Selective licensing and the NLA: What is selective licensing?

Selective licensing and the NLA: What is selective licensing?

Selective licensing is a contentious topic for many landlords. We receive a number of queries from our members about why it’s being introduced in their area and what the National Landlords Association’s (NLA) position is.

In a three-part series, Gavin Dick from our Policy Team explains what selective licensing is, why it’s used, and how the NLA represents its members on this topic.

 

What is it?

Licensing in its current form started in England and Wales with the Housing Act 2004, which stemmed from a  Labour Party manifesto pledge ahead of the 1997 General Election. The intention of the incoming Labour Government was to prevent gazumping of homebuyers, but like all pledges in manifestos that get turned into laws, the Act of Parliament soon became a vehicle for many other housing policies.

The Act saw the creation of home information packs (HIPs); the establishment of the decent homes standard; the formation of the legal framework for tenancy deposit protection. Overall it significantly extended regulation in the private rented sector (PRS), principally regarding houses of multiple occupation (HMOs). As part of this, the Act also allowed local authorities to introduce selective licensing schemes.

The aim of this provision was to enable local authorities to address specific concerns in particular pockets of their jurisdictions. Licensing was seen as a tool to enable local authorities to monitor and/or raise standards where there were concerns about the impact of private rented accommodation, or tenants, on the local community.

When this part of the Act originally came into force in 2006, if a local authority wished to introduce selective licensing, they needed to apply to central government for approval. It covered areas with low demand or where significant anti-social behaviour could be demonstrated. A few local authorities proposed schemes, which were introduced, usually in a small area and with a strong evidence base.

 

Localised expansion

In 2010, as one of the last acts of the Labour Government, the then minister, John Healy MP, relinquished the centralised power to decide under the ‘localism’ agenda. Local authorities now had the power to grant approval for selective licensing in areas, for example where there was significant anti-social behaviour or low housing demand, without applying for government consent. Who could be against local people making local decisions?  

This saw an inevitable increase in schemes and, in 2011, the London Borough of Newham proposed a significant scheme covering the majority of the borough, expanding on their existing scheme in Little Ilford. This widespread approach by Newham saw a slew of other local authorities follow their lead, although none were  as comprehensive or as successful in their execution.

 

Licensing today

In 2015, in response to concerns that selective licensing was being used beyond its intended purpose,  the Coalition Government reviewed the provisions, issuing new guidance to local authorities in April 2015. During the review, the NLA lobbied the Government repeatedly to prevent local authorities from introducing schemes without an evidence base. The Government kept the decision making at a local level, but introduced more criteria for councils seeking to introduce selective licensing.  

A scheme can now be introduced, following a public consultation, if it satisfies one or more of the following conditions:

  •         low housing demand (or is likely to become such an area)
  •         a significant and persistent problem caused by anti-social behaviour
  •         poor property conditions
  •         high levels of migration
  •         high level of deprivation
  •         high levels of crime.

However, if the local authority wants to introduce the scheme to more than 20 percent of the PRS in a specific area, it must be approved by the Ministry of Housing, Communities and Local Government.

 

The next post in this series will look at why local authorities use selective licensing.

 

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7 thoughts on “Selective licensing and the NLA: What is selective licensing?

  1. LICENCING is an income generator nothing else. Why selective?. Given any council ward there good and bad areas, the improvement of which not is the responsibility of the PRS. Poor quality dwellings were dealt with before by tenants complaining to LA, who orders corrections if necessary. Anti-social behavour is a police matter who have powers to close premises. Landlords who even suggest to tenants that they behaviour should be modified could received a crude venacular reply, and a rent stoppage. Which involving a expensive recovery and refurbishment costs, Even the lawyers trot out the excuse that some costs are controlled by the out of date, Lord Chancellor’s Scale
    Offering a dwelling for rent is no different to selling a bag of sweets or a Jumbo-Jet, it is an invitation to treat. If the parties cannot agree they walk away. The reasons for not reaching an agreement are private, encompassed in one word “NO”. Parading a host of prejudices,personal views,political statements etc is irrelevent. These just give other people and parties an oppurtunity to get involved.

    Local Authorities could compete, forcing the PRS to lower their prices! Low cost housing is available. Such as shipping containers, which are used as high end accomodation, called Snooze boxes. The military have similar schemes, decorated with brickwork etc. The few Pre-fabs left are now “listed”. which in their time were fabulous.

  2. ‘This widespread approach by Newham saw a slew of other local authorities follow their lead, although none were as comprehensive or as successful in their execution.’

    I DONT UNDERSTAND WHAT THAT MEANS…ARE YOU SAYING ITS A GREAT SUCCESS AS LBN PROPAGANDA MACHINE WOULD HAVE YOU BELIEVE! AS AN LBN LANDLORD IT HAS DONE NOTHING OTHER THAN RAISE COSTS.

    1. Hi Joe, the LBN are considered an example of best practice by the Government and other local authorities when it comes to selective licensing. In their rented property licensing consultation proposal in 2016, they state that since launching the scheme there have been: 2170 notices to improve housing conditions; 908 prosecutions, 368 simple cautions, and 368 operations with partners like the police. You can read their consultation in full at https://www.newham.gov.uk/Documents/Housing/RentedPropertyLicensingProposalConsultation.pdf

      1. thanks for reply, but its falling into the same trap that LB Newham data isn’t independent or verifiable. for instance my FOI about enforcement of beds in sheds under the licensing regime revealed a big fat zero preosecutions!! turns out planning legislation is used instead. this confirms what was argued all along that councils have sufficient existing powers. the result of the FOI is important as the LBN propaganda machine mainly featured beds in sheds to justify (whole borough) licensing!!

        furthermore i reported a beds in sheds address to lbn complete with photos. however when i chased up lbn it turned out that no enforcement action had been taken!! so much for a ‘…very robust approach…’!!

        i think the lbn licensing is motivated by robin wales dislike of landlords (now gone at last!), and is an ideological attack on capitalism.

        another example was the propaganda put out by lbn as part of their case for more licensing was that hmrc data shows many lbn landlords dont declare tax whereas hmrc denied this and it was fake news: this is my post on property tribes 26/08/17:

        There has been a lot of publicity generated by LBN about how landlords evade tax (thanks to the ‘ground breaking’ haha LBN licensing scheme!).

        This was a recent thread:

        The REAL reason for Government attacks on LLs where LBN exposure of non-tax paying landlords was discussed.

        As a newham LL I unfortunately know how LBN operate (not that I have been prosecuted or anything like that).

        I posted that LBN’s statistics (lies, damn lies and stats) can’t be trusted…seems from this story in the independent confirms that LBN may well have been telling porkies:

        London landlords ‘avoiding £200m in tax’ by not declaring income

        The key bit buried near the end of the story is:

        ‘HMRC said it did not recognise the 13,000 figure.’

        Surely the Independent headline should really be LBN caught lying!

        I don’t believe its an exaggeration to say that LBN are waging a propaganda war against ALL landlords, wherever they are!

        no wonder we are so reviled and treated unfairly…

        Most people think local authorities don’t tell deliberate lies and are essentially honest. This is not unreasonable but is naive IMO.

        i would recommend that lbn propaganda is treated with great sceptism.

        joe

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