Landlord, are you compliant with selective licensing?
It’s time for more change in housing legislation, this time over licensing. The Housing Act 2004 gives all local councils the option to introduce the need for landlords to apply for a license to let a property on the private rental market, either when rented to a single household (such as one family) or two unrelated sharers (like two friends living together). Licenses come with conditions that relate to how the property can be used by the tenants, and additionally how it can be managed by the landlord. Selective licensing was Part III of the Housing Act and came into force in 2006, but this year the net is widening, and more and more councils are bringing in selective licensing in order to improve the private rental market. If you’re not compliant, you should act now or be faced with prosecution or a hefty fine.
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Author
Fourlabs Copywriting Team
Date
13.06.2023
What is selective licensing?
A selective licensing scheme requires all private landlords in a designated area to have a license to rent out their properties on the private rental market. The aim of selective licensing is to improve the rental market, ensuring that the property is of a high enough standard for the landlord to rent out to tenants. It gives tenants peace of mind that houses and flats in a certain area will be healthy and safe to live in. Landlords are required to pay for a license (the amount is set by each council) and the license is usually valid for about five years. Applications are generally processed within 12 weeks and the increased licensing will start to be enforced in autumn 2023 – so landlords should start now to be fully compliant by that time.
Which areas have selective licensing?
Councils across England and Wales may introduce selective licensing anywhere that they see fit, in areas that are affected by one or more of these issues:
- Low demand for housing, with few people wanting to live there
- Long-term problems with antisocial behaviour
- Housing in a poor condition
- Short rental periods lack of long-term tenants
- Lack of basic amenities, or distance from them
- High levels of crime, depravation or migration
The licensing area won’t usually cover all areas of a town or city – so it’s really important that individual landlords check with their local authority if their properties are within a designated licensing area.
How do I apply for a landlord license?
Most councils offer the ability to apply online. Each council has its own set of mandatory conditions which landlords must meet in order to be granted a license, such as having a valid Gas Safety certificate, a specialised floor plan and to ensure that all appliances and furniture are in good condition.
Why do I need a plan for a property under selective licensing?
Licensing plans aren’t a ‘nice to have’ – they are a legal requirement as part of the application process. What’s most important to remain on the right side of the law is to ensure that your plan is drawn by a competent and professional team, who understand the importance of accuracy. A good provider (such as Fourlabs) will draft a plan from your sketch which shows not only the layout, but also fire and carbon monoxide detection alarms and firefighting equipment, such as 30-minute fire resistant doors, extinguishers and ‘break glass’ call points.
In need of a licensing plan?
Are there any exemptions to the scheme?
Landlords may not need to apply for a selective license if their property is already licensed as an HMO; managed by an educational or agricultural holding; or let by a social landlord such as a housing association.
What happens if I don’t comply?
Failure to comply with the requirements of the Act could see landlords face criminal prosecution, unlimited fines or a civil penalty of up to £30,000. In places like London, landlords could also be added to the ‘rogue landlord checker’ online.
How does selective licensing benefit me, as a landlord?
Selective licensing isn’t a bad thing – it can offer many benefits and having a valid license sets you apart as a ‘good’ landlord, making your properties more attractive to tenants. It’s also believed that the management of privately rented properties will positively improve neighbourhoods, leading to:
- More people wanting to live in the local area, and stay for longer
- Reduction of empty periods when the house is not let (increasing rental income for landlords)
- Increase in property values as the area improves, and increase in demand
- Reduction of antisocial behaviour and crime
- Improvements in sustainability and quality of life.
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