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Government selective licensing review backs landlord register

Tuesday 25 June 2019

The UK Government has released its review of selective licensing which, along with other recommendations, backs the need for a national register of landlords.

The review and its recommendations

The review supports the recommendation that selective licensing should be implemented and states that the research undertaken indicates that the effectiveness of selective licensing could be improved through the implementation of 13 further recommendations which includes:

  • To consider amending the mandatory licence conditions with which a landlord must comply to include a standard requirement on property condition that covers the absence of serious hazards.
  • Consider issuing best practice/guidance as appropriate to support local authorities and improve the implementation of schemes.
  • Explore options for a “light touch” process for authorities seeking to re-designate an area at the end of a period of licensing.
  • Consider introducing a national registration scheme for landlords to support and complement selective licensing
  • Consider allowing local authorities to streamline the licence application process for landlords by allowing local authorities to include on the application form only those questions that they consider relevant to their specific scheme.

A full list of recommendations can be found on pages 11 to 13 of the Independent Review of the Use and Effectiveness of Selective Licensing document.

This proposal would represent a U-turn since a parliamentary question was answered by now Housing Minister Heather Wheeler in February 2018, where she said:

“The Government does not support a mandatory register of private landlords. The majority of landlords provide decent and well managed accommodation and requiring those landlords to sign up to a national register would introduce an unnecessary and costly additional layer of bureaucracy.”

David Cox, Chief Executive of ARLA Propertymark commented: “It’s disappointing that the long-awaited review on Selective Licensing recommends the continuation of the schemes. Licensing schemes do not work, and never will do. They are not an effective way of promoting higher quality accommodation and introducing landlord registration will not be the silver bullet to improve the effectiveness of property licensing. Local authorities need investment to enforce the wide range of legislation that already exists.

For years we have called for an alternative to licensing. The Government should instead take this as an opportunity to introduce a Property MOT, which would cover all elements of property condition, energy efficiency and other legal requirements.”

ARLA Propertymark’s views and concerns

David Cox, Chief Executive of ARLA Propertymark gave evidence to the Housing Committee at a review of selective licensing in January 2018 where he said: Licensing does not work. Licensing has never worked and never will work. Newham have done 1,200 prosecutions, or 240 a year, out of 47,000 properties. That is 0.5% of properties in their area that they have done anything about and have done prosecutions. I would note that that is with 140 officers. They have 40 police officers; 100 enforcement officers and they have done 240 prosecutions a year. That is less than two prosecutions an officer.

If that is what is classed as success—and it is classed across the industry as the most successful licensing scheme in the country—really what does that say? It is pitiful.”

What we need is education. Landlords need to be trained in what they need to do. Agents need to be trained in what they need to do. Filling in a piece of paper and giving it to the council and paying £500 is not going to teach them the 150 laws that they need to understand.”

Key concerns

1) Lack of resources

Many licensing schemes fail due to the lack of adequate resources needed to undertake the necessary enforcement activity. Due to the EU Services Directive, the fee to apply for a property licence cannot exceed the cost to process the application, this means that the cost of enforcing the schemes must come from elsewhere. Councils operating licensing schemes have often indicated that the schemes cost more to operate than the funding they receive from licence fees.

2) Administrative exercise

Licensing schemes heavily focus on the administration involved, often directing staff away from enforcement to process applications.

Councils have indicated that processing a single application can take between 15 minutes and one hour. This can be incredibly time consuming and costly when thousands of properties require licensing.

3) Penalising compliant landlords and agents

Often, the rogue landlords and agents that the schemes are created to target continue to operate under the radar.

Already compliant landlords and agents pay their licensing fees, funding the administration of the scheme while more than often those providing poor housing ignore their legal requirements.

4) A low number of prosecutions

The Housing and Planning Act 2016 allows civil penalty fines levied for offences in the private rented sector to be retained by the Local Authority for further enforcement. Research conducted by the Housing, Communities and Local Government Committee in April 2018 highlighted that Local Authorities overall rarely issue landlords and agents with penalties. Existing licensing schemes have demonstrated that only a small number of prosecutions ever occur, with 50% of all prosecutions in 2016-17 coming from Newham Borough Council out of 33 boroughs with licensing across all of England.

Propertymark resources

ARLA Propertymark members have access to our Licensing Fact Sheets which cover:

  • Mandatory Licensing
  • Additional Licensing
  • Selective Licensing

Login to the members area on the ARLA Propertymark website below to access them.

Members area

For more information on licensing and the processes for the variations then visit the Landlord Licensing page on the ARLA Propertymark website.

ARLA Propertymark also offers various training courses to keep agents up-to-date and armed with the right knowledge in order to understand legislative changes better and use best practice, these include:

  • Understanding HMOs and the Current Licensing System
  • Understanding the Complexities of HMO Management, Licensing and HHSRS

Book a course