A survey by consumer group Which?, working with landlords’ associations, reveals that 70 local authorities now have selective or additional licensing regimes.
The group has also produced a handy guide to the different kinds of licensing that exist - these definitions will be well-known to many agents and professional landlords, but serve as a useful starter kit to newcomers.
Mandatory licensing - If you’re letting out a large HMO (house in multiple occupation) you are likely to need a licence to do so. Previously, properties over three storeys high that were occupied by five or more unrelated tenants needed a licence. But from April, the scope of mandatory licensing will be extended to cover properties with shared bathroom facilities. These changes are subject to a six-month grace period, and you can find further details on the National Landlords Association website.
Additional licensing - Additional licensing schemes also apply to landlords letting out HMOs. The 2004 Housing Act allows local authorities to apply stronger rules in their area if they believe HMOs aren’t being properly managed or that mandatory licensing doesn’t go far enough. These licences vary in cost from area to area but you are likely to pay £500-£600.
Selective licensing - Selective licensing can apply to all landlords in an area. Before awarding you with a licence, your local council will make you undergo checks to prove you are a ‘fit and proper person’, and you’ll need to agree to adhere to various regulations around property management and tenant safety. In some areas you’ll also need to sign up to a charter. Your council will set the cost of the licence, but you could pay around £500-£600.
Properties exempt from selective landlord licensing - These include: Properties already licensed as HMOs under the mandatory scheme, Properties let by a local authority or social landlord, Properties subject to a management order, Holiday lets, Business tenancies.
HMO-related licensing breaches can result in fines of £5,000 to £20,000. For selective schemes your council will set its own penalties, up to a maximum of £30,000 per offence.
You can see the guide and location of the councils here.
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It's a money spinner for local authorities designed to drive rents up and price the lowest income earners out. Selective and additional licensing plus the tenant fee ban, plus increased compliance and legislative costs... All of these things incur costs that will be passed on to tenants.
It is a shame that our tenant clients are going to be forced to suffer the financial circumstances of the costly decisions made by the local authorities and other powers that be as we've already advised our landlords to dramatically increase rent over the next two to three years to absorb these costs. Those on housing benefit will be evicted as their rent increases to that above their local housing allowance, local authorities will have more cases of homelessness to deal with costing the taxpayers even more money....
Not sure who is responsible for the average additional licensing fee stated but I suggest it is doubled! Bristol have recently announced City wide additional licensing at £1660 or £850 with discounts!
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