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King Canute Wins! - Three more licensing schemes fail

King Canute Wins! - Three more licensing schemes fail

There was a time when every major town introduced licensing schemes to control some perceived problem in the private rented sector, Portsmouth introduced Additional Licensing in 2013 to solve ‘problems’ with HMO’s in the south of the city for example.  Now those schemes have come to an end, various councils have tried and failed to introduce follow on or different schemes and many are failing to get the necessary approvals – Brighton, Stoke and Hounslow are the 3 examples we look at here…

To introduce a licensing scheme, you need to identify a problem, collect evidence which clearly articulates the problem and then propose a scheme which is structured in such a way that it is focussed upon and will address that problem. Six or seven years ago, many councils including Portsmouth got away with scant real evidence and flimsy problem definitions, but landlord associations across the country have got wise to the ineffectiveness of such approaches and have been successfully challenging new schemes across the country.

The scheme in Brighton was focussed on 12 wards in the town and meant that any landlord with properties in those wards would have to pay for a licence in order to rent property lawfully. It was due to be introduced last February and went through the whole consultation process and was submitted to the Secretary of State for approval.

iHowz (formerly the Southern Landlords Association), among others, argued that there was little evidence that licensing schemes improve housing standards and that the focus of staff becomes the processing and issue of licences, while prosecutions centre on whether the property is licensed or not, rather than on improving management standards and property. The Secretary of State agreed and refused permission for Brighton to introduce the scheme.

The situation in Stoke was similar. They applied to implement a selective licensing scheme in 14 areas in a bid to drive up housing standards in the private rented sector and to cut anti-social behaviour. The controversial scheme had been opposed by many landlords in Stoke who claimed that it would merely create an additional burden for ‘good’ landlords, while doing little to address the real problems facing the sector. The rental properties would have had to meet certain minimum standards, with the landlords facing fines of up to £20,000 for any properties rented out without a licence.

However, the Ministry of Housing, Communities and Local Government (MHCLG) have refused the city council’s application, saying it did not meet the ‘statutory criteria’.

A local landlord said, “‘What we’ve been saying all along is that the council should be concentrating on enforcement of the existing rules. Selective licensing only punishes the good landlords while doing nothing about the rogue ones.’”

And finally, Hounslow Council has u-turned on plans for a licensing scheme for landlords following representations made by the RLA and Safeagent (formerly the National Approved Letting Scheme).

On 9 July 2019, the council’s cabinet agreed to proceed with plans for an additional licensing scheme. The scheme designation was made on 1 August 2019 and was due to come into force on 1 November 2019. A licensing consultation had been undertaken earlier in the year.

The new borough-wide scheme applied to all Houses in Multiple Occupation (HMOs) occupied by three or more people, with a flat rate application fee of £1,250 per property for up to five years.

The RLA threatened the Council with judicial review on the basis that their licensing consultation was flawed in a number of respects, including:

  • It failed to provide any information upon which the plans for the scheme were being made.
  • No information was provided to prove the ineffective management of Houses of Multiple Occupation for which such schemes are generally used.
  • It failed to outline, as is required by law, how such a licencing scheme would be consistent with the council’s housing strategy and what conclusions the council had reached about potential alternative ways of addressing the problems this scheme was seeking to address.
  • Whilst the consultation proposed that the scheme be adopted across the whole Borough it made reference to applying it across a smaller area without giving respondents to the consultation any information about what this might look like. This gave the clear impression that the Council had made up its mind before the consultation began.
  • Although much of the information about the above was presented to the Council’s cabinet, these papers could not be found on the council’s consultation page for respondents to access.

After raising these concerns, it is understood that the council’s lawyers contacted the RLA to confirm that it will not take forward the decision by the Cabinet to introduce the additional licencing scheme, and will now reconsider the way forward, including carrying out a new consultation.

So whilst standing up against the waves of new regulation might give King Canute a sense of deja vue, these examples do show that perhaps, the tide has turned and common sense may yet prevail.  (And did you know that iit is believed that King Canute's famous attempt to stop the incoming tide happened at Bosham? We have seen cars parked there by some of his descendants who have gone in for a pub lunch and come out to a nasty surprise)

Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.

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