A scheme which some regard as the most controversial landlord licensing regime in the country is coming under scrutiny.
Labour councillors on the Labour-controlled Nottingham council are querying the new scheme expected to come into force in 2023 which, it is alleged, would cost a cool £22.4m to administer and involve approaching 100 staff.
Under a previous licensing scheme, covering 32,000 private rental units in the city, some 446 properties were improved according to a council report. A new scheme, now being considered by the council, is likely to include more or all of the 45,700 or so private properties now throughout the city.
It’s anticipated the new licensing scheme would be £820 per property for five years, or £630 for accredited landlords.
Local media reports say the council also wants a higher fee of $1,100 for what it calls “less compliant landlords” as well as significantly higher block licences for certain blocks of flats.
But a report recently considered by the ruling Labour councillors show it will need roughly £22.4m to cover overheads for the scheme - including an amazing 94 staff members. No profit would be made.
One councillor - Jane Lakey - told a meeting: “It’s a very, very crude indicator but if 950-odd properties have been improved and then you are going to double the visits to properties in the next 10 months, and let’s be generous and say the number of properties doubles, that is around 1,800 properties improved, which is nice, in terms of averaging the cost out if you take that measure it would cost about £12,000 a property?”
Another Labour councillor said: “Going back to the point about landlords not being able to use the licensing scheme as a justification for increasing their rent, while I agree with that, I don’t think that will necessarily happen. Given that we are living at a time when there is significant inflationary pressures anyway, I would like to know what has been done in regards to the current scheme or could be done in the future scheme to try to monitor and evaluate any impact from Selective Licensing in terms of costs and levels of rent.”
A council leader told backbench councillors: “The issues on pressures of rent are not to do with Selective Licensing, they are fundamental increases that are happening for a number of reasons, including the cost of property, it is a supply and demand issue, there aren’t enough houses, there aren’t enough properties, that is the reality of the situation. There is no indication of it having a substantive or even a minimal impact.”
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When Glasgow Council introduced its HMO licensing scheme around 2004 for any property with more than 2 unrelated adults sharing, rents increased by around 30%.
Properties previously housing 4 flat sharers, sharing 2 bedrooms, could no longer do so without expenditure of several thousands in fire doors, mains integrated smoke alarms etc. not to mention an application fee of around £2000 and subsequent fees of just under £1000 every 3 years. The inspections took around 30 minutes for a Fire Service Officer and a Council employee to dream up further "improvements" almost every time, despite the properties being deemed safe 3 years earlier and no changes in regulations.
I've attended a few of the licensing courts which are mandatory to deal with any spurious objections and I could tell straight away the tiny percentage of potential rogue landlords, but the "bench" seemed oblivious to what was staring them in the face if it wouldn't be recorded in the court records.
In summary, these schemes are a total waste of time and money!
Nottingham became the city with the fastest growing rent after the first round of SL as LLs put up their rents. Very little has been achieved by the first scheme but NCC is completely broke and one step away from having a Govt Commissioner foisted on them. The only way they can keep their head above water (and their jobs secure) is to find alternative funding sources, hence another round of SL.
Despite being told by LLs that SL will force rents up, NCC continues to state that LLs will absorb the rent - the equivalent of putting their fingers in their ears whilst singing loudly! My tenants gained absolutely nothing from the first round of SL other than a rent rise, yet NCC will throw them under a bus again to prop up their financially unsupportable position.
This hits the lower end of the market particularly hard as the licence costs the same for a 1 bed flat or a 10 bed mansion. The additional £25 or so LLs will put on the rent will be extremely difficult for people struggling with the cost of l living.
I'm fed up with saying it and your fed up of hearing it,' the end user ALWAYS pays', simple as that
What ever they say… I would not take the hit, the tenants would.
£22.4M for 100 staff. Given they already have offices that is £224 000/year incom.
I am in the wrong job
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