Fair Rents (Scotland) Bill or Artificial state manipulation of free market rent?10:34 AM, 6th November 2020
About 3 weeks ago 36
In the last year it has become very clear that many Local Authorities are looking very carefully at Private Sector Landlords and the various aspects of licensing.
Some Councils have considered Selective Licensing, a discretionary scheme that allows local authorities to introduce licensing for all privately rented properties, with a charge, in a given area. Others have examined Additional Licensing, which is basically extending Houses of Multiple Occupancy (HMO) licensing to smaller properties.
The introduction of both Selective and Additional Licensing requires a consultation period, with all interested parties given the opportunity to submit objections.
In Norwich, the City Council has increased the cost of its HMO Licence from £270 to £1800, an increase of over 650%. No consultation was required for this huge leap in the fee for a five year licence. This was voted for by local councillors, the elected representatives. In Norwich there are about 160 HMO licences, representing now an income of £288,000 over a five year period. To calculate this £1,800 figure a toolkit was used from Central Government, and the legislation states that the council cannot use the fee to raise revenue. The running of the scheme, unlike some other council work was not put out to tender, and a question must be asked what does the private landlord receive for his/her money? It is interesting to note that in Lincoln, a similar sized city, there are 170 licensed HMO’s and the fee starts from £370 for a five year licence. WHY?
The changes to Housing Benefit mean that whereas a single person up to the age of 25 received benefit for shared accommodation, and those over 25 for a one bedroom property, the age limit is now 35. One of the consequences of this is that more single people will need shared facilities. Where will these individuals live?
A result of the HMO changes already implemented make it less likely that the private sector will supply, and those that do will almost certainly increase rent charges to cover their increased costs. More landlords will face these increased costs with the introduction of Selective or Additional Licensing, imposed by councils.
Landlords, generally, are law abiding citizens who pay their taxes and as a group contribute considerably to the local and national economy. The private sector landlord will have fire alarms, gas and electrical systems tested as required by the law, ensure they have the necessary insurance cover, pay tax, join a landlord association to ensure they are up to date and have access to a helpline, all at a cost to the landlord. If they sell a property and buy another to improve their stock, and offer improved housing to tenants, they will pay capital gains tax with no rollover relief. They believe in value for money and a 650% increase in one of their costs is very difficult to reconcile.
Peter Davies, Chief Executive of Eastern Landlords Association (ELA) said; “We are asking local authorities that plan to bring in further schemes, or in the case of Norwich City Council where a change has been made in fees – How many landlords have you successfully prosecuted due to failure to meet the legal requirements of the 2004 Housing Act and other legislation?”
The ELA is strongly encouraging its members to contact their local councillor and ask their view on further licensing for private landlords in the area where they have properties. Local Authority websites will have contact details for councillors. In those areas where there are already planned, or implemented changes, the ELA are asking their members to ask their councillor to justify and outline the repercussions for housing standards and availability. The private sector now supplies to the rental market as many properties as the social sector, who are not subject to these dramatic changes. In addition ELA are asking members to make their MP’s fully aware of the increasing burdens being placed on landlords as they strive to continue to supply homes for millions of people.
Peter Davies went on to say; “Here at The Eastern Landlords Association we will continue to support and advise all our members, and would ask all members to confirm to the office that they support us in our continuing action.”
Mr Davies would welcome you to post any questions in the comments section below. Alternatively, the Eastern Landlords Associations contact details are below:
Address: Suite A, St Francis House, 141-147 Queens Road, Norwich, NR1 3PN.
Tel: 01603 767101
Fax: 01908 512245
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.
Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agentsLearn More