9:58 AM, 13th September 2023, About A year ago 25
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Up and down the country landlords are caught in the trap of having to pay for a selective licence.
These licenses aren’t cheap and for the money landlords spend, councils don’t appear to be inspecting properties.
In a series of special reports, Property118 looks at the issues surrounding selective licences starting with the expansion of schemes and the guidance from the government.
The Department for Levelling Up, Housing and Communities (DLHUC) recently issued guidance around selective licensing. The guidance says: “Only where there is no practical and beneficial alternative to a designation should a selective licensing scheme be made.”
The guidance recommends implementing other methods to combat issues such as anti-social behaviour instead of selective licensing.
The guidance suggests to local authorities that areas suffering from poor housing conditions could have a programme of renewal to improve rented properties.
In areas with anti-social behaviour, the government proposes an education programme that could take place or a voluntary accreditation scheme for landlords.
The guidance says these methods could help to achieve the same objective as a selective licensing scheme.
When approached by Property118 for comment the Department of Levelling Up confirmed that selective licensing should not be used as a standalone tool.
A spokesperson said: “Selective licensing enables a local authority to address specific problems arising in particular areas. It is not a stand-alone tool and should only be used in conjunction with existing initiatives.”
It’s clear that selective licensing should only be a last resort, so why are councils implementing these schemes and shouldn’t they have at least tried the methods suggested by the government?
Across the country, selective licensing schemes are being approved and expanded. Manchester has recently approved another licensing scheme which will require 700 more private rented sector homes to have a licence.
Fees for the licence cost around £800 and the council says it does not generate surplus funds from selective licensing schemes.
On their website, the council says income generated from licensing fees is used to pay for the consultation process, administration, management and running of the scheme.
While this may be true, the amount of money landlords pay, you would expect councils to at the very least inspect properties.
In Nottingham, the first scheme of selective licensing ended on the 31st July 2023 and a new second licensing scheme has just been approved which will come into effect in December.
Mick Roberts, one of Nottingham’s largest landlords helping benefit tenants told Property118 he has had zero inspections inside his properties.
He says: “I have had zero inspections. Around four years eight months into the five-year scheme, they externally inspected a fence.”
Mr Roberts says it was only at the end of the five-year scheme that the council asked to inspect his properties.
He adds: “One month before the end of the scheme, they asked to inspect two of my properties. I’m sure this was just to get inspection numbers up.”
The current cost for a licence in Nottingham is £520 for the first payment (Part A) and the second payment (Part B) is £370. That’s £890 per house. Have more than one rental property and landlords are looking at a hefty outlay.
Some landlords are having to spend thousands of pounds and might never have their properties inspected in the five years that licenses run – so how do councils justify this?
When approached for comment, Liverpool City Council told Property118 that under its Selective Licensing scheme, which started in April 2022, 3,673 property inspections have been conducted.
This is made up of programmed inspections, reactive inspections, anti-social behaviour complaints and revisits.
A spokesperson from Liverpool City Council said: “Findings indicate 63% of properties that have received a programmed inspection have not been compliant with the licence conditions on the inspection and officers have found during inspection, 2,673 breaches of licence conditions and housing faults when visiting the properties.”
The spokesperson added: “The private sector team is working with landlords to ensure that they are abiding by the licence conditions and ensuring that the properties that are rented out are compliant with the conditions and safe for the occupiers to live in.”
Chris Norris, the policy director at the National Association of Residential Landlords, said it’s puzzling why some councils feel the need to establish selective licensing schemes.
He said: “With the government already committed to introducing a Property Portal which will allow local authorities to look up landlords’ details, it’s unclear why some local authorities feel the need to establish selective licensing schemes which act as a tax on good landlords.
“Past NRLA research shows clearly how there is little to no correlation between increased licensing and more effective enforcement of rules.”
He added: “Aside from the risk that regulatory work is duplicated by central and local government, these schemes feel like an unnecessary expense at a time when budgets are constrained.”
When approached for comment Birmingham City Council told us that in line with government guidance, they use other various tools to tackle issues in the area.
A council spokesperson told Property118: “Our specialist Private Tenancy Team provides specialist advice on renting in the private rented sector: they intervene to prevent unlawful eviction and harassment and can pursue criminal prosecutions.
“There is a city-wide HMO Article 4 direction – Any residential house required planning permission to be turned into an HMO, and this approach prevents harmful concentrations of HMOs arising which negatively impact the character, balance, and amenity of local communities.”
