Councils given greater control over private rental selective licensing, NRLA responds

The Housing Act 2004 introduced the potential for what is referred to as selective licensing of private landlords in a local housing authority areas (Part 1 sections 79, 80 and 81). When the Act came into force in April 2006 councils were therefore able to require private rented property in a specified area to have a licence, that is separate from houses in multiple occupation (HMO) which also require mandatory or additional licences but under Part 2 of the Act.

In these areas, a landlord must apply for a licence if they want to rent out a property. This means the council can check whether they are a “fit and proper person”, as well as laying down other requirements concerning the management of the property and health and safety. However Local Authorities were required to obtain confirmation from the Secretary of State before being able to implement such a selective licensing scheme, of any size.

As of 23 December 2024, a new general approval, means that local housing authorities in England are no longer required to obtain confirmation from the Secretary of State before they implement a selective licensing scheme of any size. Local authorities do however still have to satisfy all statutory requirements contained in Part 3 of the Housing Act 2004 as well as those set out in the general approval and Secretary of State retains the right to change the General Approval arrangement in the future.

As such councils are expected to consult for a period of at least 10 weeks on the proposed designation, and requested by the government to include the mayor in the consultation on the proposed designation (where applicable). They are required provide MHCLG with data on the selective licensing scheme(s), at its start and end date or within 12 weeks, and publish outcomes of any selective licensing review(s) undertaken on their website (pursuant to their legal duty to review the operation of schemes under section 84 (3) of the Act).

One or more of the following conditions need to be satisfied for selective licensing designation to be made:

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

The schemes are likely to work in different ways, depending on the councils design but it is likely landlord will be required to provide a valid gas safety certificate, an electrical installation condition report and a copy of the tenancy agreement and evidence of landlord insurance as a minimum. Currently licences last five years and fee can range from between £370 to £1000.

Councils can charge up to £30,000 for offences, or follow up on a rent repayment order, whereby tenants in a property of a convicted landlord can apply for any payments made for up to 12 months to be refunded retrospectively.

For detailed guidance see 'Selective licensing in the private rented sector: a guide for local authorities' updated 16 Dec.

[edit] The National Residential Landlords Association responds to selective licensing plan

In the wake of a government announcement confirming that it will shortly become significantly easier for local authorities to introduce selective licensing schemes, the National Residential Landlords Association (NRLA) has published its response to this news.

As of 23 December, councils will no longer need to seek the consent of the Secretary of State for Housing in the event they wish to create a licensing scheme of any size. This latest announcement follows the publication of the Renters' Rights Bill earlier this year, which pledged to establish a national database of private landlords and tenants.

This news has wide-ranging implications for private landlords across the market, and the NRLA will be updating its members in greater detail in due course. Responding to the Government's plans, Chris Norris, Policy Director for the National Residential Landlords Association, said:

“It makes no sense that whilst planning to create a national database of private landlords, the Government now wants to make it easier for councils to license landlords as well. Ministers must clarify how they plan to prevent the two schemes from duplicating each other. A failure to do so risks them becoming nothing more than cash cows. The Government’s plans will remove important safeguards against misuse of council licensing powers. It absolves ministers of any responsibility and will give local authorities free rein to blanket entire towns with unnecessary and costly schemes. Data from 2021 to 2023 shows that seven of the top ten most proactive councils issuing improvement notices to private sector landlords did not have selective licensing schemes in place. This clearly demonstrates that licensing schemes do not automatically lead to higher levels of enforcement by councils.”

The above section was issued via Press Release by NRLA as 'Landlord licensing plan a costly waste of time and money' in December 2024, the rest of the article is based on information in the 'Selective licensing in the private rented sector: a guide for local authorities' published by UK gov.

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