Landlords

Does licensing improve rental standards?

As part of the government's current review of selective licensing schemes, could it be beneficial if a simpler landlord licensing system is considered?

Warren Lewis
|
3rd August 2018
question 55

As part of the government's current review of selective licensing schemes, could it be beneficial if a simpler landlord licensing system is considered?

According to automated rental payment provider PayProp, the answer is yes. The company says that a uniform and consistent landlord licensing policy may be more effective and easier to enforce.

The Ministry of Housing, Communities and Local Government (MHCLG) recently announced that it is assembling a panel of independent commissioners which will be responsible for gathering evidence on existing selective licensing schemes from key stakeholders.

The review is set to determine whether the current schemes have achieved the aim of keeping tenants safe and improving standards in the private rented sector (PRS).

Selective landlord licensing schemes came into force in 2006 and allow local authorities to require landlords in a designated area to hold a licence - usually costing around £500 - for each rental property they own. Designed to limit overcrowding and reduce anti-social behaviour, selective licensing schemes are in operation all over the country with well-established operations in several London locations as well as northern cities such as Leeds and Liverpool.

Neil Cobbold, chief operating officer of PayProp in the UK, says: "There is certainly a place for selective licensing in the PRS but 12 years after being introduced, it's the right time to review its effectiveness.

The review comes at a particularly pertinent time when considering the extension of Houses in Multiple Occupation (HMO) licensing being introduced in the autumn."

How could enforcement be improved?

Selective licensing schemes are currently enforced by local authorities with significant fines handed out to landlords who don't comply.

Cobbold explains: "One of the biggest challenges for selective licensing is enforcement and having the required resources to operate schemes effectively. Implementing a 'one-size-fits-all' approach could make projects easier to enforce and level the financial playing field for landlords."

What's more, partnering licensing schemes with initiatives like the Rogue Landlord and Agent Checker in London as well as the national blacklist of criminal landlords could help them be more effective in achieving one of their main objectives - identifying rogue operators and raising PRS standards."

We hope these are the kinds of issues that will be explored as part of the ongoing review," he says.

Autumn update will come at the right time

When announcing the licensing review, the MHCLG said that the full findings will not be presented until spring 2019 but that there will be an update on the review's progress issued this autumn. Meanwhile, in October, mandatory licensing of HMOs is being extended to include all properties let to five or more people from two or more households. It is estimated that an extra 160,000 properties across the country will need to be licensed.

Cobbold says: "The proposed update on the review looks like it will be coming at the right time. Prior to the extension of mandatory HMO licensing, it will be interesting to see what stakeholder feedback the review has taken on board and whether there are plans to bring selective licensing and HMO licensing under a similar framework."

Agents who are involved in the licensing review should be proactive in providing feedback, Cobbold suggests.

He concludes: Letting agents could be among the most helpful stakeholders in this process. This is due to their significant client bases and the likelihood of their having a range of different experiences of selective licensing over a number of years."

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