When a property is subject to licencing, there are certain criteria that must be met before a licence is granted by the local authority.
Properties must be fit for purpose and meet specific minimum health and safety standards, and landlords must be able to prove that they and whoever is managing the property is a ‘fit and proper person’.
Without a valid licence, the property cannot be let and landlords found to be in breach can be fined anything up to £30,000 by their local council.
While ‘large’ Houses in Multiple Occupation (HMOs) – that’s any property housing five or more people from more than one household – have to be licenced under national rules, individual councils in England have the power to extend this to any size of HMO within a specified area under an ‘additional’ licencing scheme.
Meanwhile, ‘selective’ licencing schemes can be applied to any privately rented property, regardless of size or occupants, so in some areas all rental properties require a licence.
The new licencing rules for rental properties in England
Until the end of last year, if local authorities in England wanted to implement a selective licensing scheme that covered more than 20% of the area or affected more than 20% of privately rented homes, they had to get approval from the Secretary of State.
But in December, the Government announced this would no longer be necessary, meaning councils can now introduce larger schemes more quickly and easily.
Although they must consult for a minimum of 10 weeks on any proposals, there’s a huge variation across the country in terms of how widely and well new licencing rules are publicised – and that means landlords in some areas have to be very proactive in seeking out the latest changes.
On the one hand, licencing is a necessary tool to help councils ensure there is the right balance of housing and occupancy in each part of their area.
However, because larger licencing schemes no longer require government oversight, there is the potential for every local authority to require all rental properties to be licenced – and there are concerns within the industry that some councils will do this simply because the licencing fees and landlord fines will provide a valuable extra revenue stream.
It also seems at odds with the introduction of a landlord database, as proposed in the Renters’ Rights Bill (and the Renters Reform Bill before it), which it was suggested would help councils monitor privately rented properties within their area without the need for selective licencing schemes.
According to Yuno – a company that helps property managers, lettings agents and landlords comply with lettings legislation, including whether you need a licence or not, Barking and Dagenham will be one of the first local authorities to introduce borough-wide licencing under the new rules, with a selective scheme beginning on 6th April.
A total of 37 councils currently have selective licencing schemes under consultation, with fees ranging from £350 in Ashfield to £1,090 in Leicester for a five-year licence.
As a landlord, it’s vital to check the local rules before buying any property to make sure you’ll be able to let it in the way you intend – bearing in mind that the council can refuse to grant a licence.
Your local authority website should have information about any licencing schemes currently in effect or under consultation, but this is not always easy to find.
And a new scheme could be introduced at any time, meaning you need a reliable way of staying up to date or risk being fined.
However, not all councils publicise the introduction of a licencing scheme particularly well, so it’s advisable to check with one of our lettings experts prior to buying or changing your let to letting rooms.
With this and the huge changes that will start to be implemented this year once the Renters’ Rights Bill is passed, if you currently self-manage it’s well worth considering moving over to work with a qualified agent that can help you continue to let legally and safely.
At Reeds Rains, our agents are trained and kept up to date with legal changes, supported through our membership of Propertymark, so we’re well placed to help you navigate the new rules.
If you’d like to discuss our services or any aspect of licencing or the RRB, just get in touch and one of our experts will be very happy to help.
You can find the details for your local branch here, or alternatively you can book a lettings consultation to find out how much your property could let for.
The Reeds Rains Content Marketing Team
