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Property Hawk

Landlord Licence Fails

We have frequently expressed opposition to a blanket landlord registration scheme - the ‘so called’ landlord licence.

So far English, Welsh and Northern Irish landlords have managed to evade the pressure from Labour politicians who seem determined to add another pointless bit of form filling and documentation to the rafts of pointless regulation. There drive seems largely to prove some how that they are on the side of tenants and defacqto against rogue landlords.  Only this week Labour’s Jack Dromey called for the introduction of a Landlord Licence.



Rogue landlords

Firstly, I’m against rogue landlords as much as anybody else.  They need a good kicking!  Fortunately, there is plenty of existing legislation to punish bad landlords and penalise them financially. In serious cases they can be even sent to prison. I therefore see no need or justification for a landlord licence. 

My reasons are clear:

1. Letting your property is a right and not a privilage.  It’s like saying you can only vote if you first buy a piece of paper saying you’re a good citizen!
2. A so called ‘landlord licence’ is no measure of competency.  Having one neither proves or disproves you are a good landlord.  In that respect it is useless. It is therefore no use to a tenant in trying to judge the competency of a landlord.
3. A compulsory landlord licence is simply a backdoor levy or tax on landlords and letting property.  All it does is deter individuals from letting and cost landlords money that they are then forced to pass on to tenants.
4. It will create another unwanted bureaucracy to enforce and collect the landlord licence fees.



Landlord Licence fails in Scotland


Anybody who thinks that  landlord registration or a landlord licence is still a good idea should look at the recently introduced landlord licence in Scotland for clues.  A recent damming report by DTZ on the landlord licence reveals after trawling through the pages of consultants ‘guff’ that the extent or lack of extent of its impact. 

Their assessment reveals that:

Landlords have paid £11.2m in fees since the introduction of the Landlord Registration Scheme in Scotland. But the scheme has resulted in only 11 people being reported to the procurator fiscal in the last two years.  Altogether over 200,000 landlords have registered for the scheme (for which the cost of registration is £55 every three years plus an additional £11 for every rental property).

According to responses to questions from Scottish Conservative housing spokesman Alex Johnstone, in total, nearly £18m has been spent on the scheme, including a start-up grant of over £5m from the Scottish Government.

Johnstone says:  

“The scheme was set up to root out rogue landlords but so far it has cost over £400,000 for every landlord who has been refused registration. Also, according to the scheme, since 2006, there are (supposedly) only 40 rogue landlords operating in Scotland, however, many more tenants will have had an altogether more negative experience. This farcical programme, introduced with the best of intentions is failing to deliver - at a tremendous cost to the taxpayer. And responsible people with aspirations to get into the property business are being hit in the pocket because of this inadequate scheme.”

Ways forward

I would tend to agree with David Lawrenson of Letting Focus when he states that the starting point for any scheme to improve the regulation of the letting sector should be based round improving the varied and existing mechanisms

As the old adage goes; why re-invent the wheel?  I’m sure there is a debate to be had over exactly how this could happen.  What I am absolutely sure of is that; a piece of paper called a Landlord Licence will make NO difference to anybody at all.

Now with the benefit of the Scottish example we have the proof.  So why do Labour politicians continue to put it forward as a credible option. 

I call it politics, NOT progress.

Do you have a view then post it below.

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Comments (13)

Failure of Landlords license
Well, every time the Government imposes yet another tax for landlords to pay, like this so called License, we should pass the cost of it and add a 30% administration charge to the tenants. Then the cost of renting will go up and there you go, we pay a £55.00 license and receive a £72.00 increase in rent income. What about that? will the tenants vote for labour next elections?
#1 - Andy LG - 04/05/2013 - 15:56
Failure of Landlords License
I agree with Andy LG's comment above. The country hasn't got anywhere near enough social housing stock so the politicians rely on us responsible private landlords to house the people they can't, but they still want to keep beating us over the head with more and more expensive red tape. It serves no purpose but costs us all money. I let nice, safe, well-maintained 3 and 4 bed family houses, I keep my rents reasonable, I meet all my legal obligations, and I'm a fair and honest landlord. I don't need to be licensed. Landlord licensing is just an expensive waste of time and Labour's attempt to add another back door tax on landlords.
#2 - Stella - 04/05/2013 - 18:49
Landlords License Fee
I agree that this is just another way of Taxing the hard working people of this country. For some reason everyone seems to portray landlords as money grabbing rich individuals. We need to,as a Industry find a way of defending ourselves and change this impression.
I happen to rent properties in Newham and I only with the application fee was £55. And it is also amazing that it is the same boroughs who seem to take action when any opputunity is presented to regulate and collect money from Landlords.
#3 - RVyas - 04/05/2013 - 19:16
Landlord Licencing
The fact that you are all ignoring is that there are some truely awful landlords who give the industry a terrible name - and there's no point in closing your eyes to the problem. They are evil.
HOWEVER, if the cost of implementing a system of penalising the devils is horrendously expensive and inefficient, that throws a different light on the proposals.
Hence I advocate a system of accreditation that is mandatory and managed by the National Landlords Association, or similar. Avoid the government controls and benefit from voluntary regulation by the industry.
#4 - David Dixon - 04/05/2013 - 19:21
Blackpool
£55 every 3 years would be a dream!

http://blog.propertyhawk.co.uk/2011/12/blackpool-rock-landlords.html

£935 per YEAR here for this nonsence.

