Selective Licensing, Is More Change On The Way?

You may be aware that in some areas of the country, selective licensing for the private rental sector is already in place. Currently a local authorities may designate the whole or part of their district as being subject to selective licensing. Selective licensing should not be confused with other forms of mandatory licensing which relate to HMOs and all houses within the private rented sector for a designated area must be licensed, including any building or part of a building consisting of one or more dwellings.

Selective licensing originated in sections 79, 80 and 81 of the Housing Act and came into force in 2006 to provide a means of licensing private Landlords in a local housing authority’s area (i.e areas were tenants were likely to be receiving housing benefits) It was intended to address the impact of poor quality private landlords, poor quality housing and reduce levels of anti-social behavior.

In areas where selective licensing applies, all Landlords are required to obtain a license, which is the Landlords legal obligation (you can find out more here) and Landlords operating without a licence in these areas could face hefty fines (in some case up to £20,000 with additional £5000 fines for any other breaches of the licence)

Currently there are around 70 councils in England – or a little over one in five- that have brought in selective licencing, one of the closest being Nottingham City Council. Each borough can have their own set of conditions that Landlords must meet in order to be granted a licence and each may charge differently for granting a licence, in some areas it could be as high as £1000 for a licence per property, which will need to be renewed every 5 years, so if you have a property and you aren’t sure if you require a licence you MUST check with the local authority (you can find a list of local councils here)

So far Derby City Council has not implemented selective licencing, although it has issued what it calls ‘The Derby City Private Landlords’ Charter’ with a set of standards based on the ‘Housing Health and Safety Rating System’ and with the roll out of selective licencing across the East Midlands, it may not be long until Derby City Council follows suite. According to an article published by an online industry publication ‘Letting Agent Today’ a recent independent review of selective licensing made a series of recommendations for further tightening of the process which were broadly supported by the Government, so it may not be long until we see selective licensing expanding yet further across the local authorities.

With all the changes that we have seen with regard to tax, tenant fees and now the possibility of licensing, it is more important than ever to make sure you seek sound advice from an expert before becoming a Landlord. Our team at Hannells Lettings are fully trained, ARLA Property Mark protected and up to date on all legislation with relation to the private rental sector, so please give us a call or click here to book a consultation. Our advice is free of charge and could be invaluable!