Published: 20/03/2023 By Ricky SodhaSelective licensing schemes have become a common feature in the UK rental market in recent years, as local authorities look to improve the quality of housing and crack down on rogue landlords. However, while the aim of these schemes is laudable, there are significant challenges that landlords face when trying to comply with them.
Here at BTC we have been proactive in helping landlords by managing the entire application process on their behalf, providing complete peace of mind ensuring the process is handled swiftly and professionally.
What is Selective LicensingSelective licensing is a regulatory tool that allows local authorities to require landlords to obtain a licence in order to rent out a property. The scheme applies to a particular area or neighbourhood, and landlords are required to meet certain standards in order to obtain the licence.
The Challenges of Selective LicensingOne of the main challenges of selective licensing schemes is the cost. The fees for obtaining a licence can be substantial, and in some cases, landlords are required to pay for a separate licence for each property they own. This can be a significant financial burden, particularly for small landlords who may be operating on a tight budget.
In addition to the cost of obtaining a licence, landlords are also required to meet certain standards in order to be granted a licence. These standards can vary between different local authorities, but they typically include requirements around the condition of the property, the safety of the electrical and gas installations, and the management of the property.
Meeting these standards can be a challenge for some landlords, particularly those who own older properties or who are not familiar with the requirements. Landlords may need to carry out significant upgrades or renovations in order to meet the standards, which can be expensive and time-consuming.
Another challenge of selective licensing schemes is the administrative burden they place on landlords. Landlords are required to complete a detailed application process in order to obtain a licence, which can include providing information about their property, their tenancy agreements, and their management processes.
This can be a time-consuming process, particularly for landlords who own multiple properties. Landlords may also be required to attend training or information sessions in order to be granted a licence, which can further add to the administrative burden.
Perhaps the biggest challenge of selective licensing schemes, however, is the potential for unintended consequences. While the aim of the schemes is to improve the quality of housing and crack down on rogue landlords, there is a risk that they could end up having the opposite effect. For example, some landlords may choose to sell their properties rather than comply with the licensing requirements, leading to a reduction in the supply of rental housing in the area. This could lead to higher rents for tenants and a reduction in choice when it comes to finding a suitable property.
Selective licensing schemes could also have unintended consequences for vulnerable tenants. Landlords who are struggling to meet the licensing requirements may be more likely to evict tenants rather than undertake the necessary upgrades or renovations. This could lead to tenants being forced to move out of their homes, potentially leading to homelessness or other negative outcomes.
How BTC Manages Selective Licensing
When a landlord appoints BTC to manage the process, we visit the property, measure all the rooms, check the smoke, heat and carbon monoxide alarms, fire blankets and fire doors, all of which must be declared on the application.
An online application is made together with the first payment. The council reviews the application and may spot-check the property to ensure the application matches the properties condition.
Once the landlord has declared all the information provided is correct, the council issues the licence and takes the final payment. As the process takes many months, BTC is able to ensure the whole process is concluded satisfactorily without inconveniencing the landlord.
In conclusion, while the aim of selective licensing schemes is laudable, there are significant challenges that landlords face when trying to comply with them. These challenges include the cost of obtaining a licence, the difficulty of meeting the required standards, and the administrative burden they place on landlords. There is also a risk that these schemes could have unintended consequences, such as a reduction in the supply of rental housing and negative outcomes for vulnerable tenants.
As with any regulatory tool, it is important to carefully consider the potential impact of selective licensing schemes and to work with landlords and tenants to find solutions that improve the quality of housing while also supporting the rental market.