Housing Minister has reduced powers of Councils to licence landlords

by Property 118

12:36 PM, 12th March 2015
About 4 years ago

Housing Minister has reduced powers of Councils to licence landlords

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Housing Minister has reduced powers of Councils to licence landlords

NLA logo colourLocal councils will no longer have the clout to licence landlords across a whole borough or city after Brandon Lewis, the Minister of State for Housing and Planning announced reforms of Selective Licensing, restricting local decision-making powers. The changes are to come into force on 1 April 2015.

Since 2010, local councils have had the power to licence landlords across an entire borough or jurisdiction in order to combat issues such as anti-social behaviour in so-called ‘hotspot areas’. This has led to a sharp increase in the number of schemes being introduced.

However, today’s changes mean that councils will require government approval before implementing a licensing scheme if they plan to license a large area or proportion of the market likely to be above 20% of either the geographical area covered by the council or the local private rented sector (PRS).

The decision comes after sustained lobbying efforts by the National Landlord Association (NLA) since 2010 and after the NLA published its report on the state of landlord licensing across the country, in February. The report points to a boom in the number of blanket licensing schemes since 2010 but highlights a lack of enforcement actions being taken by local councils. It also shows a correlation between the political control of a council and their tendency to license landlords.

Richard Lambert, Chief Executive Officer at the NLA said:

“We’ve argued solidly since 2010 that councils have been abusing their power to push through blanket licensing schemes.  Today’s announcement means that if a council intends to licence a large proportion of its housing it will first need to show the case stands up to independent scrutiny.

“The Government was the first to see a copy of our licensing report, and we’re delighted they have listened to our case because at present the driving force behind licensing landlords seems to be the political will of a given local council, regardless of the evidence.

“Many local councils won’t like this decision one bit because until now they’ve been their own judges, and the only way for landlords to challenge them has been through the difficult and complex route of judicial review.

“Landlords are getting fed up with being unfairly targeted and made responsible for problems such as anti-social behaviour when in reality they have little effective control over the issue, except by eviction. Hopefully this now means that councils who are serious about tackling poor property standards and anti-social behaviour will first look to the extensive existing legal powers they already have to combat the issues”.



Comments

Neil Patterson

12:37 PM, 12th March 2015
About 4 years ago

A good step forward for accountability.

John Daley

15:21 PM, 12th March 2015
About 4 years ago

Reply to the comment left by "Neil Patterson" at "12/03/2015 - 12:37":

Hi Neil,

Have to agree that the letter is a game changer for new selective licensing proposals. It is interesting that the minister proposes to make selective licensing easier to introduce when applied to smaller areas.

Mark Alexander

17:31 PM, 12th March 2015
About 4 years ago

Reply to the comment left by "John Daley" at "12/03/2015 - 15:21":

I could never really understand why blanket licensing was allowed in the first place John, can you explain it to me from your perspective please?
.

Mandy Thomson

9:41 AM, 16th March 2015
About 4 years ago

It's just been announced on the news today that Croydon Council are rushing their scheme through ahead of the new legislation on 1st April.

They're discussing it this evening at a cabinet meeting, starting at 6:30pm at The Town Hall, Katharine Street, Croydon CR0 1NX.

John Daley

11:48 AM, 17th March 2015
About 4 years ago

Hi Mark,

The old tests for selective licensing were lack of demand and ASB linked to high density of PRS occupation.

So in applying that to the real world I think that each LA area is different. In rural or very sub urban areas it would seem that it would be a challenge to make a case that ASB and PRS tenure could occur at a high density across the LA area.

I think that changes as you move into metropolitan areas where you might have an LA which has a problem with ASB that is property related and a high density of PRS occupation spread across the area. Whilst I don't know the borough well I think Newham might be a good example because there is a fairly even spread of rental values without peaks and troughs ( If I have done Newham any disservice I apologise). Therefore a borough wide designation is justified.

Contrast this with Southwark where there is an enormous variation in rental values and the incidence of property related ASB. As part of our licensing case we identify ASB hotspots, therefore there must also be cold spots too where ASB is less than the average. The Housing Act requires us to demonstrate a link between ASB incidence and PRS density.

We have taken that a little further and discounted areas where there is high PRS density at higher rents, because the ASB incidence is lower. That is why we have proposed a very small area for selective licensing.

Turns out that was a good decision.

Mark Alexander

13:31 PM, 17th March 2015
About 4 years ago

Reply to the comment left by "John Daley" at "17/03/2015 - 11:48":

Hi John

Are you able to reveal the crappy areas of Southwark that all investors and potential homeowners should avoid like the plague due to ASB and the threat of licensing or is this still a secret for now?
.

Mandy Thomson

14:15 PM, 17th March 2015
About 4 years ago

Croydon Council has just introduced their own borough wide licensing scheme, following an emergency meeting yesterday evening, ahead of the newly announced requirement for borough wide schemes to be approved by central government that will effect all new schemes not already implemented by 1st April.

I don't see how the whole London Borough of Croydon could be affected by ASB - PRS related or otherwise. There are a lot of extremely affluent areas in the borough - where renting is expensive, let alone buying. These tend to be in the southern part, but by no means exclusively so. Croydon is also home to Whitgift and Trinity schools.

Even in areas that do have an ASB problem, there are still many, many properties, both rented and owner occupied, that are occupied by hard working, usually well educated people that live in those areas because they want somewhere with good amenities and are willing to compromise on the appeal of their surrounding neighbourhood in exchange for larger or better accommodation. There are many roads in SE London (Croydon included) where you have a mixture of large, well maintained Victorian villas, either occupied by one household or divided into flats, private purpose built flats, as well as HMOs and council flats where the vast majority of the neighbourhood trouble makers live. I lived on one such road for 10 years, have let to two tenants there for the last 4 years, and have family who live on 2 more such streets in nearby areas, so I know what I'm talking about.

John Daley

14:39 PM, 17th March 2015
About 4 years ago

Reply to the comment left by "Mark Alexander" at "17/03/2015 - 13:31":

Mark,

Do you really think that comment takes the debate forward or shows you in a good light ?

Mark Alexander

15:14 PM, 17th March 2015
About 4 years ago

Reply to the comment left by "John Daley" at "17/03/2015 - 14:39":

Hi John

Sorry you don't like my question but I don't like what you are doing and I think that position has been clear between us from the off.

Nevertheless, I have always tried to be respectful and I know that you have reciprocated. We are having this debate regardless of the fact that we both know that the outcome will be that we will agree to disagree. Nevertheless, you are compelled by law to have this debate, I am not.

I'm really not too bothered whether people like what I have to say or not, I think that my question was a fair one and I am perfectly entitled to ask it. On that basis, regardless of how facetious you may consider my question to be, please will you answer it?
.

Mandy Thomson

16:00 PM, 17th March 2015
About 4 years ago

Likewise, I have to wonder what Croydon Council's investment partners, such as Westfield and Hammerson (as part of Croydon Vision 2020), make of their partner's assertion that not only a few troubled areas, but the WHOLE BOROUGH is blighted by anti social behaviour - hardly a ringing endorsement; it would certainly put me off investing in the borough!

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