Licensing is one of the letting industry’s most contentious issues, and more and more councils are looking to introduce licensing schemes
Does it work, or is it just a council run cash cow?
Landlord licensing is not popular, with many believing it is an easy way for councils to up their revenue from landlords. However, with many licensing schemes now well underway, there is evidence that they do have a positive impact.
Newham Council, the first in the UK to introduce landlord licensing back in 2013 has just announced that the scheme will be running for a further five years. The council believe the scheme has been hugely successful in helping drive up standards the private rental market, and in fact the council is now responsible for 70% of all of the housing crime-based prosecutions in London. Over 2000 notices have been served to improved housing conditions and management, and 28 of the boroughs worst landlords have been forced to hand over their properties to reputable managing agents.
A bigger version of the Newham scheme is Wales-wide ‘Rent Smart Wales’ scheme, which was introduced back in 2015.
The scheme, which requires all landlords and agents who let and manage properties to gain a licence. In order to get your licence, a landlord must first undergo training to prove that they understand the rights and responsibilities that they have to adhere to before they rent a property to a paying tenant.
By ensuring landlords, and agents, have this general know-how, Welsh tenants are able to proceed with their tenancy safe in the knowledge that their landlord is fully aware of what they should be doing. Tenants are also able to access the register and make sure that their landlord is registered with the scheme.
If any landlord is operating within Wales without being part of the Rent Smart Wales scheme, or are failing to comply with regulations, they can be reported to the central licensing authority in Cardiff and enforcement actions - including hefty fines.
Do I need a licence?
It entirely depends where your property is located.
Certain areas in the UK do require landlords to hold a licence, and the extent of this differs depending on the Council’s licensing requirement.
- Barking and Dagenham
- Hammersmith and Fulham
- Stoke on Trent
- Waltham Forest
- West Lindsey
This list is by no means exhaustive though. There are plenty of councils who have explored, or are exploring landlord licensing – so don’t be surprised if you see a new requirement in the future:
- Burton upon Thames
- East Staffordshire
- Telford and Wrekin
Before you start to panic and budgeting for your licence, the deal isn’t done until it’s rubber stamped. Earlier this year, a proposed landlord licensing scheme for Wisbech in Cambridgeshire was scrapped, after local councillors could not agree how to move the scheme forward.
Plans for the selective scheme, which would have impacted around 2,400 rental properties and required landlords to purchase five-year licenses for £575 and pass a ‘fit and proper persons’ test’, were shelved by Fenland Council cabinet.
This follows a consultation in 2016 of over 400 people, which showed that 85% were against a selective licensing scheme being introduced.
So, what do I need to do if I need a licence?
If you think that you might need a licence, you should take steps to get one organised, or you are putting yourself at risk of some hefty penalties.
These penalties are not unheard of – and neither are they easy to swallow. When Robert Ivor Grovell became the first landlord to be prosecuted for failing to become licensed with the Rent Smart Wales scheme back in June, he was slammed with a £5,400 fine. London-based Elson Tuitt has on the receiving end of a £12,000 fee after he failed to gain property licenses for three properties in Waltham Forest back in November 2016.
With this in mind, making sure your licence is in place seems like a much better option! Licenses typically range from £500 to £1000 for five years, and most are per property, rather than a cost per landlord. However, some areas are offering discounts if you have multiple properties.
To qualify for a licence, you may need to provide your council with the following information:
- A valid, in-date gas safety certificate
- The full address of the property to be licensed
- Full contact details (including name, address, phone number, email and date of birth) of applicant
- Full contact details of licence holder
- Full contact details of property owner
- Full contact details of property manager
- Full contact details of mortgage account holder
- Full contact details of any other interested parties
- Details and dates of any legal actions or conviction against the licence holder and their associates
- Details of the facilities within the property (number of rooms/bathrooms etc)
- Details of the number of people living in the property
- Date the property was built
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