How Licensing is Changing your Role as a Landlord

How Licensing is Changing your Role as a Landlord

What does a landlord actually do? I know, perhaps a stupid question (and don’t we live in an era full of them), but every once in a while it could be worth asking.

In the simplest terms, a landlord provides the use of a dwelling for an agreed-upon fee. And while the term ‘landlord’ may have its roots in feudal history, nowadays the role has far less to do with protecting begrimed serfs from bandits and much more to do with, well, just letting property to people. Pretty straight-forward, right?

At some point in time this definition seems to have expanded beyond the practice of providing housing. Of course, landlords have a responsibility in ensuring the homes they let are fit and safe for habitation. But, as far as legislators seem to be concerned, they also have a responsibility as law enforcement officials, too.

The Context behind Landlord Licensing

In the past decade, the private rented sector has doubled in size.* More people are renting privately than ever before, and they encompass virtually all groups and household types – from young singles, couples and families. As private accommodation has grown, so too has the number of regulations that govern private lets.

In a bid to reduce criminality in the private rented sector (PRS), the 2004 Housing Act enabled local authorities to introduce landlord licensing, should their area suffer from entrenched problems such as anti-social behaviour, crime or drug use. By doing so, any landlord letting property in the area would then have to pay for a licence or face fines.

In essence, the thinking seems to have been that, if landlords become licensed, they will take greater care and responsibility in deciding who they let property to, and this will in turn help prevent the concentration of crime in residential areas.

But these are issues with Tenants, not Landlords

And here lies the problem. Licensing effectively shifts the burden of responsibility from local authorities to landlords, making them answerable for issues that really have more to do with tenants than the way landlords operate their businesses.

For this reason, it remains to be seen what, if any, impact licensing landlords has upon preventing criminal behaviour. While landlords should be prudent and undertake the appropriate referencing before setting up tenancies, they are not the police, nor should they be. Anti-social behaviour and criminality will affect landlords as much as the rest of the community, after all.

Funding the Schemes

Even so, it would be remiss to mention how, in some instances, licensing be an effective tool in raising standards. The problem is that more often than not the schemes are introduced arbitrarily and by authorities that have neither the resources nor funding to carry out the enforcement needed to make them work.

According to research carried out by the London Liberal Democrats, of the 1453 inspections that were carried out in the London borough of Harrow this year, only 3 resulted in prosecutions. And this is where the inspections have actually taken place. Many cases indicate a lack of enforcement, with boroughs such as Lewisham and Sutton only reporting 45 and 34 inspections over this year, respectively.

Licensing schemes are therefore problematic for two reasons. The first is that they misunderstand the role and capacity of a landlord to prevent criminal behaviour. The second is that they are often introduced by councils that lack the necessary tools to enforce them.

The Alternative

Other than simply a more considerate and careful targeting of schemes, a better alternative to landlord licensing lies in accreditation.

The National Landlords Association (NLA) works with councils across the country to deliver landlord accreditation schemes, providing training and support for those who let property in their areas. As such, the NLA is able to help councils enforce against bad practice with a more targeted approach to improving standards in private accommodation.

By delivering accreditation, local authorities can benefit from a greater supply of good quality accommodation, a reduction in the cost and need for enforcement, and the prevention of rogue operators going under the radar by sharing of information. Ultimately, accreditation helps improve private renting in the area by fostering better relationships between councils, landlords, and their tenants.

*ONS English Housing Survey 2014-15

3 thoughts on “How Licensing is Changing your Role as a Landlord

  1. Interesting “catchy” headline. This could be matched with what do local authorities actually do?. They don’t build houses for rent, They don’t provide Utility Services, Water, Drains,Gas, Electricity,Policing,Public Toilets, Street Cleaning, Recycling etc.. It is all contracted out.
    Why selective licensing ? I have two properties within 150 metres of each other. One is not selected for licensing tax. The other is selected for licensing tax.
    Is the tax because property owners are easy targets?. i.e. they have something to lose. Whereas the anti-social person has minimum assets, that can be found and certainly not selectively taxable.
    Does the Anti-Social person wear a mask & stripped pullover and is forbidden to cross an imaginary line down the street.
    No he/she simply stops such rent as he may be paying, if the landlord dares to even suggest his anti-social behaviour leaves something to be desired.

  2. I think it’s time for us landlords to go ‘on strike!’ I have fifty tenants and have good relationships with all of them. I deal with most problems fairly promptly and we have a good understanding of what makes the world go round.
    It seems the government just has an agenda to point fingers at us as bad people, so it distracts the attention from the fact that they are totally ineffective at providing a solution to the current and pending housing crisis.
    I was taught to think that people in glass house’s should not throw stones.
    So, how about this for an idea; all of us ‘bad’ landlords negotiate a payment holiday with our mortgage companies for 6 months and then give ALL of our tenants notice to quit in two months time.
    The demand against supply would explode and technically rents could increase dramatically. Imagine if you were going to be offered a 10% yield against all of your properties (current average is around 5.5%)
    But the ballsy kicker would be to hold out and say you had nothing to rent, ‘I want an empty house!’
    How long would it take the government to think about it’s policies?

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