Selective Licensing overview

Introduction

The Housing Act 2004 gives councils the power to require residential landlords to obtain a licence in order to let property to tenants within a designated area. Its aim is to improve the quality of life for all in the area by ensuring a consistent high standard of management of private rented homes which thus make a positive contribution to the area.

The designated area has a high level of private rented housing, the criteria to be considered as ‘high level’ is for an area to have above 19% private rented housing. If this level is reached, Selective Licensing can be introduced if an area 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 levels of deprivation
  • High levels of crime 

The full proposal and evidence documents are available on the supporting documents page.

Background

Peterborough is an ambitious city with exciting plans for growth. It’s the UK’s second fastest growing city and is transforming quickly with a £1billion regeneration programme.

But growing populations can mean additional challenges such as anti-social behaviour and reported crime, and in Peterborough there are also more properties in an overcrowded, poor and dangerous condition. Overcrowding leads to more excessive waste and sometimes affects the health of the occupants.

In order to help reduce these problems, the council has introduced Selective Licensing of private landlords in several areas of the city. The council has considered other remedies, but considers Selective Licensing provides the best chance of improving the management and condition of properties in the private rented sector, which will in turn reduce crime and anti-social behaviour.

How it works

All private landlords with residential property within the proposed area will need to apply for a licence for each property. In order to become a licence holder they must be a fit and proper person. This means a landlord has to meet a certain standard before they can legally rent out a property. 

Benefits

Councils can introduce Selective Licensing where it would benefit the local community and it would ensure that all private rented property within the designated area is managed to a satisfactory standard.

The added benefits we expect to see are: 

  • A higher standard of management
  • Better housing
  • An improved image and perception of the area
  • Greater ability of landlords to deal with rogue tenants
  • A reduction in crime and anti-social behaviour
  • Better waste management
  • More settled communities
  • A mixed and vibrant community that people enjoy living in 

The council acknowledges that many landlords provide decent well-managed and well maintained accommodation, which does not cause any problems for the local community. There are, however, also properties that are poorly managed, suffer from overcrowding, or provide unsafe accommodation. These properties have a negative effect on their local area.

Fees

For licence applications made between 1 September 2016 and 30 November 2016 only - the following fees apply:

£50 - if you are a landlord who is an accredited member of:

  • National Landlords Association (NLA)
  • Residential Landlords Association (RLAAS)

You must maintain your annual membership and complete the relevant CPD (continued professional development) each year otherwise the full fee (£600/£750) will become payable at the point within your licence period where your membership expires. 

£50 - if your property is fully managed by an agent who is accredited with one of the following:

  • Association of Residential Letting Agents (ARLA)
  • National Approved Letting Scheme (NALS)
  • UK Association of Letting Agents (UKALA)
  • Royal Institution of Chartered Surveyors (RICS)

You must ensure your property is continually managed by an accredited agent throughout the period of your licence otherwise the full fee (£600/£750) will become payable at the point within your licence period were your membership expires.

£600 - for a single let property if the landlord or agent does not have the accreditation mentioned above.

£750 - for a House in Multiple Occupation (HMO). This is a house let to three of more persons forming two or more households. Note that some HMOs already require a licence.

For licence applications from 1 December 2016 onwards:

£900 -  for all properties whether they are single let properties or houses in multiple occupation.

£600* - for a single let.

£750* - for a House in Multiple Occupation (HMO). This is a house let to three of more persons forming two or more households. Note that some HMOs already require a licence.

*This fee would only be available to landlords who can evidence their property is being let for the first time.

Licensing offences

It is an offence to rent out or manage a property within a designated Selective Licensing area without a licence. Renting a property without a licence could result in a civil penalty of up to £30,000 being imposed or prosecution in the Magistrates Court and an unlimited fine.

This could also mean that the person convicted is considered not to be a fit and proper person to hold a licence, which means that they would be unable to hold a licence  anywhere in England, nor could they be a manager. Subsequent convictions could result in the responsible persons receiving a banning order preventing them from renting property across the country.

