Since 2010, local councils in England and Wales have been able to introduce landlord licensing schemes, most commonly requiring landlords to purchase a licence for each rental property they own in a specified area.
The majority of areas in England and Wales have some sort of licensing over Houses in Multiple Occupation (known as HMOs and used by many student landlords) but the type of licensing that has caused controversy and courted headlines since 2010 is known as selective licensing.
Selective licensing schemes cover privately rented properties in designated areas that are deemed to be suffering from low housing demand and/or significant and persistent anti-social behaviour.
In the past five years, many local councils have taken advantage of the Government legislation and the pros and cons of licensing schemes have regularly been debated among property professionals, industry bodies and, more recently, in the Houses of Parliament.
The idea behind licensing schemes is to stamp out rogue landlords and increase the quality and standards of rental properties. However, those in opposition to licensing have often labelled it as a money making initiative for local authorities.
What’s more, some residents in areas where licensing has been consulted or introduced have raised concerns that it will stifle investment into the rental sector in favour of neighbouring areas where there are no restrictions on private landlords.
All proposed schemes have to go through a consultation period, during which authorities are required to liaise with those likely to be affected - tenants, landlords, landlord organisations and others in the local community.
A selective licensing scheme does not come into effect until three months after it is made and may last for up to five years. The cost per property ranges from around £200 - £500 and fines for those who don’t purchase one and continue to rent out a property have been quoted as up to as much as £20,000 in some areas.
Up until recently it had been a matter of luck whether a landlord’s properties would fall under a selective licensing scheme. Since March, however, things look like they could be changing for the better.
Government intervention, effective from April 1, means councils will no longer have the clout to licence landlords’ properties across a whole borough . Local councils will now require Government approval before implementing a licensing scheme if they plan to license a large area or proportion of the market.
After a turbulent and confusing five years, this is good news for landlords and means that the crackdown on rogue operators can continue but under what will perhaps be a fairer and clearer system.
Below is a list of all locations in England and Wales where selective landlord licensing schemes are currently in place. The National Landlords Association has developed an interactive map to keep landlords up to date with new licensing schemes and areas that are consulting on schemes.
To make sure you don’t fall foul of a licensing scheme, it’s wise to check with a local representative from a landlord body and to regularly read and check industry news outlets.
- Waltham Forest
- Griffin Area, Lancashire
- South Beach, Lancashire
- Burnley (Designated areas)
- Accrington (Designated areas)
- Swinton (Designated area)
- Oldham (Designated areas)
- Gateshead (Designated areas)
- Wembley Area, Easington Colliery (Durham)
- Gresham, Middlesbrough
- Newcastle (Designated area)
- South Bank, Redcar and Cleveland
- Sunderland (Designated areas)
Yorkshire and Humber
- Leeds (Cross Green and East End Park)
- Rotherham (Designated areas)
- Hexthorpe, Doncaster (Comes into force on July 1st 2015)
- Stoke-on-Trent (Designated area)
- Wolverhampton (Designated area)
- Bristol (Designated area)
- Margate (Designated area)
*In line with the NLA’s landlord licensing map, this information is correct as of May 1st 2015.