The council added: “Under the Housing Act 2004, we can serve formal notices that require improvements to be carried out and if this is not done, the council can carry out works in default.”
Birmingham council is also planning to bring around 10,000 empty properties back into use which they say will help to alleviate the city’s housing crisis.
Liverpool City Council told Property118 that selective licensing is a valuable resource.
A spokesperson said: “Evaluations of Liverpool’s first scheme, introduced to address poor housing and property conditions provided good evidence that selective licencing is a valuable resource for the council’s toolkit.
“During this period, over 34,000 compliance activities were undertaken with 65% of properties non-compliant. 3,375 cases of the most serious hazards (Category 1 and 2) were identified. 2,500 legal notices were issued, 169 formal cautions and 197 written warnings.
“With more than 300 successful landlord offence prosecutions and 87 civil penalties together with a resolution rate of 98% for all reported ASB complaints it is clear how this scheme helped improve housing for our most vulnerable residents in the private rental sector.”
The council says the launch of the second selective licensing scheme will help to target areas with poor housing.
A spokesperson said: “The launch of the second scheme in April 2022 saw a smooth start with systems up and running quickly and officers using learning from the first scheme to ensure teams were operational and mobilised speedily.
“This scheme targets poor housing and the worst property conditions including fire and electrical safety hazards and excess cold and damp.”
The Local Government Association (LGA) told Property118 that they support councils’ selective licensing powers.
A spokesperson said: “The power for councils to introduce selective licensing schemes has been around since 2004 and there are a number of examples across the country. The LGA is supportive of these powers.”
However, the LGA disagrees with the government being able to approve schemes.
It says: “Our main policy ask on selective licensing is that the requirement for Secretary of State approval for larger selective licensing schemes is removed.”
It seems that councils up and down the country are expanding their schemes, but at what cost?
In an already troubling time for landlords, this ‘unnecessary expense’ may do more harm than good for the sector.
Join us in the next series of Property118 selective licencing reports where we discover why council inspectors don’t need permission from the landlord or the tenant to inspect a rented property.
When approached by Property118 Nottingham Council declined to comment.
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Reluctant Landlord
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Sign Up18:06 PM, 19th October 2023, About A year ago
Reply to the comment left by Crouchender at 19/10/2023 - 10:26
The issue in Bham is that the focus should now be on the ones who have not applied for SL now the deadline has passed.
My gut feeling is a lot of LL's dont actually know about SL. If you live out of the area yourself (even out of the city!), have a long term tenant, dont use an Agent and self manage - how would you know exactly?? Given BCC can look through title deeds and reference to CT bills, why not write to the owners directly - even now once the dealine has passed. There is all the info there and ducks sitting in a row!
Either all LL's are 1. Not still aware 2. Are aware and actively not bothering to apply . 3 Are aware, actively not bothering to apply and will just take the hit IF anything happens.
I have asked BCC the exact process when they find a LL who has not applied. They have only said at this point they will make the LL aware of the statutory requirement and encourage them to apply. So in other words even if you get picked up they still have to show that they have given you adequate time to apply and given you X time probabaly.
So what was the point of the actual deadline date then????
Mick Roberts
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Sign Up8:53 AM, 20th October 2023, About A year ago
Reply to the comment left by NCC are Shambolic at 19/10/2023 - 09:58
Great Username u have ha ha.
You have great facts there. And figures. We need you with us. You may be already on my whatsapp list.
I'm going to see house this morning where Nottingham Selective Licensing has said bedroom too small, got to evict family. Yes few doors up, Nottingham Council house same size with 7 kids in.
Mick Roberts
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Sign Up8:55 AM, 20th October 2023, About A year ago
Reply to the comment left by Crouchender at 19/10/2023 - 10:26
Just had Landlord ring me, they had inspection & needed 2 window restrictors & loft hatch was 4mm too small. That will go down as bad house.
Mick Roberts
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Sign Up8:56 AM, 20th October 2023, About A year ago
Reply to the comment left by Reluctant Landlord at 19/10/2023 - 18:06
I know many that has been fined £12,000 RRO for not knowing, but house no faults.
It's impossible to do all my houses in the time frame they ask once I start applying.
I didn't buy all my houses on the same day.
Mick Roberts
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Sign Up8:57 AM, 20th October 2023, About A year ago
I had a bee in me bonnet last 2 days when Nottingham Council Selective Licensing sent us all email & it had to have in it the words Unlimited fine, so I lost the plot & sent several including boss of Nottingham's biggest homeless charity who is a good man:
Kate Faulkner & Ben Beadle secretly copied in.
