Selective licensing is a contentious topic for many landlords. We receive a number of queries from our members about why it’s being introduced in their area and what the National Landlords Association’s (NLA) position is.
In a three-part series, Gavin Dick from our Policy Team explains what selective licensing is, why it’s used, and how the NLA represents its members on this topic.
What is it?
Licensing in its current form started in England and Wales with the Housing Act 2004, which stemmed from a Labour Party manifesto pledge ahead of the 1997 General Election. The intention of the incoming Labour Government was to prevent gazumping of homebuyers, but like all pledges in manifestos that get turned into laws, the Act of Parliament soon became a vehicle for many other housing policies.
The Act saw the creation of home information packs (HIPs); the establishment of the decent homes standard; the formation of the legal framework for tenancy deposit protection. Overall it significantly extended regulation in the private rented sector (PRS), principally regarding houses of multiple occupation (HMOs). As part of this, the Act also allowed local authorities to introduce selective licensing schemes.
The aim of this provision was to enable local authorities to address specific concerns in particular pockets of their jurisdictions. Licensing was seen as a tool to enable local authorities to monitor and/or raise standards where there were concerns about the impact of private rented accommodation, or tenants, on the local community.
When this part of the Act originally came into force in 2006, if a local authority wished to introduce selective licensing, they needed to apply to central government for approval. It covered areas with low demand or where significant anti-social behaviour could be demonstrated. A few local authorities proposed schemes, which were introduced, usually in a small area and with a strong evidence base.
In 2010, as one of the last acts of the Labour Government, the then minister, John Healy MP, relinquished the centralised power to decide under the ‘localism’ agenda. Local authorities now had the power to grant approval for selective licensing in areas, for example where there was significant anti-social behaviour or low housing demand, without applying for government consent. Who could be against local people making local decisions?
This saw an inevitable increase in schemes and, in 2011, the London Borough of Newham proposed a significant scheme covering the majority of the borough, expanding on their existing scheme in Little Ilford. This widespread approach by Newham saw a slew of other local authorities follow their lead, although none were as comprehensive or as successful in their execution.
In 2015, in response to concerns that selective licensing was being used beyond its intended purpose, the Coalition Government reviewed the provisions, issuing new guidance to local authorities in April 2015. During the review, the NLA lobbied the Government repeatedly to prevent local authorities from introducing schemes without an evidence base. The Government kept the decision making at a local level, but introduced more criteria for councils seeking to introduce selective licensing.
A scheme can now be introduced, following a public consultation, if it satisfies one or more of the following conditions:
- low housing demand (or is likely to become such an area)
- a significant and persistent problem caused by anti-social behaviour
- poor property conditions
- high levels of migration
- high level of deprivation
- high levels of crime.
However, if the local authority wants to introduce the scheme to more than 20 percent of the PRS in a specific area, it must be approved by the Ministry of Housing, Communities and Local Government.
The next post in this series will look at why local authorities use selective licensing.
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