlords, while ‘zero tolerance’ sanctions on criminal landlords will send a clear message to the rogues. The council is to lobby Government for new powers under the promises of devolution.
However, the Department of Local Government and Communities (DCLG) now says it believes that for an area to be eligible for selective licensing it must contain a “high proportion of properties in the private rented sector”, relative to the total housing accommodation in that area.
DCLG has announced proposals that would mean that an area must meet certain conditions, which includes five specific conditions, before the authority can consider introducing licensing. These include:
- Hazards caused by poor housing conditions,
- An influx of migration and,
- If the area is suffering from a high level of deprivation which,
- Affects a significant number of the occupiers of properties.
- If the area suffers from high levels of crime.
Therefore, councils in the UK could in future be prevented from introducing selective licensing for private sector landlords, unless these specific conditions are met.
In responding to the DCLG’s intention to introduce additional legislation for the licensing of private rented properties, Richard Lambert, Chief Executive Officer at the NLA, has said:
“The change in the legislation is welcome as it stops local councils introducing unnecessary borough-wide licensing schemes, without an evidence base.
“Instead it pushes councils towards resolving specific issues in targeted local areas by outlining the key criteria by which schemes should be implemented and judged.
“We hope to see this progress before the dissolution of parliament later this month”.
— LandlordZONE (@LandlordZONE) March 10, 2015