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Nottingham City Council 5-year Selective Licensing period
A typical family home, under this scheme will see rents impacted by circa £40.00 pcm over a 5-year period. (See table) We have not accounted for other pressures such as landlord tax changes, but believe Selective Licensing will bring higher rents as yields on c3 properties make it difficult for landlords to absorb these extra costs
|£500.00||Garden maintenance over 5 years|
|£450.00||Tenant referencing-£25pp per year|
|£100.00||Drafting and implementing anti-social behaviour management plan|
|£250.00||Installing front & back door thumb turn locks|
|£500.00||Commissioning Inventories with photographs over a 5-year period|
|£150.00||Landlords to undertake formal training once every 3 years|
|£150.00||PAT testing over 5 years|
|£140.00||EICR once every 5 years|
|£355.00||Court possession costs|
In Nottingham we have seen many landlords, particularly housing benefit landlords transfer the management of their properties over to letting agents due to the introduction of Selective Licensing. This has been driven by factors such as lack of confidence, fear of having their licence cancelled and skill set to effectively comply with conditions that come with the scheme.
For example, landlord anxiety and responsibility for dealing with anti-social behaviour and notifying tenants of rent increases to pay for the cost of licensing and agent fees has also been a major driver to appoint agents.
Sadly, since August 1st, 2018 we have seen a significant increase in family homelessness in Nottingham. Each week around 80-100 households present themselves as homeless to Nottingham City Council. In Nottingham a total of 2,415 households were accepted as homeless, or threatened with the immediate prospect of homelessness, and were entitled to help from the council in the last six months of 2018.
This data was published by the Ministry of Housing, Communities of Local Government
Clearly, Selective Licensing has impacted homelessness numbers, as many landlords have served possession notices to deal with a spike in rent arrears created by rents increasing to absorb increasing costs of business.
On a positive point, the introduction of a great initiative from the local landlord accreditation scheme called “Call Before you serve” is helping with stemming the eviction rates in other areas outside Nottingham where Selective Licensing is in operation.
My experiences on the costs and repercussions so far:
I’ve faced extra costs for admin to do the License form as it wasn’t easy. I have 2 offices and 3 screens on my computer, I know what I’m doing and I even struggled, having to employ someone. Letting Agents were charging Landlords £120 per application.
More Section 21’s at over time as tenant can no longer afford the extra rent required for the extra costs from Licensing. Plus Section 21’s for the tenant’s that you know damage stuff, Landlord normally let go, but now can’t let go as we think (although it’s not happened yet) gonna’ get a Licensing inspection at a moments notice and once they see damaged house, gonna’ make us fix it. No way are we fixing for a tenant that we know will damage again things again.
I had this in Oct & Jan two evictions purely because of Licensing. One Housing Aid know very well Miss XXXXX XXXX. Rent increases for the tenants to pay for Licensing when they weren’t even paying the proper rent before, so now evicted.
Letting agent costs as well now as we can no longer cope with the fear of being fined for some due dilligence we may have missed.
Mental Health cost to landlords & tenants.
Landlords having to sell up many more years earlier than planned as Licensing has tipped them over the edge. This is tens of thousands of pounds. Why has a 70 year old Landlord with tenants of 30 years standing, had to go on courses to train? He’s now selling.
Cost to Councils & Govt for the homeless is massive. The biggest losers out of this are the vulnerable tenants who before Licensing may have got a house with no money down. Now no Landlord taking them without deposit rent up front etc. It’s costing them £1700+.
And Nottingham Housing Aid are offering all sorts of sweeteners to Landlords to take tenants on and keep tenants in their homes.
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