Since 2006, property owners in Scotland have had to be registered with their local authority in order to let their property. Registering costs £55, with landlords who fail to comply facing hefty fines of up to £5,000 and risking a criminal conviction. Wales is likely to introduce their own licensing scheme following a vote in the Welsh Assembly, and while there are no plans to do so in England, some English local authorities have brought in schemes in all or part of their areas.
Some, like the scheme in Sheffield, are voluntary, and some, like that in Leeds only apply to certain areas, in which housing standards are generally poor. Newham’s recently announced scheme is the first to be mandatory for all landlords across the authority, and will be introduced from January 2013. Landlords will have to pay £150 to register with the scheme, and prove they have relevant safety certificates and landlord insurance. Fines for failing to register could be up to £20,000.
Potential Costs
Understandably, registration schemes can be unpopular with landlords, being an extra layer of bureaucracy to get through before they can let their properties. Those who let through agencies still need to register as landlords, so cannot pass on the responsibility. They can also be costly, especially for those who own multiple properties. The National Landlords Association has come out firmly against compulsory registration.
Commenting on the Newham scheme, Chairman David Salisbury said ‘It is deeply disappointing that the London Borough of Newham has taken the decision to license all landlords in its area’. They believe that a mandatory scheme is unfair to landlords who do look after their properties and tenants, and could discourage people from becoming landlords.
Potential Benefits
These concerns are understandable, but there are some benefits for landlords too. Licensing helps drive out rogue landlords, improving the public reputation of landlords as a group. Better-quality housing stock helps improve the market for all, and can help landlords in run-down areas let their properties more easily and for a better price. Better quality housing can help reduce anti-social behaviour and encourage tenants to take more pride in their homes, reducing costs to landlords.
Licensing can help the public see landlords as a genuine and accredited profession, increasing respect between tenants and landlords. With a sluggish housing market and reduction in social housing provision making the private rented sector more and more significant, increased professionalism may mean that tenants are more willing to work with their landlords to keep their properties in good condition. There is evidence that tenants prefer to use accredited landlords. Newham landlords may find that while they face increased costs when letting their properties, they also have more tenants to choose from.