Back in April, we wrote about additional and selective licensing and how Medway Council was proposing to extend private sector licensing to all properties in the proposed wards of:
- Chatham Central
- Brompton
- Fort Pitt
- Gillingham North
- Gillingham South
- Luton
- Strood North
- Frindsbury
- Watling
We have now read the outcome of the consultation and the minutes of the cabinet meeting on 4th August, and it is noted that the scheme has been approved, with implementation no less than three months after the decision date.
Interestingly, we had sight of the Medway Council website stating that landlords can apply for a licence from 27th October, but that has since been removed. We don’t doubt that this was an admin error and we will be keeping a close eye on it!
We thought we would include a probably unsurprising chart below, which outlines how a large proportion of landlords, letting or managing agents disagree with the proposals here, and it’s no surprise. The proposal talks about partnering with landlords, but it seems that, from this outcome, landlords have been completely ignored.
The scheme has been rolled out with a view to increasing the quality of housing, but the problem is we struggle to see much benefit for tenants beyond less money in their pockets through higher rents, apart from a hefty fee to upload compliance paperwork (interestingly, the risk of costs being passed on and landlords exiting was stated in the analysis as a likely concern of major impact).
Looking through the risk register, the council simply having operational capacity has been highlighted as the most significant risk, noted as being likely and of critical impact.
For landlords, this will simply be another cost that needs to be covered. We have outlined the costs below, and you will see that for those with multiple properties there is some form of discount.
Ultimately, this is an annual fee of around £168 (£14 per month) per single let property and around £320 (£26 per month) per HMO. The crazy thing is, however, that we very much doubt the council will inspect before issuing, so it will simply be: upload paperwork, checked and approved, then pay your fee.
Having gone into this fairly sceptical, we actually found the evidence from other licensing areas more interesting than expected. There are examples of improved property standards, greater enforcement and reductions in issues such as anti-social behaviour, while the evidence that licensing itself has caused significant rent increases or a mass exodus of landlords is much less convincing.
That doesn’t mean the cost disappears. For landlords, this is another expense at a time when the cost of operating in the PRS continues to increase, and we expect many will factor some or all of it into their rents over time. The bigger question is whether the scheme delivers enough improvement to justify that additional cost.
What we suspect we will see over the next 6 to 12 months is landlords becoming increasingly selective about where they invest their money, particularly where properties require significant additional expenditure to meet licensing requirements.
The real test will come once the scheme is operating. How many properties are actually inspected? How many hazards or non-compliant properties are identified? How much enforcement takes place? And, ultimately, do tenants see a meaningful improvement in the quality of the homes they rent?
We’ll keep you posted with a further bulletin as soon as there is a confirmed application date and link, as well as sharing our experience of supporting the landlords we look after through the process.
We’d be very interested to hear your thoughts on this. The best way to contact us is by emailing info@home-share.co.uk.
