The landscape of the private rented sector in the UK is ever-changing, with new regulations and laws constantly emerging. As a landlord, it’s essential to stay informed about these developments, and one such regulation that requires attention is Selective Licensing Schemes (SLS). In this article, we aim to provide an overview of selective licensing, its purpose, the local authorities that have implemented such schemes, and how they impact landlords and their properties.
What are selective licence schemes? Selective licence schemes were introduced in 2006 to grant local councils the authority to implement licensing for specific types of privately rented properties. The primary goal of these schemes is to enhance the management and conditions of privately rented properties in designated areas. Initially, the introduction of selective licensing was seen as a positive step to target both substandard landlords and anti-social tenants. However, the complexity of the scheme and inconsistencies across different councils have raised concerns, leading to calls for system-wide improvements.
Nevertheless, it’s crucial for all landlords to be aware of selective licensing requirements for their properties.
Are selective licence schemes implemented nationwide? No, selective licence schemes are not uniformly implemented across the country.
The decision to introduce these schemes was made based on specific criteria, ensuring that areas meeting the requirements would implement selective licensing. This approach aimed to prevent landlords in regions where it was unnecessary from dealing with additional administrative burden. Since 2006, the number of councils implementing SLS has increased, with over 100 schemes currently operating throughout the country. Each local authority has its own interpretation of selective licensing, resulting in varying rules and fees from one council to another.
To add to the complexity, local authorities can run multiple selective licence schemes concurrently.
Which London boroughs have selective licence schemes? Selective licence schemes are fluid and subject to change.
As mentioned earlier, not all local authorities have implemented selective licensing, and those that have may operate multiple schemes simultaneously. Unfortunately, there isn’t a centralised database of councils that have implemented selective licensing. Additionally, these schemes have a duration of five years, requiring landlords to directly contact their local council or visit their website for up-to-date information.
Can any local authority enforce selective licensing? Yes, any local authority can enforce selective licensing if they can demonstrate a need for it.
Before implementing selective licensing, councils must meet certain criteria. According to gov.uk:
A selective licensing designation may be made if the area to which it relates 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”
Which properties are covered by selective licensing? The properties covered by selective licensing may vary depending on the local authority.
The specific scheme designation drafted by your local authority determines which properties fall under the scheme’s purview. Some schemes apply borough-wide, while others target specific areas or council wards. To find the current status of selective licensing in your area, the simplest approach is to consult your local authority’s website.
Are selective licences required for all landlords? No, there are exemptions in place for certain cases.
Can selective licences be revoked? Yes, a local authority can revoke a selective licence if they deem the licence holder to be unfit.
The term “fit and proper person” refers to the requirement that licence holders must possess adequate management competence, suitable management structures, and appropriate funding arrangements. The local authority will also consider instances of fraud, breached codes of practice, violations of housing laws, and unlawful discrimination when evaluating the landlord’s fitness for licensing.
What happens if a landlord fails to comply with selective licensing requirements? Non-compliance with selective licensing requirements can result in severe penalties.
The specific penalties vary among local authorities. Landlords may face banning orders, Rent Repayment Orders (RRO), or civil penalties of up to £30,000 in extreme cases. Convictions can also impact a landlord’s status as a “fit and proper person.”
What if a landlord wants to sell or transfer a property covered by selective licensing? If you decide to sell a property covered by a selective licence, the old licence becomes invalid upon sale.
The new property owner must apply for a new licence, which involves completing the full application process, including the local authority’s fit and proper person assessment. A fee will also be required. To ensure ongoing compliance, it is advisable to initiate the application process as soon as possible.
The impact of selective licensing on the housing market and the private rented sector A recent research paper submitted to BMJ Open by SPHR researchers highlighted a decrease in anti-social behavior in areas where selective licensing of private rented housing is in effect, specifically within Greater London.
However, research on the broader impact of SLS across the country is scarce. While addressing substandard housing is undoubtedly important, the effectiveness of selective licensing schemes in tackling this issue remains a subject of debate.
If you’re a landlord based in Brentwood and have properties to let, Hardings Lettings is here to assist you. With decades of experience serving landlords, our dedicated team of lettings experts is ready to provide guidance and support. Feel free to reach out to us with any questions about being a landlord or our property management services.
Contact us today, and let us help you navigate the complexities of the rental market.