The Housing Act 2004 provided for the introduction of selective licensing of private landlords in a local authority’s area. The provisions came into force in April 2006 and apply in England and Wales. In an area subject to selective licensing, all private landlords must obtain a licence. If they fail to do so or fail to achieve acceptable management standards, the authority can take enforcement action.
What is Selective Licensing?
The Housing Act 2004 allows local authorities to apply for Selective Licensing of privately rented properties in areas which are experiencing low housing demand and/or suffering from anti-social behaviour.
From 1 April 2015 local authorities in England are required to obtain confirmation from the Secretary of State for Communities and Local Government for any Selective Licensing scheme which would cover more than 20% of their geographical area or would affect more than 20% of privately rented homes in the local authority area. The criteria for Selective Licensing was also expanded. It now covers areas experiencing poor property conditions, an influx of migration, a high level of deprivation or high levels of crime.
How does this affect you as a landlord?
Selective Licensing was brought in by the Housing Act 2004 and expanded in 2015. So far around 70+ councils have rolled out licencing.
The scheme is supposed to increase the quality of housing but our Chairman, Brett's personal thoughts are that this is questionable and there has been little enforcement despite the windfall of income to councils. In fact many councils are charging for a 5 year licence yet their trial periods are less (don’t get him started on that).
Brett is not the only one who thinks it doesn't work, here's David Cox, Chief Executive ARLA Propertymark
“Licensing does not work. Licensing has never worked and never will work… Newham have done 1,200 prosecutions, or 240 a year, out of 47,000 properties. That is 0.5% of properties in their area that they have done anything about and have done prosecutions. I would note that that is with 140 officers. They have 40 police officers; 100 enforcement officers and they have done 240 prosecutions a year. That is less than two prosecutions an officer.
If that is what is classed as success—and it is classed across the industry as the most successful licensing scheme in the country—really what does that say? It is pitiful.”
“What we need is education. Landlords need to be trained in what they need to do. Agents need to be trained in what they need to do. Filling in a piece of paper and giving it to the council and paying £500 is not going to teach them the 150 laws that they need to understand.”
Regardless, if your property sits in one of these areas you do need to arrange a license or the penalties for failing to do so are severe and without a license we will not be able to let your property.
Making the Application
The application will cost you around the £500-£1000 mark for a 5 year licence (it varies with councils) the actual application takes between 2 and 5 hours.
If you don’t have your original documents, you will need to be in contact with your Solicitor (they may charge you a fee), Mortgage Broker(who may charge you a fee), Managing Agent (who will definitely charge you), and us as your Sales & Letting Agent.
You have two choices, well three...
Do It Yourself
You're happy to take full responsibility.
It’s likely to take around 5+ hours of your time, probably more.
We've completed many of these and they are ridiculously difficult and detailed.
You will also be responsible for submitting updated data in some cases every 6 months.
Done For You
We work with you to get all the documents and oversee the entire application including updating the council as required.
For £180 incl VAT* and we oversee the whole process and application including re-submitting documents as required to fulfil the licence requirements.
Whilst we may hold a good number of documents and knowledge of your property you will still need to provide the missing documents where required.
Not Really An Option
Not really an option and as an agent we would NOT support this decision.
The penalties include not being able to let the property and up to a £30,000 penalty notice or unlimited fine.
So let’s put that aside right away otherwise peril awaits.
Make no mistake it’s a pain in the a*se for realistically no worth. (Thank you bureaucracy!)
You may have noticed that we're not particularly impressed with the government on this issue but it is what it is and as a Landlord you now need to apply yourself or have our team manage the process for you.
Your Property Data Finally Stored in One Place
EzyVault The Silver Lining…
As part of the process, Ezytrac has already built a database where we can store all your property’s information so it’s in one place.
This data will be used for more than just this the licensing application but will also help when you sell, remortgage or deal with who-knows-what-the-government-will-dream-up-next.
Next Step... Speak to the team about Landlord Licensing.
During our call we will achieve the following:
* Only available to Ezytrac Property Group landlords.
* Done For You solution is at the sole discretion of Ezytrac Property Group Ltd.