Dec

Selective licensing schemes most popular with Labour councils and ‘lose money’

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Councils around the UK are prepared to lose money running ‘polticial’ licensing schemes in their bid to get tough on landlords, new research shows.

Labour councils are also much more likely to push for registration and enforcement, says geospatial technology firm Kamma, which found that motivations were strongly political.

Out of the 58 active selective licensing schemes in England, 39 are in areas controlled by Labour councils compared to just seven run by Conservatives.

CEO Orla Shields says 2021 was another busy year for those regulating the property market with more legislation and more enforcement than ever before.

“While some see discretionary licensing schemes as just another way for authorities to tax landlords, our feedback from councils is that it actually costs them more to run these schemes than they recoup,” she tells LandlordZONE.

“Setting up a scheme then, is born out of strong motivation to raise standards and comes at some cost to limited council budgets.”

There were 47 new schemes and consultations in 2021, with 12 actually launching this year, and five more scheduled to launch in 2022.

But a few schemes have begun to falter, some impacted by Covid or funding cuts; Southend recently deferred its scheme until next year, while others in Wakefield, Luton, Croydon and Hastings have all stalled or been rejected. Scarborough expressed fears that ministers had gone cold on selective licensing after a year-long wait to get approval for its new plans.

“Whilst some schemes were rejected by the previous Minister for Housing Robert Jenrick we don’t yet know how Michael Gove’s Department for Levelling Up, Housing & Communities will act,” says Shields. “It is a more radical brief, so 2022 looks set to be yet another year of change for property regulation.”

Kamma reports that although there are no major geographic trends, London is particularly active. Lambeth, Westminster and Newham all kicked off new schemes or consultations this year while Southwark and Lewisham both have schemes scheduled for 2022.

Read more about selective licensing costs.

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