Selective licensing schemes see landlord costs soar – Direct Line

Selective licensing schemes see landlord costs soar – Direct Line

0:05 AM, 7th August 2024, About 5 months ago 7

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Landlords across England are facing an increasingly heavy financial burden as local councils ramp up selective licensing schemes, research reveals.

English councils are charging landlords almost £700 on average to obtain mandatory selective licenses, with costs varying wildly across the country.

According to the study by Direct Line, Leicester city council tops the list with a £1,290 fee, while Ashfield district council charges the least at £350.

Selective licensing schemes have seen a significant increase in councils taking them up.

Important that landlords comply

Sarah Casey, the head of landlord insurance at Direct Line business insurance, said: “It’s important that landlords comply with all appropriate legislation as anyone not doing so could face a hefty fine.

“Our analysis shows significant regional variations in landlord licensing costs and a growing burden from fines for non-compliance.

“Anyone planning on becoming a landlord, or who already has a property portfolio, should check with their local authority to see if they have a scheme in place.”

47 councils now have schemes

Direct Line says that 47 councils now enforce these schemes, up 10% from the schemes running in 2022.

Councils are also generating substantial revenue, with more than £20 million collected in 2023, a staggering 80% rise from the previous year.

It says that Liverpool raised more than £5 million of this total

Landlords failing to comply face severe penalties, including fines of up to £10,000.

Burnley issued the largest fines

The study shows that Burnley borough council has issued the largest fines, while Waltham Forest and Middlesbrough recorded the highest number of licensing offences.

Despite the financial impact, some councils have closed their schemes since 2020 saying that housing conditions had improved under the licensing regime.

The areas include Hartlepool, Sheffield, and Coventry.


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Cider Drinker

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9:22 AM, 7th August 2024, About 5 months ago

The country is virtually bankrupt. Councils are virtually bankrupt.

It should come as no surprise that private tenants are once again being indirectly attacked to make up the shortfall in Council funding.

We may have expected from the Conservatives but is it concerning to see Labour continue with the attacks on the poorest in Society. Pensioners, tenants, who is next in the list? Maybe they will take away disability benefits or free school meals?

Reluctant Landlord

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10:07 AM, 7th August 2024, About 5 months ago

Just add the cost of the licence to the rental bill and let the tenants know this is exactly why rents are increasing.

Send them the email address of the local councillor AND MP and tell them to take the issue up with them.

I also send them the link to show that the local councillor was one of the people who voted in favour of demanding a licence be required for all private rentals in that area.

LL's need to get the message to tenants we don't have a choice but to comply or we can't let the house to them at all. Tenants are very quick to assume it's the landlord always making demands when it is clearly not!

Forget NRLA, they only protect their own interests (which directly feed off the uncertainty in the PRS which they are also contributing to)

Time PRS LL's started educating tenants themselves as to what is really going on!

Paul Essex

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11:21 AM, 7th August 2024, About 5 months ago

Reply to the comment left by Cider Drinker at 07/08/2024 - 09:22
Disability benefits are already on their hit list with sufferers threatened with vouchers or nothing if they have savings 🙁

Mark Smith

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11:50 AM, 7th August 2024, About 5 months ago

I have calculated that the additional cost of licensing to a Landlord is approximately DOUBLE the fee demanded by the council .

This should be obvious the fee is meant to pay the landlords cost in adminisinterng the scheme - but the schemes usually require at least the same of amount of extra admin by landlords and often more.

So a a £1000 license fee will add around £2000 to tenants rents.

OF course Landlords can use membership of the schemes as a "selling point" when they advertise - and to justify asking for higher rents.

But I'm not sure tat is what tenants really want.

The real worry is most enforcement actions by councils seem to be extractng fines from landlords who fali to register or pay license fees to the council or who make admin errors rather than dealing with real tenant suffering. This makes the licence fees more like a local tax on tenanted properties than a quality assurance scheme.

Local authorities need to do much better than simply forcing renters to maintain their beaurocracies from high rents

Reluctant Landlord

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12:17 PM, 7th August 2024, About 5 months ago

Reply to the comment left by Mark Smith at 07/08/2024 - 11:50
SL is not what private tenants have ever wanted!

It has only even been introduced as a cash cow by councils as their funding is being cut from central government.

My local council even admitted by having a SL means it HELPS them to secure more money from central government as they can now prove an area as 'deprived/ASB crime ridden etc'.

While the licence fee is supposed to be ring fenced only to run the SL scheme (yeah right!) , the money that can be applied for to help with 'areas of deprivation and ASBO' is neither capped nor has to be spend in a specific way....

Perfect for those Labour councilors to spend on woke/flavour of the month schemes/ or completely siphoning it off some other way....

Grumpy Doug

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13:24 PM, 7th August 2024, About 5 months ago

Reply to the comment left by Mark Smith at 07/08/2024 - 11:50
Mark, it actually costs a lot more if you have a mortgage and are clobbered by S24. In your example, the £2000 rent rise will be taxed under the S24 regime so just to stand still, you could potentially be looking at £3500-4000 rent rises

Disgrunteld Landlady

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8:30 AM, 9th August 2024, About 4 months ago

People in MIddlesbrough successfully challenged the SL and won, but they Council is once again hounding landlords. As for Durham - We have the most antisocial of antisocial tenants, Druggie, lives off the state, tampered with his meter, throws knives and needles out his window and has threatened to stab anyone trying to evict him. What's the Counci's response.. give me the license fee money and not our problem ! Its just a means to get money and do nothing. All the burden seems to be on the landlord. Not happy. And I know I spelled disgruntled wrong lol.

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