Now, one of London’s boroughs, Newham, has gone a step further. It’s recently become the first council in the UK to introduce an additional licensing scheme covering all private rented properties. This welcome development is part of an ambitious plan to tackle the serious problem of rogue landlords allowing homes that are unsafe and overcrowded to continue to operate. The council is looking to increase the severity of civil penalties. They’d like the ability to seize properties from the worst repeat offenders.
This local campaign is a hugely impactful step to improving tenant safety. AHT advocates for better housing quality across the borough. Newham’s licensing scheme is designed to discourage landlords from neglecting their responsibilities, ensuring that all rented properties meet basic safety criteria. By implementing these penalties, the council intends to produce a safer community and home life for their renters.
According to the Residential Landlords Association (RLA), 54 councils across England have established such schemes. Dozens of other councils have expressed interest in developing similar initiatives. These initiatives demonstrate the increasing acknowledgement of the necessity of regulatory oversight within the private rental market.
In Gateshead, the average fee for a rental license is £550-£1,000. Bexley does currently charge £690 but has an early bird discount bringing the maximum fee down to £371. The London borough of Waltham Forest has already fixed its application fee at £650. Brighton is taking positive steps to adopt a new licensing system. For matters requiring additional scrutiny by the council, they suggest a general fee of £460, rising to £600 in complicated cases.
Notably, Nottingham is set to launch a licensing scheme that will cover most of the city, affecting more than 30,000 homes. Set to go into effect as of August 1, this program seeks to improve housing quality across the entirety of Nottingham.
A licensing agreements runs for a maximum of five years. The fiscal impacts of these schemes are enormous. Brighton projects its program will bring in £12m-£16m, while Nottingham is forecasting £14m-£23m.
These regulatory measures raise concerns about their potential negative impact on landlords and tenants. Critics argue that some councils may be targeting smaller landlords with fewer tenants rather than focusing solely on those responsible for the most severe infractions. A skeptical reader from across The Guardian’s paywall raised some important questions about the motives behind such through-ticketing schemes.
“It can only be a money-making exercise. How can they possibly justify such an outrageously high charge?” – A Guardian Money reader.
As the RLA’s policy director David Smith pointed out in his testimony, there are some serious pitfalls to watch out for in these licensing efforts.
“Criminal landlords who fail to provide secure and safe accommodation to their tenants will not come forward.” – David Smith, policy director for the RLA.
The introduction of these licensing schemes is indicative of a real sea-change in how local councils are dealing with the rise of private rentals. After all, their main focus should never be tenant protection and housing quality. Questions have remained about the effect on small property owners, and whether such moves can really home in on the worst properties.
As Newham sets an example for other councils, it remains to be seen how effective these licensing schemes will be in achieving their intended goals without inadvertently burdening responsible landlords. The larger conversation between advocates and each of these programs illustrates the difficulty of threading the needle on housing in the nation’s urban core.