Kerching! Birmingham City Council Decides to Cash-in on Landlords

Kerching! Birmingham City Council Decides to Cash-in on Landlords

15:08 PM, 25th October 2021, About a month ago 8

Text Size

Here we go again as yet another local authority, this time Birmingham City Council (BCC), decides to get on the gravy train which is selective licensing, with what is being touted as the largest selective licensing scheme ever attempted.

As always, this is being brought in under the misnomer of ‘improving housing quality for local residents’.

“The new scheme, if approved, would ensure that all privately rented properties in the designated area are of a satisfactory standard… would ensure landlords operating illegally are identified and enable those properties to be targeted for inspection … [and] would also provide a level playing field for good landlords and reduce the risk of exploitation of tenants.” Trots out the council in the usual hyperbole put into press releases by every council PR department.

In reality, as all Landlords now know, it will do very little to improve housing quality, but an awful lot to increase council revenues because, in fact, this is a tax on landlords.

Not only is it a tax, but it allows the council to introduce a lot of licence conditions that any landlord failing to comply with commit a criminal offence.

These licence conditions, and therefore the criminal offences, are being created by relatively junior council staff.

Do you remember voting to allow laws to be created by unelected junior housing officers? No, neither do I. But here we have it and if you as a landlord are crazy enough to accept their licence conditions without a fight and proper legal representation against your draft licence then you are walking zombie-style into their trap.

The trap; also a revenue collection scheme, is to be able to issue you with massive civil penalty fines and for breaking the “criminal laws” created through the back door by these unelected housing officers.

The fee that Birmingham City Council will charge you to impose these laws upon you will be £670 per property. That’s the licence fee for ‘up to’ 5 years.

It’s split into £375 for the application and processing and £295 for enforcement against you.

Words put into the mouth of councillor Shabrana Hussain, cabinet member for homes and neighbourhoods, by the City PR department, included this indication of the true purpose: “This scheme will contribute to the City Council’s priority of introducing more enforcement and licensing within the private rented sector.”

There you are.  Her ‘actual’ words in the press release.  And enforcement is where they make the real money.

There are hundreds of examples of councils fining landlords between around £3,000 and £20,000 for failing to apply for a selective licence. This is essentially a fine for tax avoidance since licensing is essentially a property tax.

Now, let’s do a little sum.  It is highly noticeable in the selective licensing report to council and consultation documents that they don’t mention the actual number of properties and the revenue to be generated. Everything is in percentages to make it difficult for us to know.

We did find this hidden away in the detail:  The total number of residential properties in Birmingham across all tenures is estimated to be 468,048, of which the Private Rental Sector is now estimated at 104,941 properties, which include 6121 HMOs. So that’s 98,800 which are not HMOs.  Let’s call it 100,000 to make the maths easy.

We can see that  BCC is proposing to make 28 out of 69 wards subject to selective licensing tax – so that’s 40% of wards and let’s assume roughly 40% of the 100,000 properties.

So there we have the licence tax: 40,000 properties at £ 670. A cool £26.8 million. Kerching!

And then they say that they expect only 75% of landlords to apply. So they will be aiming to fine the other 25% for avoiding the selective licensing tax.

So that’s 10,000 landlords and let’s say the average fine for non-licensing is £6,000 even though it’s often up to  £20,000. That’s another £60 million. Kerching again! And in addition to that, they will be spending a good chunk of your money on recruiting the new breed of bullying, arrogant and frankly evil ‘Housing Enforcement Officers’ who are indoctrinated that ALL landlords are criminals and must be punished.

Their job is to assess strip your properties by imposing massive Civil Penalty Fines on landlords not only for licence evasion, but they’ll then go on to find ‘compliance failures’ in your properties for which they can issue fines of up to £30,000 each.

And then, in the public-spirited manner of the horrible nasty people who enjoy these enforcement roles, they will advise the tenants of any unlicensed property to make a Rent Repayment Order to make you pay back 12 months’ rent to your tenants, so they will have lived free for a year at your expense.

