NALS reveals big annual fee increases for London lettings licences

Research by NALS has revealed extensive increases in the cost of licensing of lettings properties and landlords by local authorities in London.

The scheme describes the system as a lottery which could, in some cases, force more landlords out of the private rented sector because of the huge fees in some boroughs and widespread discrepancies across the capital.

Following the government’s recent decision to widen the mandatory House in Multiple Occupation licensing scheme to another 160,000 properties across England, the issue of fees is even more important as these increasing costs could also drive rents up across the country.

NALS research, conducted by London Property Licensing, shows that in 2017, licensing fees for a three storey House in Multiple Occupation with five unrelated occupants can range from £125 (City of London Corporation) to £2,500 (Lewisham Council).

In 23 of London’s 33 boroughs licensing fees are over £1,000 for a similar sized property. 

Overall, average fees have climbed every year since 2014 and the average cost has risen by 12.9 per cent in 2016/17 and a further five per cent this year, standing at £1,119.

As well as increased costs, there are now 29 separate additional and selective licensing schemes in operation across London with more schemes on the way. 

NALS says this means that landlords can potentially face licensing their properties through different schemes in different parts of the city, each with their own application processes and requirements.

The scheme is now calling on the Mayor of London to take the lead and create a single licensing scheme across London, which it claims would cut the administrative burden on landlords and introduce efficiencies across the sector.

“We should be clear: licensing HMOs helps protect tenants and drives up standards in the private rental sector. At the same time, the maze of licensing schemes operating in the capital is a huge financial and administrative burden on landlords, with some councils seeing them as a new revenue stream” says Isobel Thomson, NALS chief executive.

“With landlords under pressure from a host of regulatory changes, this increased burden is likely to push them out of [the sector] exactly at a time when they have a key role to play in providing much needed housing.

“If we want to improve the private rentals for all, we need to see a more joined up approach, with a light touch, streamlined licensing scheme for London. This would help to minimise operating costs and keep fees to a more reasonable level.”