Can you tell which political party has control of the Council yet?
#5 - Arthur Ockwell - 04/06/2013 - 06:59
Landlord Licencing
David - with sincere respect I think the point you are missing is that the vast majority of UK landlords, who are responsible and conscientious, do not need to be caught up in the net of licensing or regulation at all. Ample provision is already in place to deal with bad landlords under existing legislation (Housing, Landlord & Tenant, Safety, Harrassment etc). Local Authorities already know which properties in their boroughs are privately privately let (by way of C/Tax registration, Housing Benefit claims etc) and they know who and where the landlords are. A far simpler, cheaper and more effective way of identifying the bad landlords would be to use existing specialist council staff (Private Sector Housing Officers, Surveyors & Environmental Health Officers) to inspect all let properties on a relatively frequent basis (including short notice visits). It seems to me that most criticism of landlords relates to poorly maintained/dangerous properties, appliances, fixtures & fittings. Using existing specialist council staff as suggested would very quickly identify poorly maintained properties that pose any threat to tenants' life, health or well-being. Councils now have serious quasi-legal powers including powers to interview under caution, therefore the process of identifying rogue landlords, collecting the necessary evidence and initiating legal proceedings against them (using in-house legal departments) would be much streamlined and, I think, hugely effective. I am a retired local authority Senior Housing Officer, and I believe that if politicians were really more concerned about the quality of private sector housing, as opposed to raising revenue from the rapidly expanding ranks of private landlords, they would use the tools they already have (existing legislation and trained, qualified staff) to deal with the problem.
#6 - Stella - 04/06/2013 - 08:57
Licencing
I feel it is important to ask why Labour would want to go down thins road.

Bureaucracy is in the DNA of Labour politicians, with it they can create pointless jobs for people who then by necessity become Labour supporters. Much of the legislation they implemented during their time in government was with this in mind and is one of the reasons the present government is finding it so difficult to make much needed reforms to public services or deal with the welfare budget.

One thing you can be very sure of, most Labour politicians have no interest in the less fortunate other than as voting fodder.
#7 - Ivan Jacoby - 04/07/2013 - 00:55
selctive licensing
I have read with interest the article and comments on the perofromance of "licensing landlords in Scotland" I have the misfortune of having properties in areas in the UK where councils have deemed landlords "need" to be Selectively Licensed. Having spoken with many other landlords I can't find anyone who thinks this SL scheme is a good idea. I myself think it ranks alongside "HIPPS" as being just about the most ridiculous idea. I was wondering if it might be possible to organise an online petition and present it to government so this idiotic scheme might just be consigned to the dustbin where it belongs.
#8 - james lewis - 04/08/2013 - 14:16
Landlord License
I agree with Stella's comments. I have a propery in Newham which I rent out. I believe I am a fair landlord and keep the property in good order. I didn't agree with the License and thought it was just another way to raise revenue, however with the threat of being fined I applied. There are certain conditions require by the License holder and upon ringing Newham for advice, guidance or better still, a template, I spoke to a gentleman who said he was the Senior Licensing officer. If he hadn't given me a name, I would swear I was speaking to a robot. I got bog standard responses to my question which he keep repeating no matter what I asked him, yet the license states that "it is an offence for a license holder to fail to comply with any condition of a license. As usual its case of "bright" ideas not being thought out properly and when put into action, no one knows the way forward or tries to be helpful to the people to whom they demand must comply.
#9 - Marjorie Jones - 04/10/2013 - 04:07
landlord tax
My Son has 3 houses in Salford and the council ther say it is compulsory and are charging him about £250 for each house. Is it compulsory or not???????????? please
#10 - DEBBIE - 06/07/2013 - 16:37
landlord tax
I have properties in Manchester, where they oprate a Selective Licensing scheme. The scheme is allegedly designed to ensure that landlords keep their properties maintained to a good standard inorder to improve the area and so only applies to certain areas that are deemed in need of improvement. However, in my case, the properties are new apartments within a rennovated mill and the maintenance of the property is the responsibility of a management company, who are very good at collecting the service charge but nt so good at maintaining the property. In my view, it should be the management company that needs the licence, not the dozens of individual landlords who own apartments in the building. The licence costs us all £450, requires a CRB check and last 5 years but not one tenant has asked me if I have a licence. The scheme has done nothing to improve the area and is just another money making scheme for the council. The worst bit for me is if my property was on the other side of the road, it wouldn't be in the SL area and I wouldn't have to pay. Yet another example of Labour's bureaucratic waste and inefficiency. @Debbie I also own an apartment in Salford and as far as I know a licence isn't required for it, but again there could be a selective policy in place meaning the licences are required for certain areas
#11 - Paul - 07/05/2013 - 10:59
landlord licence
I am a landlord in Rotherham South Yorkshire.(labour again)
I am against this licence. Rotherham council are wanting to charge £700per property not per landlord this will cost me£3500. If i have to maintain my property to a v good standard to which i have always done, I will have no other option but to put the rents up or my property will go to rack & ruin.
The council can't look after their own property why should they preach to us. Rotherham council need to get their own slums in order & anti social tenants before they start on private landlords
Maureen
#12 - Maureen Johnson - 01/23/2014 - 15:37
I am furious with the new selective licensing plans that Rotherham council are consulting about. Me, my husband and 2 children live in a 2 bed house that falls within this area, we have been trying to move for 3 years as we desperately need a bigger house due to having boy and a girl. We have just decided that we will rent our property out and buy a new property to get us out of this rut and have discovered that our mortgage lender (natwest) will not give us a buy to let mortgage because of selective licensing.
I now do not know what we will do, we are stuck and everything feels like it's against us. It is not fair that we have to live like this.
#13 - Katie - 01/30/2014 - 21:48
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