BCC states they expect to enforce against 1,000 landlords a year. Experience shows that councils don’t target the worst landlords. They look into your financial circumstances and target the ones most likely to be able to be bullied into paying to prop up their coffers.

Let’s say they aim for £30,000 in civil penalties (just one or two compliance breaches) so that’s another £30 million.

And there you have it, ladies and gentlemen. Selective Licensing is going to bring in at least £120 million for the poor impoverished Birmingham City Council. Except. Like every other council, they’ve forgotten to mention that in any of their documents and press releases.

And they also state they expect to improve 1,000 properties a year by their helpful scheme of fining Landlords out of existence.

1,000 out of 40,000 properties, that’s not much of an impact for all of this revenue generation, is it?

If you are a Birmingham Landlord, fight for your lives and your business by completing the consultation document here https://www.birminghambeheard.org.uk/place/selective-licensing-consultation/

Oddly that’s not the link in their press release which takes you to a general page where the selective licensing ‘consultation’ is the 16th entry on the second page.

If I was cynical, which god forbid, I would say that this was a deliberate attempt to stop people being able to find it. What a good job we can have total faith in councils to do the right thing for the electorate whom they are supposed to serve. Not.

Any landlord needing assistance to avoid enforcement action by ensuring that their property is fully compliant with the hundreds of applicable laws and regulations, assistance with applying for licenses and fighting nonsensical criminal-liability conditions in draft licenses and in defending against unreasonable council enforcement action should seek urgent professional assistance from a firm like Landlord Licensing & Defence.



Comments

by DSR

8:46 AM, 26th October 2021, About a month ago

Well I shall certainly feeding back my comments! My first question though is WHAT ARE THE NRLA GOING TO DO ABOUT THIS? Are they planning to represent the decent LL's out there?????

by Monty Bodkin

21:40 PM, 26th October 2021, About a month ago

Reply to the comment left by DSR at 26/10/2021 - 08:46
"WHAT ARE THE NRLA GOING TO DO ABOUT THIS? Are they planning to represent the decent LL's out there?????"

This is what the RLA did about it in Liverpool;

https://liverpoolexpress.co.uk/co-regulation-partnership-with-private-rented-sector-is-a-first/

I've not been a member since.

by David Price

14:55 PM, 27th October 2021, About a month ago

I wonder why this country is fining and criminalising people who are providing a much needed product?

by Lesley Thomas

16:36 PM, 27th October 2021, About a month ago

We knew this was coming. In any event, we have already started selling our portfolio. We cannot see the attraction of being 24/7, adult babysitter's when the councils and housing associations get away with murder. Mmmm - funny how the TV programs and complaints are always about private landlords. Just visited one of our properties today where the tenants have just done a 'moonlight' in rent arrears. You know... the usual reason to escape under the cover of darkness. They've left so much stuff and rubbish. Probably, two-three skips. You cannot even walk down the garden with the weeds over 6ft high. It looks like the place has never, ever been cleaned. Glad to see the back of them and all our BTL houses. Get out whilst the house prices and demand is high!

by Blodwyn

18:16 PM, 27th October 2021, About a month ago

Unnecessary, oppressive, confiscatory are words the spring to mind. I have completed the Questionnaire accordingly and suggest that fellow members do so as well, as individuals, whether or not you have any connection with Birmingham (that is an early query). .

by Blodwyn

18:19 PM, 27th October 2021, About a month ago

Reply to the comment left by David Price at 27/10/2021 - 14:55
The disagreeable thought occurs to me that Good Landlords have entered a great big huge tank through what is now a one-way turnstile. You pay to get out!

