What’s so selective about this licensing?

Richard Blanco, NLA Representative for East London, gives his impression of selective licensing in the region.

Selective Licensing is a hot topic in East London.  Across London, we have seen a few examples of local authorities using this discretionary power and we thought we had escaped the worst.

The London Borough of Newham had piloted a selective licensing scheme in a few streets of the borough comprising Little Ilford from 2009.  They reported considerable improvements around dumping and anti social behaviour, crime and prostitution and an overall improved street scene – plus improvements to housing standards.

Little did we know they had plans to expand the scheme to become borough-wide.

At an NLA meeting in Stratford in November last year, a number of landlords challenged  the Mayor of Newham about choosing the whole of the borough for selective licensing when the legislation was intended to be applied to a select neighbourhood.  Sir Robin Wales replied that Newham was a selective part of London.  This is an imaginative interpretation of the legislation and some landlords in the borough are considering a legal challenge.  We all await the outcome with considerable anxiety and I have started buying in neighbouring Waltham Forest instead.  But I may not have escaped as there is a considerable likelihood of contagion to other boroughs.

Some of my colleagues across the regions have argued that selective licensing targeted at a particular problem locality can be beneficial.  But were these powers really intended to become a back door route to blanket landlord licensing?

I don’t think they were.

And many landlords in Newham like me, who provide good quality homes for local residents, resent the bureaucracy, intrusion and expense that we are to be burdened with, so that the local authority can root out bad practice.

Back in 2009, the Rugg Review of the private rented sector proposed a light touch licensing scheme, where landlords could be given a registration number that could be revoked if they failed to meet legal requirements.  The idea was we would pay a small fee to register online and it would be administered centrally.  If there is a strong public demand for landlords to be licensed, at least I can see the logic behind such an approach.

Selective licensing used in this blanket approach, on the other hand, leaves landlords paying a license fee of £150 per property.  And there is the question of administration:

– How can a borough like Newham possibly visit all 40,000 rented properties? 

– Shouldn’t resources be targeted at finding the rogues and robustly applying existing enforcement powers?

It seems to me using existing selective licensing powers for blanket licensing of landlords is an abuse of the current legislation which distracts focus from the real, pressing questions:

– Should landlords be licensed at all?

– Are local authorities using it as a distraction from their failure to root out bad landlords with their enforcement powers?

– What good does it actually do?

My gut feeling is the demand for licensing is driven by the commonly accepted stereotype that we are all in it for the money and don’t give a damn about our tenants.  Unfortunately, some local authority environmental health staff who spend most of their time dealing with bad landlords start to believe that we’re all the same.

I don’t want to be licensed.  I want to work to shift this stereotype and help other landlords be an effective part of the housing solution in the UK.

Is it not better to compel landlords to learn and change than to simply be counted and regulated?   Blanket licensing is not good policy, it is dogma.

9 thoughts on “What’s so selective about this licensing?

  1. Unfortuately £150 per property is only the tip of the iceberg. Oldham recently proposed a selective licensing scheme which would have cost £450 per property! Charging good landlords does not get rid of the bad ones, that is where Councils should concentrate their efforts.

  2. I think you are lucky in Newham if you are only charged £150 per property in the North East Middlesbrough, Hartlepool and Sedgefield average £450 per property. Yes I agree with Richard though, landlords are being asked to pay for council workers to sit up and do their jobs which they were empowered to do in the first place.

  3. Yes, it’s terrible that most people think Landlords are in it for the money. So what you’re saying is that you would prefer the majority of landlords to have to sign up to a low-cost, low-threshold landlord license rather than be covered by a wider selective license scheme…primarily because of cost?

    Shouldn’t you guys be cleaning up your industry rather than moaning about councils dealing with landlords who let out walk in fridges?

  4. Expect to see more of this. Council tax has been capped and councils are looking for other ways to raise revenue, from parking penalties for example. Why waste time and money rooting out bad landlords when you can simply milk the good ones?

  5. newham council are charging £150 now,but after january it will rise to £500,the question i ask is,how does it effect people who part rent their house,to suppliment their income,especialy if they have worked hard to free themselfs from the tie’s of a mortgage.is this charge a one off?

  6. Because Newham are abusing the Selective Licensing clause (which was intended to be used in problem areas, not a whole borough), I now need to re-mortgage my property!

    My lender (RBS) would be happy for me to let my property, but when they found out it was having ‘Selective Licensing’ applied to it they refused to consent to the license. This is because Selective Licensing was intended to be applied to problem areas, which would be high-risk from a lender’s perspective. But my property is super-low risk; my LTV is tiny (less than 10%) and my neighbourhood is great.

    I have a single property which I have rented out while I am out of London studying at Uni elsewhere – I am not a pro landlord. My house is in good condition in a decent street and my tenants are very happy. It easily meets all safety standards.

    It is absolutely scandalous that Newham Council are abusing their power and causing huge disruption and financial hardship to ordinary people like me, just for the sake of raising new taxes under the guise of regulating ‘rogue’ landlords. Singling out a minority group for punitive taxation and persecution is the hallmark of a tyrant – and that is precisely what Robin Wales is doing.

  7. When lanlords sell their properties where will Newham Council get lanlords to rent at the low rents that they are being charged at present. Proberly about 90% of private tenants are subletting. Newham council is now checking all visitors of flats in towerblock to make sure no subletting is going on. How can private landlords do this.Lanlords are being fined if flats are overcrowed. The flats are being ruined with mildew from the amount of people cheating their landlords

  8. What a scandal – first asked to pay improvements & £500 to comply with license fee & good landlord standards & then have them contact your lender who in turn write back to threaten you ie. RBS pull the <50% LTV Mortgage from under your feet? Are tenants to be evicted too? I see a major legal challenge coming here unless Newham council sorts this stupid mess they created suddenly & sort it out fast! Alternatively u can have your properties & mortgages back! Who needs this harrassment!

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