Doubt cast on selective licensing’s impact on housing standards

The effectiveness of selective licensing in improving housing standards is brought into question by a new report.

The findings by PRS compliance company Yuno compare costly licensing schemes against the geographical disparity in properties meeting the decent homes standard.

According to Yuno, some councils are charging more for selective or additional HMO licences than mandatory HMO licences.

These schemes are far from evenly distributed

According to the statistics, only 21% of the 4.6 million homes in England’s private rented sector fail to meet the decent homes standard.

In Wales, there are approximately 229,000 homes in the private rented sector, with only 22% categorised as falling under a category one hazard.

Paul Conway, chief executive officer and founder of Yuno says selective licensing schemes are not evenly distributed across the UK.

He said: “Our findings reveal that 25% of local authorities in England, and 36% of local authorities in Wales, are enforcing Additional HMO and/or Selective Licensing schemes.

“These schemes are far from evenly distributed across regions, prompting the question as to why some regions have a significantly higher proportion of councils enforcing them.

“Our data analysis shows a lack of such schemes in regions with a relatively higher proportion of non-decent homes, and a higher proportion of such schemes in regions with some of the lowest proportions of non-decent homes.”

Role of licensing in causing housing standards to improve

The data reveals while only 15% of London’s private rented sector (PRS) homes are classified as non-decent standard, more than 38% of London boroughs have implemented selective licensing, with 67% requiring additional licenses such as HMO licenses.

However, in Yorkshire and the Humber, where the proportion of non-decent standard PRS homes is at its highest (40%), there are fewer selective licensing schemes compared to London.

Mr Conway adds: “This begs the question as to the role of licensing in causing housing standards to improve. For example, is the relatively high housing standards in London due to a higher proportion of discretionary licensing schemes or because it has a substantial premium homes market?”

Some councils charging £200 more for identical licences

Mr Conway adds some London councils are charging more for Selective or Additional HMO Licenses than others do even for Mandatory HMO Licenses.

The most expensive London boroughs with selective licensing are Barking, Dagenham, and Havering, Southwark, which costs £900.

An additional licence for an HMO costing a whopping £1,698 in Redbridge and the cheapest in Hammersmith and Fulham still costing £560.

Mr Conway said: “Further scrutiny reveals discrepancies in licensing fees among London councils, with some councils charging up to 200% more for identical licenses.”

“This is evidenced by a distinct lack of correlation between median rental prices and the licensing fees charged by London councils.

“This lack of uniformity poses questions as to cost-effectiveness and justifications for wide-ranging fees.”

Yuno is working with industry expert Kate Faulkner  to investigate the effectiveness of the controversial schemes and will be holding a roundtable to determine the effectiveness of the expensive schemes in raising housing standards.

To join the debate, sign up here. ‍

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