Rental Sector Licensing Schemes Central Housing Group

Selective licensing overhaul needed quickly, government told

The government is being urged to speed up the release details of the future it sees for selective licensing following revelations about current high rates of non-compliance.

The call comes from Neil Cobbold, the chief operating officer of PayProp UK, an automated transaction and reconciliation platform.

Cobbold says recent research from safeagent, conducted by London Property Licensing, reveals over 130,000 unlicensed rental properties in the capital alone that should be licensed under either a selective, additional or mandatory House in Multiple Occupation scheme – but are not.

The non-compliance rate for HMO and additional licensing schemes is presently 75 per cent while 15 per cent of unlicensed properties should come under a selective licensing scheme.

Exacerbating the problem is safe agent’s estimate that 40 per cent of boroughs still rely on paper applications which create a backlog.

“There is a clear problem in London, which has the UK’s most complex licensing system. That being said, non-compliance with licensing schemes will be a problem for local authorities across many parts of the country” he says.

“To have so many unlicensed properties in the capital suggests the existing framework is not effective. With many paper applications outstanding, one simple way of improving efficiency would be for more councils to adopt online application processes to speed things up and reduce the backlog” according to Cobbold, a long-standing advocate of more PropTech across the industry.

Earlier this year, the government commissioned an independent review of selective licensing schemes with the results published in June.

The findings put forward a number of recommendations, including an easier renewal process for existing licensing schemes, the introduction of a landlords register, changes to the way licensing proposals are consulted upon and streamlining the application process.

It was reported at the time that the government ‘broadly welcomed’ the suggestions, but it is yet to produce an official response on the review.

“The government said that it would ‘work with the sector to continue to understand concerns before responding fully’. This research shows a snapshot of the issues in the capital and should reinforce that a response and set of actions is needed sooner rather than later” Cobbold explains.

“Although many of the problems raised in safeagent’s investigation focus on HMO and additional licensing, any changes to the selective system pursued by the government could have an impact on the way the whole licensing process works in the future.”

Cobbold says the lack of enforcement of legislation remains one of the biggest challenges facing the lettings sector.

With many landlords failing to licence their properties, letting agencies can provide an invaluable service in guiding them through the process, Cobbold says.

“Some landlords will be deliberately avoiding their licensing obligations, but the majority will be non-compliant because they are not aware of exactly what is required of them.Professional letting agents can prove their worth to landlords by helping them to remain compliant while also contributing towards raising rental property standards” he concludes.

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