Arthur takes a look at the types of landlord licensing schemes enforced by the Government in England.
An increasing number of councils are launching licensing schemes in order to improve standards in the private rented sector. As of 2018 at least 70 councils have introduced schemes that add to the standard mandatory landlord licensing. More and more councils in England lacking a licensing scheme are consulting about bringing one in.
Licensing schemes can be split into three main categories:
- Mandatory licensing:
If you are letting out a large HMO you are likely to need a licence to do so. Formerly, properties over three storeys high that were occupied by five or more unrelated tenants needed a licence. But from April 2018, the scope of mandatory licensing will be extended to include properties with shared bathroom facilities. These changes are subject to a six-month grace period, please see the the National Landlords Association website for further details.
- Additional licensing:
Additional licensing schemes also apply to landlords letting out HMOs. The 2004 Housing Act allows local authorities to apply tougher rules in their area if they believe HMOs aren’t being properly managed or that mandatory licensing doesn’t go far enough.
- Selective licensing:
This can apply to all landlords in an area. Your local council will make you undergo checks to prove you are fit to obtain a licence and you will need to agree to abide by various regulations around property management and tenant safety. Some councils will also require you to sign up to a charter.
Some properties are exempt from selective licensing including:
- Properties licensed as HMOs under the mandatory scheme
- Properties let by local authorities or housing associations
- Holiday lets
- Commercial properties
- Properties subject to a management order
HMO-related licensing breaches can result in fines from £5,000 up to £20,000. For selective schemes your council will set its own penalties, up to a maximum of £30,000 per offence.
If you are a landlord in London you can use the London Property Licensing website londonpropertylicensing.co.uk to find out whether you are in an area covered by a scheme. As there is no countrywide list of schemes, checking with the local council is the safest strategy!
Whether or not you need a licence to be a private landlord in the area you operate in, you’ll find the Arthur rental property management software to be of invaluable assistance for managing your portfolio. With different access levels for owners, agents, contractors and your accountant, you’ll have all the information you need at your fingertips.