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0:01 AM, 24th January 2023, About A year ago 34
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A new selecting licensing scheme is to go to the government for approval – but councillors don’t want landlords to add the licensing fee to a tenant’s rent.
That’s the call from Nottingham City Council which says it ‘does not believe landlords will need to increase tenants’ rent to cover the cost of a licence application’.
Councillors say the licence should be factored into a landlord’s business plan and any previous rent rises should cover the fee.
The scheme is set to begin in August 2023 which would, the council says, give landlords time to plan.
However, one of the city’s biggest landlords says that tenants are aware that they will be paying the cost of the new licence.
Mick Roberts, who is one the city’s largest landlords, told Property118: “All smart tenants know that their rent pays for everything.
“And if landlords are already charging 70% of the market rent to look after long-term tenants, which just about pays for the current outgoings, do the council think he is going carry on charging that cheap rent?
“Even after the council gives that property/tenant an £800+ charge?”
Nottingham’s new selective licensing scheme will mean that landlords must prove their properties meet required standards, the council says.
Coun Toby Neal, the council’s portfolio holder for housing and human resources, said: “People renting privately have a right to expect a decent standard of accommodation.
“Many of the 45,000 plus privately rented properties in the city are well-managed but, as part of the first scheme we still find properties that are to a very poor standard.
“Homes with damp and mould, homes with no smoke alarms or hot water or heating; so there is more work to be done.”
Mr Roberts said: “Toby Neale has never housed anyone in his life and says ‘We can’t see landlords putting rents up’.
“Many of us landlords are 100% putting rents up to pay for this.
“Nottingham Council has created an outgoing on a house that was spick span and had money spent on it.
“That outgoing needs paying for, never mind the laborious unnecessary admin involved.”
He added: “Mr Neal says there are some bad houses – well go get them then, don’t hurt the 80% that have zero problems.
“The council is wrecking low-earning tenants’ lives.”
Mr Roberts continued: “The new licensing scheme starts in August 2023 and, to date, they have managed to make improvements to less than 2% of properties during their current licensing scheme.
“That means that 98% of tenants who will have seen their rents increased will have received nothing in return.
“In fact, money that could have been spent on improvements will have been spent on licensing fees.
“In my opinion, the proposed licensing scheme is a politically motivated attack from a council that cannot be trusted and are either too stupid to realise or simply not bothered about the facts that their unnecessary licensing scheme is going to push up the cost of renting a house in Nottingham higher than it needs to be.”
However, Mr Roberts also says that he won’t put up rents – if he can pay all the licensing fees in one go without spending hundreds of hours filling in paperwork.
He says that the total fee would be £57,000 and he tells the council: “Ring me tomorrow, I’ll pay your £57,000 and I PROMISE to give zero tenants a rent increase if that is ALL I have to do.
“No paperwork. No form filling in. No inspections. No hundreds of hours sending you documents and forms.”
He added: “This is for your sake, not mine.
“Some of you councillors are aware I wish to sell many of my houses but can’t because licensing has stopped tenants from moving.
“And most of my tenants are aware they are paying far too cheap a rent which doesn’t pay for 2023’s outgoings – which is why all other landlords’ rents have gone up.”
Old Mrs Landlord
8:19 AM, 24th January 2023, About A year ago
If, after years of licensing private landlords and mountains of additional admin. for those landlords, the Council by their own admission still has on their patch houses with no smoke alarms and/or no heating and hot water, then they should be ashamed of themselves and set their own house in order before embarking on a further licensing scheme. They are in effect admitting that licensing doesn't work since it has not achieved the purpose for which ir was (ostensibly) set up. If it costs them over £800 to issue a licence and check that a property is compliant, councillors don't have to be Einstein to realise that it will cost the landlord a far greater sum to actually do all the works and maintain the house in that condition. The landlords are facing rises in both mortgage interest rates and labour and materials costs, yet they are expected to keep rents the same. Does the Council's literature include directions to the nearest money tree?
TheMaluka
11:30 AM, 24th January 2023, About A year ago
Reply to the comment left by Old Mrs Landlord at 24/01/2023 - 08:19
Information on the loction of the money tree can be obtained from any member of the cabinet.
