Landlord licensing will cut stock and hike rents, warns top agency

One of the leading lettings agencies in Liverpool has issued a warning about the city’s controversial new licensing scheme.

The Labour council in Liverpool has been in conflict with the government over the scale of the licensing scheme, which has eventually been resolved with 45,000 properties in 16 electoral wards covered. A council spokeswoman has said: “Too many vulnerable people in our city are in poor housing conditions, paying rent to a landlord who doesn’t carry out maintenance to keep them warm and safe. The Landlord Licensing Scheme will give us regulation of private rented houses so we can take action when concerns are raised.”

However, now the City Residential agency has spoken of the side-effects.

In its latest report to landlords it says: “Many landlords have been clobbered over the last four to five years with copious amounts of new legislation, regulations, and tax increases. Whilst several of these initiatives have been logical and required to maintain standards in the rental sector it has still had a negative impact on the number of landlords staying in the private rented sector and new investors buying in.

“We already have a situation on Liverpool generally where there is a lack of decent rental stock available to soak up the ever-increasing demand from tenants. This shortfall is creating a supply-demand shortfall which is resulting in rapidly increasing rents especially in many of the more popular locations.

“Introducing a further layer of regulation and cost will no doubt discourage many landlords from staying in the rental market especially at a time when a hot housing market has increased the value of most properties. If we do see landlords selling up there is no doubt that this could reduce the supply of rental stock in the city and create further upward pressure on rents something which may be an unwelcome side affect of a scheme brought in to protect tenants.”

City Residential continues: “We feel the approach should be more targeted, pursuing these landlords and properties with track records of poor provision and compliance, hitting them harder and ensuring that they have signed up to the scheme. 

“A more focused scheme would allow a more aggressive clampdown on those landlords and agents who are not complying. Yet if the city centre area and other areas of higher compliance are removed how will the council pay for all the other inspections enforcement and data collection?

“This scheme, like the other 50 plus around the country, promises that any license fees paid must only be used to cover the cost of the staff employed to implement and run it. It could potentially raise the not insignificant sum of £15m to £20m, so we are keen to see that this money is spent wisely and focused on the areas where it will result in the biggest impacts.”