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Rented Property Licensing Schemes - Don’t Get Caught Out!

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Landlords Licensing Schemes Across the East Midlands

Under the 2004 Housing Act councils have authority to implement discretionary licensing schemes in areas where they consider landlord management and housing standards require improvement. Councils must collect evidence to show there are problems with privately rented properties, including high crime, high antisocial behaviour, low housing demand, poor property conditions and high levels of deprivation. With this evidence councils must be able to demonstrate that a licensing scheme will significantly assist in dealing with the problems identified.

There are two schemes, one that impacts smaller HMOs and one that impacts family housing. A designation can be made for a maximum of 5 years, however, can be lifted sooner if it is felt the problems within the area have been significantly reduced.

Mandatory & Additional HMO Licensing, & Article 4 Directive

HMOs with five or more separate tenants are subject to mandatory licensing, this was introduced under the 2004 Housing Act.

For smaller HMO’s, (typically houses shared by three or four tenants) some local authorities run ‘Additional’ licensing schemes. At the time of writing, in our region, only Nottingham, Northampton, and Charnwood operate a Additional Licensing Schemes.

Councils can introduce new schemes where they believe problems exist in areas with high densities of HMOs not subject to mandatory licensing. The types of problems can include bins left on the street, noise complaints, properties in a state of disrepair, overcrowding, accumulations of refuse and incidences of anti-social behaviour. Councils under the terms of the Housing Act, must provide evidence of these problems being linked to a high density of HMOs in each area before they can designate a requirement for additional licensing.

Landlords looking to invest in Mandatory or Additional HMO’s need to carry out thorough due diligence to ensure that the property they are purchasing has the legal right to be rented as an HMO. Click on the link below for information on Article 4 Planning Consent and Certificates of Lawfulness.

 

Selective Licensing Schemes across the East Midlands

The aim of selective licensing is to raise standards in the private rented sector (PRS), to ensure that tenants live in decent and safe homes.

Unsurprisingly, councils and landlords don’t agree that such schemes are required and the success of the schemes that have so far been introduced is patchy at best. Councils argue that schemes improve standards in the PRS and ensure effective management of properties through more extensive control. Landlords argue that the schemes are bloated and bureaucratic and they only serve to push up rents and starve investment. Central government appear to be keen to push ahead regardless, so resistance to the introduction of schemes can be somewhat futile.

Selective Licensing Schemes are popping up across the region, and all have different criteria and carry different costs. The lowest charge a few hundred pounds, the most expensive somehow costs over a thousand.

At the time of writing, the following Schemes are operating in the East Midlands. Click on the links below for the latest information on the schemes in your area.

 

EMPO’s Overview of Private Rented Sector Regulation

Call the EMPO office on 0115 950 2639 for any advice or guidance on licensing schemes.