How Licensing affects portfolio landlords

Selective Licensing was introduced in 2006 to give some councils greater powers to address the impact of poor quality private landlords, and anti-social tenants.

The initial aims of the scheme were positive - stamping out bad practice within the private rented sector and raising standards so that tenants can enjoy living in quality homes. Nine years after its introduction, the Welsh Government went one step further and introduced a single licensing scheme across the country.

The rationale behind the UK Government choosing not to roll the scheme out across the whole of the UK was that it would give councils in areas that were particularly badly impacted by anti-social behaviour or suffered from persistently low housing standards the power to take enforcement action.

All schemes require landlords to apply for a licence to be able to let out a property, and this grants local authorities the right to check if the landlord’s properties are up to scratch and if they are managing the let property.  However, in addition to RentSmart Wales, there are now 56 different schemes across the UK with a further 26 to be added in 2018, and the problem is that each of the schemes is different. The result is that there is a huge variation across England, and the minefield of regulation could leave landlords feeling a little perplexed.

This can prove to be a challenge for landlords with properties both in Wales and in England with many not realising their property is in an area with a scheme, and it can be very confusing because each postcode area will have a different set of rules to adhere to.
If landlords don’t have the correct licence 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 their properties are in an area that has a selective licensing scheme in place. But that is not easy.

One way landlords can ensure they are doing everything by the book is by instructing a professional and qualified agent, and Darlow’s can help landlords find a suitable letting agent across the border. 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 current model has created extra red tape without necessarily raising standards. If legislation giving tenants the right to sue their landlord if they are living in substandard conditions is passed this will add a further layer of complexity to tackle the same issue. If we really want to improve standards in the private rental sector, selective licensing could be replaced with a template that forces all local authorities to work to a standard model.