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Licensing update - councils continue crackdown

Posted on 2017-09-22

Licensing update - councils continue crackdown

Licensing of private landlords is a controversial issue that's never far from industry news.

Over the summer there's been a number of new schemes introduced or proposed, and more landlords have been fined for non-compliance with licensing operations.

There's also been an interesting development in the capital, where one authority has been using its licensing scheme to work out which landlords have not been paying tax.

New schemes and proposals

Since the beginning of August there have been a number of updates, confirmations and proposals regarding licensing schemes around the country. Here is a roundup of some of the most high-profile:

Redbridge: In early August, Redbridge Council in north east London officially launched its property licensing scheme. Landlords operating in the borough are now required to purchase a licence for each property they let and will be prosecuted for non-compliance. Licences cost £500, reduced to £250 for those who purchased before September 13.

Nottingham: Councillors in the Midlands city have approved a new selective licensing scheme for the area, which is likely to be introduced next April pending state approval. The original proposal was revised from a city-wide initiative and will now cover almost 4,000 fewer properties. It's thought licences will cost landlords between £400 and £665.

Brent: Another London authority, Brent Council, is lobbying the Government to allow it to introduce a borough-wide selective licensing scheme. Parts of Brent are already licensed, but this extension would see thousands more landlords in this part of north west London required to comply.

Barnsley: In Yorkshire, Barnsley Council is currently consulting on a selective licensing scheme with the aim of clamping down on criminal landlords and reducing anti-social behaviour. If approved following the consultation, the scheme will affect almost 600 rental properties in parts of Elsecar, Wombwell, Goldthorpe and Measborough Dike.

Wisbech: Fenland District Council in Cambridgeshire, which has long been trying to introduce a selective licensing scheme in the market town of Wisbech, has recently been asking local landlords and letting agents to attend drop-in sessions to give their views on its proposals.

Fines for non-compliance

As is customary, authorities from all around the country have been handing out fines to landlords in recent weeks and months. Alongside prosecutions for neglecting tenants and letting unsafe properties, there have also been a number of rulings for non-compliance with licensing schemes.

A private landlord was fined £10,000 by Hastings Borough Council for failing to license his rental property which is located in the area covered by the authority's selective licensing scheme.

In Peterborough, four landlords were the first to be fined under the area's licensing scheme for non-compliance. The initiative was launched last December and Peterborough City Council says it has received applications from over 6,500 landlords.

Meanwhile, in Wales - where all landlords are now required to have signed up to the Rent Smart Wales licensing scheme - one buy-to-let investor was fined more than £4,000 for missing the scheme's training and registration deadline.

Landlord licensing and tax collection

It was revealed in August that one council in London is using its licensing scheme to identify which landlords haven't paid their tax bill. Working alongside HM Revenue & Customs (HMRC), Newham Council estimates that almost half (13,000) of the 27,000 landlords under its licensing scheme have not registered for self-assessment tax returns.

This is a significant figure and, if accurate, could be costing the public purse a hefty sum of money each year. In 2014, a research project carried out by the Newham authority in association with the Institute for Public Policy Research suggested that undeclared tax from London landlords could amount to as much as £200 million each year.

Newham Council is known as a pioneer of landlord licensing - it was in fact the first authority in the country to introduce a borough-wide selective licensing scheme back in 2013.

Since then, the London council has made over 1,000 prosecutions and banned almost 30 landlords from operating in its district.

The Newham scheme is currently up for renewal, with a Department for Communities and Local Government decision expected soon. 

This is an interesting development and it wouldn't be a surprise to see more pro-licensing authorities use their schemes to crackdown on tax. It also raises the question of a future nationwide licensing scheme in partnership with HMRC.

Further reading

If you're based in the capital, the London Property Licensing website is essential reading and we would recommend signing up to its regular newsletter too.

For landlords outside of London, the National Landlords Association has a helpful map detailing all licensing schemes and their current status.

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