Councils with selective licensing schemes must think we are stupid

Here we go again, I thought, when reading about Great Yarmouth council on Property118 claiming that there is ‘little evidence’ that selective licensing leads to increased rents.

The council is introducing selective licensing across a range of wards and streets, covering 5,000 homes, that’s around 60% of the borough, at a cost of £694 per licence for five years.

That’s a lot cheaper than some (hello, you shameless mickey takers at Croydon Council wanting £1,250) but if you’re a landlord with five properties in the affected area, you’re looking at nearly £3,500 in fees alone.

Don’t forget that’s an expense before you’ve even replaced a lightbulb.

And yet, with a straight face, Great Yarmouth council assures us this will have no impact on what tenants pay.

Councillors really aren’t living in the real world, are they?

Can landlords absorb costs?

The sad fact is that Great Yarmouth’s councillors aren’t the first to believe this.

Lots have done so and some have insisted that landlords can absorb these costs.

So, I take my hat off to Paul Cunningham, chairman of the Eastern Landlords Association, who has called the council ‘deluded’.

He says the scheme has already pushed rents higher and caused landlords to sell up in the area.

He also points out that in the consultation, more than 90% of respondents were firmly against the scheme, and yet the council pressed ahead regardless.

Is this what passes for democracy now?

But hey, call me cynical because the council can impose fines of £40,000 on a landlord with an unlicensed property from next week. Kerching!

Poor quality council stock

And here’s the part that should make every landlord in the country choke on their morning cornflakes: the council’s own housing stock has come in for criticism over mould issues.

Obviously, the council is exempt from its own licensing scheme.

So, the same authority demanding that private landlords pay hundreds of pounds to prove their properties meet minimum standards cannot be held to those same standards itself?

They don’t even create these schemes and then criticise landlords with a sense of irony.

To me, this is institutional arrogance operating in plain sight.

It’s not hard to understand that a business – that is any business – faced with a new compulsory cost, will pass it on.

That is not greed, it’s simple economics.

Rents will rise

It is the same principle that applies when the minimum wage rises, when fuel duty goes up and when business rates increase.

Nobody accuses the sandwich shop of being heartless when a pasty costs more after rents and taxes increase.

The council’s logic, that licence fees won’t affect rents, only holds if you believe landlords are running charities.

I’ve said before that we are not.

We are providing a service, taking on risk, dealing with maintenance, navigating an increasingly hostile regulatory environment, and trying to generate a return on significant capital outlay.

It’s hard enough when Two-Tier Starmer says landlords are ‘not working people’, but when you add a new cost to that equation, something must give.

Either rents go up, or the sums no longer work and the landlord sells. Either way, the tenant loses.

Selective licensing is dishonest

Places like Great Yarmouth are going to be the focus of interesting business case studies in years to come.

Students will learn what happens when hundreds of properties exit the rental market simultaneously in one area. Where exactly do those tenants go?

This is the central dishonesty of selective licensing as it is currently practised.

It is sold as a tool to improve housing standards, and no one could possibly object to that, while its real-world effect is to drive up costs, accelerate the landlord exodus and reduce the supply of homes available to the very people it claims to protect.

Councils get to feel virtuous, claim in press releases that they are pushing up housing standards, but they don’t talk about generating revenue, especially when they get to keep those gorgeous £40,000 fines.

Tenants get fewer options and higher rents.

Landlords get treated like suspects who must prove their innocence every five years for the privilege of continuing to operate.

The solution is straightforward, even if nobody in local government wants to hear it.

Target council enforcement of poor property standards at the genuine bad actors, and yes, all landlords know they exist.

We don’t want them either, so use your existing powers and target landlords whose properties are genuinely dangerous.

But, please, stop punishing responsible landlords with a blanket bureaucracy and fees dressed up as quality control.

Because one day, and this will come sooner than the councils think, there won’t be enough private landlords left to lecture or fleece with your over-priced ‘licenses’.

Until next time,

The Landlord Crusader