It is also possible for a rent repayment order to be made against the convicted person which would require the repayment of all rents received from people living in the property during the period it was being used as an unlicensed HMO, to a maximum of 12 months. These orders could apply to any housing benefit payments made by the local authority as well as any amount paid by the tenants. 

Supportive measures for landlords

The council wants to sustain long-term improvements in the quality of private rented sector accommodation within the proposed Selective Licensing scheme’s boundaries, and understands the need to ensure a balance between the rights and responsibilities of landlords and their tenants. 

As a result, the council and its partners have either introduced or are exploring the following, additional measures: 

  • The introduction of a Public Space Protection Order (in accordance with Part 4 of the Anti-Social Behaviour Crime and Policing Act 2014) within the designated areas. This will focus enforcement and education activity on such things as street drinking, litter and waste management, and other aspects of anti-social behaviour that are largely the responsibility of tenants
  • The re-structuring of policing and partner and enforcement teams to ensure those areas with the biggest challenges receive the most appropriate targeted resource. These teams will work within the regulatory framework to support landlords who seek their assistance with tenants who commit damage, anti-social behaviour and engage in problematic behaviour
  • Improved education and effective support for landlords in the management of tenants who cause anti-social behaviour including supporting landlords through the eviction process should it become necessary to seek possession
  • A review of the current Cumulative Impact Policy introduced under The Licensing Act 2003 that addresses the growth of licensed premises in the Millfield, New England area of the city

Alternative actions undertaken and considered

  • In 2013 The National Landlords Association launched their Landlord Accreditation Scheme in Peterborough in conjunction with Peterborough City Council. The council’s housing enforcement team promoted accreditation to all landlords they had have dealings with and sent publicity material with letters and notices. Since February 2013 only 13 new landlords have become accredited.
  • Existing powers available to the council to deal with residents’ complaints are largely reactive, with officers responding to tenants’ complaints. Many tenants are discouraged from complaining, through fear of retaliatory eviction or because their personal circumstances make it difficult for them to find alternative accommodation. Although enforcement activity has been successful in remedying problems in individual dwellings it is not felt to have raised the standard of private sector dwellings generally. 

Enforcement

The council has a Housing Enforcement team which utilises a wide range of tools to tackle poor property condition, inadequate tenancy management and improve conditions in the private rented sector.

These tools include: 

  • Mandatory HMO Licensing
  • Additional HMO Licensing
  • Landlord Accreditation
  • Empty Property Enforcement
  • Housing Standards – Housing Health and Safety Rating System (HHSRS)
  • EPC - Energy Performance of Buildings (Certificates and Inspections) England and Wales) Regulations 2012
  • The Smoke and Carbon Monoxide Alarm (England) Regulations 2015
  • Public Space Protection Orders *under consultation 

Peterborough is fully utilising the suite of tools introduced by the Housing Act 2004, one being the Housing Health and Safety Rating System (HHSRS). As a dual approach with Selective Licensing, these powers will address not only management standards but also property conditions and unscrupulous practices within the private rented sector.

Enforcing of housing standards law

Experience shows that poor regulation of private rented housing results in a lowering of standards, often to the point where the safety of residents is at risk. The problem has continued to grow and our response has had to increase, accordingly. 

Since 2009 the council has stepped up enforcement activity against rogue and criminal landlords working closely on strategies with other agencies, including the police, fire brigade, HMRC, and immigration enforcement. Housing staff have worked with the safer Peterborough partnership, council tax and building control to secure effective interventions.

Despite the above, and the approaches set out in relation to alcohol licensing, restructuring of partnership teams, and the use of anti-social behaviour legislation, the problems still persist.

As part of a coordinated approach, Selective Licensing will compel landlords to maintain good standards and raise the profile of problem properties that have gone unnoticed previously. Through the increased awareness amongst the community and across agencies, Selective Licensing will become a valuable mechanism for identifying and dealing with bad practice amongst private landlords and assist landlords to meet their obligations for tackling anti-social behaviour caused by tenants.

A comprehensive database is being developed of the private rented sector within Peterborough and it is envisaged that by introducing Selective Licensing in the proposed area, it will strengthen this system.