The Government recently made a surprise announcement that it was going to undertake a review of selective licensing.
What is selective licensing?
Selective licensing is where the whole or part(s) of a borough are subject to a designation under the Housing Act 2004. The designation makes it compulsory for all private rented accommodation in that area to get a license from the local authority.
Failure to comply is a criminal offence that can result in prosecution and a hefty fine or a civil penalty of up to £30,000.
What did the Government announce?
The Government announced a review to look at how selective licensing is used and find out how well it is working.
In areas where selective licensing applies, landlords must apply for a licence if they want to rent out a property. This means the council can check whether they are a “fit or proper person” to be a landlord, as well as making other stipulations concerning management of the property and appropriate safety measures.
The review will see independent commissioners gather evidence from local authorities and bodies representing landlords, tenants and housing professionals.
The review’s findings will be reported in spring 2019. There will be an update on progress in autumn this year.
What does this mean for landlords?
It is unclear at this stage what this may mean for landlords. That will depend on the outcome of the review.
We do know that landlords have not been happy about the way some selective licensing schemes have been administrated and also about the fees involved.
There has been a great deal of controversy surrounding some of the schemes, most specifically the ones run by Liverpool City Council and Nottingham City Council where landlords called into question the implementation, costs, and legality of these schemes.
Landlords believe that the ethical operators are already providing compliant accommodation, while rogue landlords will continue to fly under the radar due to lack of enforcement by local authorities.
Hopefully, the review may take into consideration that existing selective licensing schemes may be deterring landlords from providing accommodation in SL boroughs. This is at a time when housing waiting lists are rising and local authorities are increasingly struggling to discharge their housing obligations into the private rented sector due to lack of social housing.
One thing we can be sure of is that the Government has the private rented sector in its sights and will be using this review to assess if blanket selective licensing should be introduced.
Your local Northwood office will be able to advise you on current selective licensing requirements in the local area and what you need to do in order to be a compliant landlord.
Northwood is one of the largest and most recognised estate agents in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.