New Government funding and a crack-down on rogue operators is resulting in a whole host of new licensing scheme proposals being introduced throughout the country.
If this improves safety and drives out more rogue landlords then most landlords will say so much to the good, but this comes at a cost to individual landlords – it means licensing fees for every letting, the actual amount depending on that set by their local authority, but they range from in the region of £400 to £800 per property every five years.
There are two main types of licensing schemes: selective and additional, as well as mandatory HMO licensing.
In areas where selective licensing applies, and as the name implies, it may affect part or the whole of a district of borough, landlords must apply for a licence if they want to rent out a property.
This means the council can check whether the landlord is a “fit or proper person” to be a landlord, and will be making other stipulations about the management of the property and safety measures.
Additional licensing comes under Part II of the Housing Act 2004 and applies to certain types of Houses in Multiple Occupation (HMOs) that fall outside the scope of the mandatory HMO licensing scheme. To decide if you have an HMO you can read the legislation itself (Sections 254 – 260 Housing Act 2004), though a simpler guide is on the houses in multiple occupation gov.uk website.
As a general rule an HMO is any property (house or flat) occupied by three or more people comprising two or more households (friends or strangers, not families) who share facilities (kitchen, bathroom and/or toilet) and occupy the property as their only or main residence. If in doubt you should seek a determination from your local council.
The penalties for non-compliance are very high, and it is thought that since a recent change in legislation there are many thousands of otherwise law-abiding landlords unaware they have an HMO, or they are operating in a selective licensing area.
Councils are introducing landlord licensing schemes at an alarming rate and not just the mandatory HMO schemes but selective and additional ones as well. With new Government funding, many councils are now clamping down on rogue landlords by introducing new selective and additional licensing schemes, so landlords need to keep an eye on their council’s website for information on this.
A local authority may designate either the whole or a part of its district as subject to selective licensing of residential accommodation. Before making any decision to introduce licensing the local authority must consult with those who are likely to be affected, including those who live, work or operate businesses in adjoining local authority and all areas where they will be affected.
A decision to designate an area subject to selective licensing may need approval from the Secretary of State for Housing, unless a minimum 10-week consultation period has been allowed after it produced a draft proposal identifying what is to be designated and its consequences. Selective licensing can then come into force no earlier than three months after the designation has been approved.
Here is a sample of councils currently in consultation or introducing schemes include:
Oadby and Wigston Borough Council is consulting on selective licensing in one of its wards which will close 30 January 2020.
Oxford City Council has confirmed that it plans to publish a consultation this summer setting out the case for introducing borough-wide licensing covering an estimated 20,000 private rented homes in Oxford. Currently the city council requires all HMOs to be licensed.
Bournemouth, Christchurch and Poole Council has started a consultation on proposals setting out the introduction of selective and additional licensing schemes in the borough. The consultation is to close on 6 April 2020 and will affect Southbourne, Boscombe, Pokesdown, East Cliff & Springbourne, Westhill, Westbourne and Bournemouth Town Centre, Poole Town, Winton and Charminster.
Coventry City Council has confirmed it will progress a selective licensing scheme following the outcome of its consultation, and the housing cabinet confirmed that additional licensing will also be implemented. The city-wide additional licensing scheme is due to take effect on 4 May 2020.
In addition, Birmingham City Council plans to introduce a city-wide Article 4 Direction from 8 June 2020. This means that landlords in Birmingham have until 7 June 2020 to undertake developments to change the use of a house / dwelling to a small HMO under permitted development rights. Landlords with existing small Houses in Multiple Occupation (HMO) should declare these to the Council before the direction takes effect. They will need evidence of their existing use as an HMO letting.
Elsewhere, Liverpool City Council have been refused the renewal of their city-wide licensing scheme. The new housing secretary Robert Jenrick has turned down an application by the Council to extend Liverpool’s city-wide selective licensing scheme for private sector landlords for another five years.