In 2006, selective licensing was introduced, giving councils the power to force landlords to clean up their acts. These licenses allow the local authorities to check if the landlord’s properties are up to scratch and if they are managing the let properly. In an area where there is a selective licensing scheme in place, landlords must apply for a license if they want to rent out a property.
When they were launched, selective licensing schemes were only supposed to be introduced if the area had anti-social behaviour problems or low housing standards, but with such subjective criteria, they are popping up all over the place.
There are now 56 different selective licensing schemes in the UK with a further 26 to be added in 2018. This means there will soon be more than 80, plus RentSmart Wales – and each one is different
While in theory introducing these schemes should drive up standards, in practice, we still have a huge variation across the country and a minefield of regulation that most landlords are utterly perplexed by.
For landlords with one or two properties, it can be hard enough as many don’t realise their area even has a scheme, but for those with rentals all over the country, it can be very challenging.
Not only does each postcode area have a different set of rules to adhere to, but the schemes themselves are often so badly advertised that landlords are finding out 2nd or 3rd hand, or not at all.
But, if landlords don’t have the correct selective licensing, and where applicable, HMO licensing and additional licensing in place, the penalties can be very high – as much as £30,000 per offence – plus they could also be banned from renting out a property in that area.
Given that the penalties are so harsh, it is imperative that landlords find out if they are in an area that has a selective licensing scheme in place. But that is not easy.
For landlords in London, there is the London Property Licensing website http://www.londonpropertylicensing.co.uk/ but for those with properties outside of the capital, there is no one-stop-shop to go to.
One way landlords can ensure they are doing everything by the book is by instructing a professional and qualified agent. Not only will they be aware of the different schemes across the UK, but they should also know if and when any new schemes are introduced. They can then inform their landlords of any that affect them and help them put the correct licensing in place.
However, the question has to be asked – what has selective licensing actually achieved?
For a sector whose standards are already suffering from lack of regulation, having all these separate licensing schemes in place is only exasperating the problem. If legislation which gives tenants the right to sue their landlord if they are living in substandard conditions is passed, this will add a further layer of bureaucracy to supposedly tackle the same issue.
It has created a great deal of extra red tape and extra income for local councils and it feels to me like they are simply setting landlords and agents up for all fall, rather than trying to help them raise standards.
If we really want to improve standards in the private rental sector, selective licensing needs to be scrapped. In its place, we need a template that forces all local authorities to work to a standard model, because as it stands, I am struggling to see any positive impact the introduction of selective licensing has had on the industry.
Paul Sloan is operations director at Spicerhaart Lettings.