by Glenn

19:57 PM, 27th October 2021, About a month ago

Shocking, actual words from the survey:
Council believes selective licensing can help contribute to its objectives for reducing crime, for example: by leading to a reduction in incidents of environmental crime (by ensuring appropriate waste disposal facilities at the property), reducing home burglary rates (by ensuring entry points are secure), promoting the welfare and safety of occupants in privately rented homes (by ensuring the landlord is ‘fit and proper’), preventing illegal evictions, and promoting better information gathering to reduce financial crime such as fraud. It also believes selective licensing can help address some of the elements that cause deprivation, by improving housing standards and the external physical environment (e.g. by requiring landlords to ensure their properties are in a good state of repair, adequately heated and not overcrowded etc).

by Mick Roberts

7:42 AM, 28th October 2021, About a month ago

More homeless coming then.

I know nothing of Birmingham, but if it's like Nottingham, u Landlords that can stay in business, expect a lot of hassle & paperwork & outgoings, but once the initial pain gone through, also expect if u have Benefit tenants, for no voids (if u was having any before) as tenants can't move any more, as Landlords tighten the 'I'll let u have this house' limit.

Expect rents to rocket, so if u do get one come up, u can charge the new tenant whatever u like-Supply & demand. And u may have to give some existing good tenants a rent increase to pay for the Licensing fees & associated costs.

It most certainly isn't a level playing field for good landlords, as the not so good landlords don't pay it.

Amazing how Nottingham's fee is now £890 & Birmingham's £670-Where do they pluck these figures from.....

Don't forget if Birmingham have it, Nottingham has clause that when they come to inspect, if they find something wrong, they charge u £350 for the privilege. That's without the £30,000 Civil Penalty u mention. So if u was trying to look after your tenant before with cheap rent, u sure as can't help em out now, as u need proper rent to pay all 2021's punitive Anti-Landlord Anti-Tenant outgoings.

These are the figures from approximately 6 months ago, Just under 3 years after Nottingham's Selective Licensing Tenant tax had been running.

Nottingham Selective Licensing has inspected 600 houses in 3 years with 76 staff. 1 man in a MOT station could have inspected 6240 cars in that time.

Nottingham Selective Licensing has just published their mid scheme review.

They inspecting on average 3 houses per year per member of staff. Most businesses would go bust at that rate.

So 1 staff is doing 1 inspection every 4 months. How is that improving houses.

270 houses improved.
22000 applications at an average of let's say £700 per license.
£15.5 million from licence payers from tenants rent increases to fix 270 houses. That's approximately £57,000 the Council has took off Nottingham tenants to improve each house. When some of the improvements may have actually cost £50.
Had licensing not been introduced the Council would still have improved roughly 270 houses (which sounds low anyway).

600 houses inspected in 3 years with 76 staff. 1 man in an MOT station could have inspected 6240 cars in that time.
76 men could have inspected 474,000 cars in that time.

https://www.nottinghamcity.gov.uk/media/3371933/selective-licensing-mid-scheme-review.pdf?fbclid=IwAR3j6UMPZx8D3zDzZKhwFOTPSU-jbsM9xioHM2uNaM0-OrdMW0305QcVHDc

My words similar to yours on them fining people for the Council inventing something that they can then fine for:

My words below I've sent to the National Audit office who I've now got to start an investigation into Nottingham Council to see if waste of money.
And Audit office only start this very serious thing if it looks like a waste of money which they have indicated from my evidence it is.
We supposed to be making houses better for tenants, not fining Landlords a years rent for no license. When the house they find has no faults.

They bring the Licenses in like making up something, then start fining people for not paying the trumped up charge-Whereas before they were breaking no rules as doing nothing wrong.

Interesting, all misdemeanours are just for failing to License. Look at the Financial Penalties mounting up. Who keeps this money?
And don't look like finding a lot of houses wrong out of now 24,000 fees. Approx £14 million is a lot of money that tenants are getting worse deal in return.

https://www.nottinghamcity.gov.uk/housingoffences


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

BECOME A MEMBER