Oct

Selective Licensing – are there any benefits for landlords?

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Landlord Licensing:

Some local authorities are introducing landlord licencing in selected areas while others are doing this across the board, across the whole borough, town or city.

Mention licensing in most landlords’ company and it either strikes the fear of God in them, or else a simmering sense of resentment that their local authority is simply taking hard earned money away from them, using these schemes as an excuse to raise money for their cash strapped council.

Well, in a sense these schemes do generate a considerable amount of cash for councils’ coffers, but this money should by law be ring fenced and only used for the purpose intended: to raise standards in the private rented sector (PRS) concerned, to tackle anti-social behaviour, and to run an effective scheme. Landlords should be prepared to hold councils to account for this.

The average cost to landlords is around £600 per five years per single-let rental, or £120 per property per year. HMOs will be higher depending upon the number of occupants but average around £1000 per HMO property for the five years.

However, if the scheme is run properly by the local authority, the benefits to landlords can outweigh these costs. Responsible landlords should welcome any scheme which tackles the rogues, those landlords operating below the radar, flouting the law, and getting away with not paying their fair share of taxes.

A good well run scheme will enforce minimum standards across the board, through regular property audit and compliance inspections, and having landlords comply with certain documentation.

Licensable properties are inspected to ensure that the licence conditions are met:

health, safety and welfare of the community are protected
landlords maintain their property and correct any deficiencies that may exist
reduce anti-social behaviour
prevent neighbourhood blight and conditions that can result from lack of care
ensure that minimum housing standards are met
educate landlords and tenants of acceptable private rented standards

The result is the maintenance of proper rental standards over time and a general improvement where conditions in the locality are currently below standard, thus maintaining or enhancing the rental and sale value of landlords’ properties.

The scheme may mean that landlords are required to be more diligent in the way they manage their rentals, where local government regulations have to be adhered to, but ultimately, this will not only lead to a better Private Rented Sector; it enhances the reputation of private landlords both locally and nationally.

All sounds good in theory, but how it works in practice depends on the effort and resources a local authority is prepared to apply, and how well private landlords comply. Any such scheme works best when landlords and local authorities are prepared to work together to improve a community for the benefit of everyone in the area.

Local authorities might typically require landlords to provide, in addition to inspection audits from time to time, the following:

Details of any properties that the proposed licence holder holds licences for both inside and outside the area.
For properties with multiple households, the size and number of habitable rooms
Tenancy or licence agreements, on request
Tenant references or evidence of these, on request
A basic fire risk assessment for the property
A valid Gas Safe Certificate – when applicable
An Electrical Safety Certificate from an accredited body – e.g. NICEIC Certification
Energy Performance Certificate (EPC)

This is all information which a landlord should be producing in any case to comply with the latest AST regulations, with the addition of the current version of the government’s “How to Rent Guide”, supplied to tenants.

For documents see: https://www.landlordzone.co.uk/documents

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