Proposed licensing schemes raise costs and duplication fears

A London council has come under fire for consulting on two new five-year licensing schemes for the private rented sector, scheduled to come into force next year.

Hackney Council claims the schemes will improve housing quality, but they have drawn sharp criticism from Propertymark.

It warns of inflated costs for responsible landlords and potential rent rises for tenants.

The council’s proposals include an Additional HMO Licensing Scheme, covering all houses in multiple occupation not already under mandatory licensing.

It also wants a Selective Licensing scheme targeting all other private rentals in 17 of Hackney’s 21 wards.

Schemes penalise landlords

A spokesperson said: “Hackney Council is consulting on plans to introduce two new five-year licensing schemes in the private rented sector from early 2026, arguing that they will improve standards.

“Propertymark supports the aim of raising housing standards, but we strongly urge Hackney and other local authorities to rethink their approach.”

They added: “A healthy PRS is fundamental to meeting growing housing demand, and under-resourced licensing schemes too often end up penalising good landlords and agents while allowing poor practice to persist.”

Don’t address criminal landlords

While the council insists these measures will improve living conditions, Propertymark argues they could burden compliant landlords while failing to address criminal landlords effectively.

Propertymark has long championed a different path, advocating for education, proportionate enforcement and collaboration with landlords and agents.

Since landlord licensing began in 2006, the organisation has consistently opposed blanket schemes, favouring targeted interventions in high-risk areas.

It proposes to align local licensing schemes with the proposed national landlord’s database, which is proposed under the Renters’ Rights Bill.

That would, it says, streamline regulation and avoid redundant systems.

Steep licensing fee rise

Hackney’s consultation reveals a steep £925 fee per property, a significant jump from the £500 charged in a previous pilot and it’s higher than fees in nearby boroughs like Brent and Lewisham.

Propertymark warns that such costs could drive up rents as landlords pass on expenses, particularly amid rising mortgage rates and the ongoing cost-of-living squeeze.

The organisation’s research suggests smaller landlords might exit the market entirely, shrinking rental options and pushing rents higher for tenants.

Instead of broad licensing, Propertymark urges Hackney to focus resources on wards with notable issues, such as serious housing hazards or anti-social behaviour, as highlighted in the council’s own data.

Incentives for landlords

The organisation also recommends lower fees, discounts for landlords using regulated agents, and incentives for energy-efficient properties, pointing to successful models in Liverpool and Merton.

As the Renters’ Rights Bill progresses, Propertymark says there’s an opportunity for councils to complement rather than duplicate efforts.

Housing Minister Matthew Pennycook has echoed this, suggesting local schemes should align with national reforms.

However, Hackney’s expansive approach risks overlap, Propertymark claims, and potentially wasting resources that could be better spent on targeted enforcement against unscrupulous operators.