Land­lords an­gry over li­cens­ing schemes

Prop­erty own­ers are an­gry with coun­cils for de­mand­ing sev­eral hun­dred pounds for li­cens­ing their prop­er­ties and claim it’s just to boost cof­fers – but coun­cils say it’s vi­tal to pro­tect ex­ploited ten­ants. Ru­pert Jones re­ports

The Guardian - - CLASSIFIED -

Land­lord li­cens­ing schemes are pop­ping up all over the coun­try as lo­cal au­thor­i­ties at­tempt to crack down on rogue oper­a­tors. Not­ting­ham city coun­cil’s scheme starts next month, while the Lon­don bor­ough of Bex­ley’s be­gins in Oc­to­ber, and Brighton is await­ing of­fi­cial ap­proval for a scheme that would af­fect 27,000 prop­er­ties. Lu­ton is one of a num­ber of other ar­eas dis­cussing the idea.

How these typ­i­cally work is that all land­lords pay sev­eral hun­dred pounds for a li­cence, and they, and their prop­er­ties, are sub­jected to le­gal checks – with penal­ties of up to £30,000 if they don’t com­ply.

Coun­cils say these so-called “se­lec­tive li­cens­ing schemes” are a key weapon in the bat­tle to im­prove stan­dards in the pri­vate rented sec­tor, weed out land­lords putting ten­ants at risk, and to deal with crime and an­ti­so­cial be­hav­iour – rub­bish in front gar­dens, noise and so on – of­ten as­so­ci­ated with badqual­ity ac­com­mo­da­tion. And some want even stronger pow­ers.

How­ever, some own­ers claim these schemes are a money-mak­ing ex­er­cise sim­ply de­signed to boost coun­cil cof­fers. A quick num­ber crunch sug­gests Brighton’s would bring in be­tween £12m and £16m, while Not­ting­ham will raise be­tween £14m and £23m. Some ar­gue that the worst crim­i­nal land­lords will sim­ply carry on stay­ing un­der the radar.

Late last month the gov­ern­ment an­nounced a re­view to look at how se­lec­tive li­cens­ing is be­ing used and whether it is work­ing well. What ex­actly are these schemes? Se­lec­tive li­cens­ing al­lows coun­cils to make it com­pul­sory for every pri­vate rented prop­erty in a spec­i­fied area to have a li­cence.

In these ar­eas, a land­lord must ap­ply for a li­cence if they want to rent out a prop­erty. This means the coun­cil can check whether they are a “fit and proper per­son”, as well as lay­ing down other re­quire­ments con­cern­ing the man­age­ment of the prop­erty and health and safety.

The schemes work in dif­fer­ent ways, but things a land­lord might be re­quired to pro­vide in­clude a valid gas safety cer­tifi­cate, an elec­tri­cal in­stal­la­tion con­di­tion re­port, a copy of the ten­ancy agree­ment and ev­i­dence of land­lord in­sur­ance. Typ­i­cally, a li­cence lasts five years. How many coun­cils are do­ing this? Lots. At least 55 ei­ther have a scheme in place or would like to set one up, ac­cord­ing to the Res­i­den­tial Land­lords As­so­ci­a­tion (RLA).

A num­ber of Lon­don lo­cal au­thor­i­ties run them, in­clud­ing Brent, which ear­lier this year won ap­proval to ex­tend its scheme into five more wards. Mean­while, the new Bex­ley scheme cov­ers four ar­eas – Thames­mead North, Abbey Wood, Lower Belvedere and parts of Erith. It started ac­cept­ing li­cence ap­pli­ca­tions ear­lier this month ahead of the 1 Oc­to­ber start date.

How­ever, it’s not just in the cap­i­tal. Gateshead has sev­eral schemes, Black­pool coun­cil runs one, and Brighton has ap­plied for ap­proval for a scheme that would cover 12 wards, in­clud­ing Pre­ston Park, St Peter’s and North Laine, and Hanover and Elm Grove. Not­ting­ham’s will cover “most” of the city – more than 30,000 homes – and comes into force on 1 Au­gust. How much is a li­cence? It varies. In Not­ting­ham they are £780, or £480 if you are a lo­cally ac­cred­ited land­lord, and a sep­a­rate li­cence is needed for each prop­erty, even if it’s one per­son who owns sev­eral homes.

Gateshead’s stan­dard fee ranges from £550 to £1,000, de­pend­ing on how early or late you ap­ply, while Bex­ley’s is £690, with an “early bird dis­count fee” of £371. The Lon­don bor­ough of Waltham For­est’s is £650, while Brighton is propos­ing a stan­dard £460, or £600 where the coun­cil has to do a lot of leg­work. Are land­lords un­happy? Yes, some are. David Smith, pol­icy di­rec­tor for the RLA, says the schemes rely on land­lords proac­tively mak­ing them­selves known to their lo­cal au­thor­ity. “Crim­i­nal land­lords who fail to pro­vide se­cure and safe ac­com­mo­da­tion to their ten­ants will not come for­ward,” he says. “Coun­cils need a much smarter sys­tem to find and root out those who will never will­ingly make them­selves known.”

A Guardian Money reader told us that he and his wife have a onebed buy-to-let prop­erty in the Belvedere area of Bex­ley. He claims the coun­cil is “cash­ing in” on the Cross­rail project by “fleec­ing” buyto-let land­lords, adding: “It ap­pears that the coun­cil has de­lib­er­ately picked the four wards most likely to ben­e­fit from any ‘Cross­rail bounce’. We bought the prop­erty ear­lier this year and spent more than £13,000 do­ing it up to pro­vide a re­ally nice place for a young cou­ple. It’s to be com­mended when coun­cils crack down on HMOs [houses in mul­ti­ple oc­cu­pa­tion] and rogue land­lords, but ... why are they go­ing af­ter pri­vate land­lords with one or two ten­ants rather than the main (po­ten­tial) of­fend­ers? It can only be a money-mak­ing ex­er­cise. How can they pos­si­bly jus­tify such an out­ra­geously high charge?”

Bex­ley coun­cil says it re­ceived strong sup­port from owne­roc­cu­piers, ten­ants and busi­nesses. It adds that its fees “are among the low­est in Lon­don”, with dis­counts to sup­port good land­lords who come for­ward. It says it has been work­ing to iden­tify what it can do to sup­port re­spon­si­ble pri­vate rent­ing. What’s the view of other coun­cils? Ne­wham in Lon­don – the first coun­cil to li­cense all pri­vate prop­er­ties – prob­a­bly spoke for many last week when it said it wanted tougher civil penal­ties to dis­cour­age rogue land­lords let­ting dan­ger­ous and over­crowded prop­er­ties, and the power to con­fis­cate prop­er­ties from the worst of­fend­ers. What of the “money-mak­ing” claim? Lo­cal au­thor­i­ties firmly re­ject this: Brighton says it is only al­lowed to cover ad­min­is­tra­tion costs, while Not­ting­ham says it is not per­mit­ted to make a profit. I’m a ten­ant. Can I check the prop­erty is li­censed? Yes. By law, coun­cils have to keep a reg­is­ter; Ne­wham has an on­line search­able data­base. In the­ory ten­ants will be able to “shop” land­lords and land them with large fines.

‘Coun­cils need a much smarter sys­tem to find and root out crim­i­nal land­lords’ David Smith Pol­icy di­rec­tor, RLA

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