Mike
11:37 AM, 24th January 2023, About A year ago
From which Planet are these Nottingham Councillors from? 100% this additional cost will get passed on to tenants, if not straight from when the scheme is introduced but at the next rent rise review, it will get factored in.
About time these idiots knew there is no such thing as a free lunch.
Neither do we landlords believe that this scheme will actually improve anything other than its another excuse to extort money from the renters, indirectly, and blame landlords as they are in the front line. They also want Landlords to do their dirty work and deal with anti-social tenants, whereas it would have been a job of a council or the police to deal with anti-social occupants/tenants.
Craig Stonall
12:03 PM, 24th January 2023, About A year ago
Should call it what it is, the tenant tax.
How they justify this extortionate cost and scheme is beyond me, all the while expanding the areas across the city making their orginal argument on concentration on troubled areas utter nonsense.
Landlords wont absorb all these costs with tenants that choose not to pay rent, court and legal costs, voids, services, refurbs etc without increasing the rent.
Its not rocket science.
Martin Thomas
12:03 PM, 24th January 2023, About A year ago
It is true that all tenants should expect to be able to live in a safe property. The problem with licensing is that Councils see it as a gravy train funded by landlords. It really is ludicrous for Councillors to say rents shouldn't go up.
If you analyse what is actually required for a licensing scheme, it is the following;
1. a database of properties and their owners/managers.
2. an inspection to ensure that the property is safe for the tenant.
3. follow ups where necessary.
As Mick says, most houses are fine, it's the minority that aren't. The cost of 1, 2 and 3 above should be minimal. Landlords shouldn't have to pay for bloated bureaucracies. If the licence was say, £150, then landlords probably wouldn't complain and everyone would be happy. If we were running the system, I bet we could do it for £150 per property!
This is what the NRLA should be focussing on - tying down Council's costs to landlords to remove the profit element.
Luke P
12:06 PM, 24th January 2023, About A year ago
An EPC (including property measurements/dimensions) can be done for £50-75, so why should a few extra checks on GSCs/EICRS etc. cost so bloody much...?
Crouchender
12:27 PM, 24th January 2023, About A year ago
Reply to the comment left by Luke P at 24/01/2023 - 12:06
You only need to read the following report to know Licensing is not working .Only16% of additional HMOs signed up in 5 years of scheme and the council was trigger happy to put £1.2 million worth of penalties on them with a majority being trivial things. Bad LLs obviously stayed well below the radar of any scheme.
The good ones that signed up with good intent got clobbered with extra costs to improve
https://www.royalgreenwich.gov.uk/downloads/file/6028/independent_review_of_the_additional_hmo_licensing_scheme
Robert M
12:39 PM, 24th January 2023, About A year ago
Government, MPs, councils, councillors, tenants, Shelter, Crisis, and everyone else, should realise that EVERY cost incurred by a landlord HAS to be recovered via the rents charged to tenants.
The higher the costs (including admin time) imposed on landlords, the higher the rental charge has to be. It's not rocket science, it's very basic common sense!
Enforcement of property standards can be paid for via the Civil Penalty system, i.e. the fines imposed on landlords for faults found with properties inspected, (the civil penalties go into council coffers), so there is absolutely no justification for selective licensing fees which, as Mick says, penalise the good landlords and ultimately the majority of tenants.
Raz
12:41 PM, 24th January 2023, About A year ago
IF the powers at be REALLY wanted to make renting cheaper for tenants they would bring in an option for a german-style scheme. In Germany you can rent a TOTALLY unfurnished home - basically just the walls, windows and doors and a basic bathroom or shower - no decoration, flooring even often no kitchen. The tenant rents cheap but its up to them to add all fixtures and fittings, do minor building works, decorate etc. When they move out landlord can make them take out everything (even the kitchen if they dont want it!) and make them return the decoration to white walls. Also up to the tenant to pay all bills, do all minor repairs up to around €100 per incident (up to approx 8% of annual rent yearly), and are responsible for many of the legal certifications relating to the internal stuff. If/when the bathroom for example needs doing, landlord can legally put the rent up by up to 11% after its done because they've modernised the property and increased it's value. Our tenants don't realise how good they have it here!
Luke P
13:44 PM, 24th January 2023, About A year ago
Reply to the comment left by Raz at 24/01/2023 - 12:41
Don't forget the CGT breaks after holding for so long (10 years?)...