That's gonna help the homeless isn't it:
any person who operates a licensable house without a licence is liable to a civil penalty or prosecution and upon summary conviction to an unlimited fine
Let's keep punishing & not supporting. That's gonna' make rents cheaper, surely.
Clearly someone in the Council missed this:
https://www.nottinghampost.com/news/nottingham-news/no-much-hope-tackling-homelessness-8829410?utm_source=linkCopy&utm_medium=social&utm_campaign=sharebar
When you got the boss of Nottingham's homelessness support charity telling you:
The number of people sleeping rough on the city’s streets has also risen by more than 40 percent, and more than 10,000 people are waiting for a council house. Andrew Redfern, the chief executive of support charity Framework, says without policy change, housebuilding and more funding from central Government, he cannot see the situation changing.
Mr Redfern says Framework has been noticing a few new groups of rough sleepers, including those who have been evicted from private rented accommodation. This is either due to not being able to afford rent, or being evicted due to landlords selling up because of selective licensing costs.
Then surely you got to start listening?
Andrew Redfern replied copying everyone in, so my reply below:
Andrew,
Firstly congratulations for acquiring the Padstow Road site & let's hope you get the full approval for your 15 units u deservedly need-May just be that some Councillors herein may discuss the plans with the permission granters.
Yes, thanks for replying & showing you will communicate.
I am going to seize on someone important like yourself, that has experience. And I'm going to maybe enlarge the words.
And in 2023, 5 years ago, I'd have, in my opinion, said Nottingham Selective Licensing was responsible for 90% of the Landlords selling & homelessness etc. Now in 2023, again in my opinion, Selective Licensing is responsible for maybe 30% (life is a numbers game) of the homelessness in Nottingham. As there are bigger issues at play now, which you well know. Yet this local 30% can be avoided. Wholly preventable.
Your Rough sleepers are going to be a far less number evicted just from Selective Licensing than maybe the normal families further up the bigger 'normal' family houses chain. But you are still seeing it.
It's not rocket science, Newham was first to introduce Selective Licensing, & consequently they had the worst homeless problem.
You telling me everyone says 'We've nowhere to put people'. I wish to sell a lot mine, but can't as my people can't get anywhere.
And you are right on the quality too. My houses have got worse from Selective Licensing as Licensing now has the funds that could have maybe been spent on a kitchen or bathroom. I used to do six kitchens six bathrooms a year-I now do one. And also because tenants daren't ask for anything any more cause they've seen their mates, family, sister etc., been evicted cause Landlord selling cause of Selective Licensing.
I just get a bee in my bonnet when we get a Selective Licensing email from the Council (& I know the other side of the Council NEED us so badly), saying unlimited fine. It's uncalled for. Every misdemeanour by Landlord now seems to warrant a £30,000 fine, hence, this feeds all the way down to the people you are trying to house, as normal mothers & kids can't even get the normal houses, they taking houses further down the chain, which maybe the single man might have had. This knocks onto Asylum seekers, refugees, your supported tenants etc. All has a knock on effect from top to bottom.
If you aren't aware, Selective Licensing have been sending emails out saying:
Notice of Intended Entry
Just for a normal inspection. It's shocking, tenants & Landlords have been petrified.
You telling me we need joined up strategy. I've housed more homeless Benefit tenants in Nottingham than any other single private provider over 26 years. Not once has the Councillors come to ask what they think they should do. No communication. They getting it wrong, as you know.
I have no experience of your supported housing & I feel for u.
Oh Andrew, don't worry, I don't fully blame the local people, there is some good people within Licensing, I just don't get why no communication from the Councillors. It's mind boggling. I do blame the Govt & Sunak & the 23+ Housing Ministers we've had over 21 years, I do most definitely blame them. However as you know, they are far remote & harder to single out & generally they not bothered as move roles next year & say Oh I don't do that role.
2 copies enclosed of the letters from Sir David Rutley MP, the UC DWP Minister for Welfare Delivery (Parliamentary Under Secretary of State) at the Department for Work and Pensions from September 2021-September 2022 who got everything wrong, so I had to tell him so. So you can see, mine isn't political at the local Nottingham Labour Council. Sir David Rutley has now moved roles. There's no continuation.
Always happy to talk and discuss Andrew, u can ring me and Mon to Fri 8-3. I'm not posh, so excuse my commonness-But I have bags of common sense & am becoming an Einstein compared to some of the decision makers-Although that's not hard is it.