"2022 has been another record year for licensing and fines handed out, with total fines now exceeding £8.1 million in London alone."
Fines handed out to rogue landlords and letting agents have grown by an average of almost £90,000 per month in 2022, creating a total of over £1 million for the year, according to analysis of Private Rented Sector (PRS) enforcement in Greater London by tech firm Kamma.
Fines since records began in 2018 now total £8,157,745.
52 property licensing schemes and consultations were launched in 2022. Kamma’s data shows that this is five more than the previous year, and almost 10 more than in 2020, highlighting the growing trend of yet more regulation targeting the PRS and a more complex set of rules for landlords to follow. More regulation also means bigger risk for buy-to-let lenders, with changing rules meaning more hidden HMOs on their books and new considerations at the originations stage.
Legislation and enforcement is set to grow: Kamma’s tracking of new consultations highlights that by July 2023 over 525 separate licensing schemes will be live. This represents a further 20 active schemes compared to December 2021, an all time high.
The size of the fines, which can total £30,000 per breach, also heighten the risk of arrears and Rent Repayment Orders (RRO) as landlords struggle to pay both the penalty and their mortgage. 78% of all agent and landlord fines are related to management and licensing of houses and HMOs, with the largest fine on record totalling £100,000.
Kamma's CEO, Orla Shields, commented: “2022 has been another record year for licensing and fines handed out, with total fines now exceeding £8.1 million in London alone. More regulations will mean that buy-to-let lenders will have more non-compliant properties on their books without even realising. And with enforcement and fines likely to increase in the new year, landlords faced with fines of non-compliance will struggle to maintain mortgage payments. Buy-to-let lenders need to start taking action to protect themselves against this growing credit risk by monitoring licensing compliance on all properties they lend on.”
