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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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