Landlord Licensing - Time to stop the councils

It’s time to abolish what is colloquially called Landlord Licensing.

If you’re a casual reader and perhaps not in our industry, a quick definition: by ‘landlord licensing’ I mean the systems operated by some (but not all) councils which require landlords to apply for licences before they rent out properties.

This system allows councils to check whether landlords are - in official parlance - “a fit and proper person”, as well as meeting other criteria concerned with safety and measures to avoid or remove anti-social behaviour by tenants.

If that sounds sensible and commendable, it’s because it is.

But from the passing of the Renters Reform Bill into law (estimated this coming summer) the self-same safeguards will exist at national level through a range of provisions such as a Property Portal, a national register and a mandatory ombudsman scheme, all being set up to stiffen standards in the private rental sector.

So if all this exists at a national level - as it will, and soon - let’s make sure we’re not wasting time, money and staffing at local level from doing the same thing, and doing it less well.

Let’s look at why landlord licensing by councils is becoming redundant.

1.  Duplication: At a time of public spending cuts it’s surely nonsense to effectively have the same tasks done twice?

2.  Effectiveness: Different councils currently operate different licensing schemes - and some operate none at all. The policing of these schemes is left largely to councils themselves and can be very patchy; what’s more, these local authorities are facing spending cuts and some Trading Standards divisions have been slimmed down.

3.  The Risk Of Over Regulation: We have over 150 national laws impacting on the private rental sector, plus a lot more applied in some areas only. The Renters Reform Bill will impose more and, should Labour win the next election, there may be more still.

4.  Councils May Not Be Trustworthy: Just this month a report from Ernst & Young has revealed Nottingham council finding it difficult to ring-fence money from its selective licensing scheme. Officially the money should be kept for enforcement but the report reveals a “a perception that reserves generated from surpluses [by these activities] are on occasion treated…as a means of meeting organisational budget pressures”. In other words, these could be regarded as fund-raising measures and nothing else.

5.  Councils May Also Be Inaccurate: Again this month, as reported on Landlord Today, Durham County Council is being scrutinised about how it uses automation to include and exclude some properties from licensing schemes. Some consider the process to be arbitrary and inconsistent. A local MP is seeking clarification from the council and a disgruntled ex-landlord is considering organising a class action to see whether such a scheme is fair. If there is a problem, is this likely to be the only such instance?

6.  There Is Little Expert Support for Licensing: I’m open to correction but I believe no independent voice has supported these arbitrary, patchy, and varying schemes. Groups such as Generation Rent want schemes, both local and national, possibly because they help tie up landlord time and reduce their income; better briefed organisations such as the Chartered Institute of Environmental Health want them because (I would contend) their members’ jobs are at risk if councils lose this task. But so far I have heard of no independent, authoritative body wanting such regimes at both local and national levels.

It’s important to note here that we aren’t talking of opposing licensing per se, nor disputing what it seeks to achieve - it’s the means to get it that is under scrutiny.

And if we can achieve improved quality housing stock and better prepared landlords through a national scheme, applied uniformly with a better chance of adequate resources for enforcement, why instead have a mish-mash of local schemes subject to endless spending cuts?

It’s a no-brainer … unless, of course, you’re motivated more by envy and spite towards landlords than you are by actually improving the private rental sector.