Residential Landlords Association Central Housing Group

RLA: Licensing ‘fails’ tenants and good landlords

The cost of landlord licensing schemes in Britain are a “postcode lottery”, according to Direct Line research.

The Residential Landlords Association (RLA) have today (20th March) responded to research published by Direct Line revealing that the costliest landlord licensing schemes are 21 times more expensive than the cheapest.

The researched report analyses licensing charges between local authorities, showing a large variance, with the cost of a new licence ranging from just £55 to £1,150, 21 times more expensive.

In Liverpool, the cost of a licence for a first property is £412, whereas in Salford it is over 51 per cent higher at £625.

The report further highlights that the average landlord licence across the UK costs £591.

While in Scotland and Wales landlord licence schemes are mandatory, in England, one in six (16%) local authorities are said to have a scheme in place.

It also estimated that 460,000 rental properties in England are now covered by a landlord licensing scheme.

According to the report, licencing schemes allow councils to establish if landlords are a ‘fit and proper’ person to be a landlord and can include regulations concerning the management, upkeep and safety measures of a property.

The research also identified an increase in the costs charged by local authorities for landlord licences over the last few years; for its additional licensing scheme, the cost of a licence in the London Borough of Newham increased by 150% in just three years, from £500 in 2014/15 to £1,250 in 2017/18.

Local authorities are reported to be raising ‘huge’ sums from additional landlord licensing schemes, with Liverpool City Council receiving over £4m in a year covering over 42,000 properties.

On average, it is said that each council with a scheme in place raised £144,629 from landlord licensing schemes in 2017.

It is reported that local authorities across the UK recorded an average 5,069 licensing offences in 2017, an increase of 46% since 2016 (3,476 offences).

Landlords can commit an offence by not having a licence in place or breaching the terms of the licence, such as allowing more people to occupy a property than permitted.

Back in November, the RLA released a report highlighting that two-third of councils in England and Wales brought no prosecutions against private landlords in 2017/18.

Nearly a fifth of councils didn’t even issue any Improvement Notices which order a landlord to carry out certain repairs or improvements to a property.

Analysis of the results from 290 local authorities replying to Freedom of Information requests from the RLA’s research lab, PEARL, showed that there was no clear link between a council operating a licensing scheme for landlords and levels of enforcement.

The RLA also called for a renewed focus on enforcing the powers already available to councils, including sustainable funding for enforcement departments, using council tax returns to help identify landlords and councils doing more to find and act against criminal landlords.

On the release of Direct Line reports, David Smith, Policy Director for the Residential Landlords Association said: “Whatever the cost of licensing, it fails to provide any assurance about the quality of accommodation.

“The RLA’s own analysis shows that there is no clear link between a council having a licensing scheme in place and levels of enforcement against criminal landlords.

He added: “The fundamental problem with all schemes is that it is only the good landlords who come forward to be licensed.

“They completely fail to identify the crooks.

“They just mean landlords, and therefore tenants, having to pay more.

“Instead, councils need to be more creative in how they identify landlords by better using the powers they have to collect data using council tax returns and accessing information from deposit schemes.”

Matt Boatwright, Head of Direct Line for Business, said: “Our analysis shows landlord licensing is truly a postcode lottery, with a phenomenal range of costs for those that do have to sign up for a scheme. Anyone planning on becoming a landlord, or who already has a property portfolio, should contact their local authority to see if they have a scheme in place.

“It is vital that landlords comply with all appropriate legislation and take steps to protect themselves and their investment, including appropriate landlord insurance. As such, we offer our landlord customers’ unlimited access to a legal helpline to help them remain compliant with the law.”

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