Selective Licensing in Leicester - ACT NOW!

An update on the status of Selective Licensing in Leicester, now that the new scheme has been introduced and has been running for nearly six months.

It is critical that if you have not already applied for your license, you do so now.

Why the rush?

It’s important to act now for two primary reasons:

First, there’s a valuable incentive of a 10% discount on the five year license fee – which at £1090 is the highest in the Midlands! – which expires after six months. That’s 10th April 2023.

Second, you are a little exposed right now if you have not applied: legally you have an obligation since 10th October 2022 to have a license for Selective Licensing in Leicester. In theory a tenant could now sue any landlord who does not have such a license with a Rent Return Order, as such a landlord is in breach of their obligations.

Who does Selective Licensing affect?

The areas affected are in this map.

To clarify, this covers the following wards:

  • Saffron
  • Stoneygate
  • Braunstone Park
  • Westcotes
  • Fosse
  • Rowley Fields

Overall, this will affect nearly 9000 landlords

What has surprised me is that of the landlords we have contacted who we know to be in these areas, not a single one has come back to us to confirm they have secured a license. They may of course have done so, but I have to voice a concern.

OK, what happens if I ignore it?

Penalties start to mount up if landlords decide it’s not something they are going to focus on. In the first instance, you have 18 months to apply before the Council will issue the first level of penalty, at £200. Maybe not a huge amount but an undeniable waste of money.

But things get pretty serious after that. It’s too early to say how Leicester City Council will play this, but Oadby & Wigston Council have just issued a fine of £3000 to a landlord we know in that area who had not known about licensing applying to a property he bought about three years ago (you might reasonably ask, as we have, how did the absence of a license pass by his solicitor on purchasing?). If only this landlord had spoken to Northwood Leicester we would have been able to protect him.

Let’s look at it more positively: what do I need to do now?

Your first port of call to deal with Selective Licensing in Leicester is to apply and you do this through the dedicated web pages in the site:

The process is, I suppose, pretty straightforward if you have everything to hand in terms of documents. Nevertheless, I set aside several hours of my time for two properties of my own that are in the affected areas, and logically my background equips me to be right on top of the paperwork. If you look at your own documentation, are you confident you can deal with this properly and speedily?

So here’s the first recommendation I’d make: get some formal, professional, extremely knowledgeable assistance from Gosia and Eliot in the Northwood Leicester team on how to deal with Selective Licensing in Leicester. They will actually do everything for you for a very reasonable fee…and potentially save you thousands in fines.

If we can help, simply complete this ENQUIRY FORM

What if this cost is coming on top of interest rate and tax rises, and is just too much?

To conclude that this is pretty much the final straw is an understandable reaction. Tax rises that have come about as a result of George Osborne’s Section 24 (Finance Act 2016) clause will now be hitting income hard, because the interest rate rises since early 2022 are now making many letting properties perilously close to non-viable as investments. To have to pay £1090 on top, per property, may just tip some landlords over the edge into selling.

While we would always counsel careful consideration of the many residual benefits of buy-to-let investment (talk to me any time about ways to mitigate these losses and still come out ahead in the investment jungle), sale might be a good option.

If so, Leicester’s best letting agent is also an expert at selling properties for landlords…we do it many times per annum and of course we have investors interested in taking on proven letting prospects. Our aim is always to keep a letting property occupied until the last possible moment, so there will be no pressure from Northwood Leicester to deliver vacant possession before you can start marketing, unlike what you will hear from so many traditional estate agencies.

Again, talk to Gosia Prazeniak, Director Northwood Leicester, about how to sell and to avoid Selective Licensing in Leicester, if that’s what emerges from a serious discussion about your options.

Gosia Prazeniak - director of Northwood Leicester
Gosia Prazeniak