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Written by rosalind renshaw

The decision by the London Borough of Newham to press ahead with blanket licensing for every single private landlord has come under fire, amid concerns that councils across the UK could follow suit.

From January 1, Newham will be licensing some 35,000 rental households, using selective licensing powers. Landlords who are not licensed where they are required to be will not be able to use S21 notices, and could face fines of up to £20,000. Their properties could also be taken over by the council for management.

David Salusbury, chairman of the National Landlords Association, said: “It is deeply disappointing that the London Borough of Newham has taken the decision to license all landlords in its area.
 
“The NLA realises that there are significant issues present in Newham, which the council is right to want to address.

“But selective licensing of landlords is designed to address distinct problems relating to housing management by targeting specific areas. Newham’s blanket approach goes beyond the intention of the legislation and has not gained the support of local landlords. 
 
“Newham Council has provided no solid evidence to support their argument that such drastic proposals will have the impact it expects.

“Indeed, they will only increase the burdens on those who already comply with the law, without having any bearing on those who blatantly ignore it. The NLA offered an alternative strategy which would have enabled the council to focus their resources squarely on the rogue operators.
 
“This decision has wider implications for the supply side of the private rented-sector. The NLA will be consulting with other stakeholders to assess the potential impact and how best to respond as an industry.”

Comments

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    Landlord will hit agents harder now, saying they have to pay £150 extra.

    Could also mean tenants admin fees going up as well.

    Or rents going up, then the council would have to up their limit...

    Problem for Newham is so many landlord and who are here and not here etc, they won't be going many fees thru the door, they will have to chase them...

    • 06 July 2012 10:33 AM
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    35000 x £150 = £5,250,000! nice little earner for the council. Will the council now please show us that they are spending this on cleaning up the bad landlords-let's see the evidence.
    When I take on new tenants they will have to pay the "Newham Tax" in advance; more costs for those who find housing costs high!!

    • 02 July 2012 15:03 PM
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    Nothing but another way of picking the pockets of those that work hard and take risk in investment.

    The tenants,those who these overpaid pen pushers are meant to be helping foot the bill in the end.

    I think some landlords should keep a better maintained estate but this is not the way you deal with it.

    I was interested to read in another article on this site this council is also looking to become a landlord,so why not wipe out your competition with red tape first.

    • 29 June 2012 13:35 PM
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    I'm not surprised at this move, I'm in the process of refurbishing a flat on the Isle of Thanet for the rental market for a client and as I understand it a licence will be required to let the property once it is finished.

    The Licence application is 23 pages long, and my guess would be that after all the various upgrades to the accommodation & certificates are paid for (EPC, Gas, Electric etc etc) that there will be very little left in terms of rental profit when the rent is only £375 a month. Nett result, rent increases in an area where few people can afford it.

    If the government wants better regulated social housing at an affordable price, there is only one way to achieve that goal, there needs to be a huge increase in housing provided by the government.

    Most landlords I would think have given up any hope of capital appreciation on their portfolios for the foreseeable future (Outside of the top end of the market), the rental returns will be further hit by more regulation, at a time when rents are effectively being capped by the government.

    I have said this before on this site and will say it again, the current housing market cannot survive as it is. Using "Market Forces" to regulate and provide social housing as it is is totally unsustainable.

    A lot small private landlords like myself are using property rental to support their failing personal pension plans, but are beginning to find that that avenue of retirement income is every bit as fraught as their personal pension schemes, ever increasing amounts being spent for steadily diminishing returns.

    I here of landlords with a £5 million pound portfolios, but when you check it out their portfolio is highly mortgaged and are entirely reliant on mortgage rates remaining unchanged, the minute mortgage rates start to go up as they inevitably will, they will be forced to do one of 2 things, either raise rents significantly or sell into a market likely to be flooded with properties from others using the same exit strategy.

    It seems to me that we are sleepwalking into a disaster here and "The Market" will not sort this out just as "The Market" did not sort out the banks, NHS or education.

    • 29 June 2012 12:50 PM
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    Why invest in Newham, this measure will surely put off landlords. This is a draconian measure, and reeks of the disgraceful view, that all private landlords must be greedy capitalist speculators. I and my wife invested as we were in the Forces and had no other way of owning a house than to rent it out, when posted abroad. We wanted to ensure we were not sponging off the state in our retirement years, yet Prescott, Brown and Blair have enacted so many measures that it is now a full time job to provide this extension of state housing provision. I'm selling - just as soon as I can get some return on the massive capital losses we are sitting on right now. Hopefully I will live long enough...This measure smacks of unaccountable, possibly jealous, apparatchicks, once more propping up their over- generous pension pots at our expense.

    • 29 June 2012 12:21 PM
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    This smacks of collective punishment. Hitler did that too.

    This will come a cropper eventually as the market has its own way of reacting to such draconian measures. Trouble is everybody suffers in the mean time as supply goes down and rent goes up. Meanwhile, the little tin gods in the Council get paid their wages and then pensioned off handsomely.

    • 29 June 2012 10:01 AM
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