Agent warns Selective Licensing will ‘fan the flames of cost-of-living crisis’
North East property entrepreneur and agency owner questions viability of scheme in current climate
Selective Licensing Schemes will fan the flames of the cost-of-living crisis as struggling landlords pass on higher costs to tenants, North East entrepreneur and My Property Box managing director and founder Ben Quaintrell has warned.
Under the Housing Act 2004 local authorities have powers to introduce selective licencing of privately rented homes to address problems in their area. Normally these will be caused by low housing demand or significant anti-social behaviour but can also be brought about by poor property conditions, high levels of migration, high levels of deprivation and high levels of crime.
RAISE STANDARDS
The aim overall is to raise standards but Durham County Council has come under fire after it imposed the scheme on nearly half of the county’s private rented sector.
Some 29,000 properties are now covered by the scheme and at 42% of rented property available is far more than the handful of streets councils elsewhere have designated.
The licence fee is £500 per property for a five-year term, payable in two parts, the first on application and the second when the licence is granted. It is non-transferable if the property is sold to another landlord.
OFFENCE
It’s an offence to let a property within a selective housing area without a licence and any landlord failing to comply faces both prosecution and a fine.
Now Ben Quaintrell, whose firm celebrated it’s 10th anniversary last month, has questioned the viability of the scheme.
He says: “The North East is now more popular than ever when it comes to property investment. We’ve seen real capital growth since the pandemic but now the tables have turned. I contend that this is an unfair mandatory tax on responsible private landlords and that it is unlikely to induce unscrupulous landlords to improve their standards.
It may [even] drive landlords out of areas where there is already a shortage of rented properties.”
“I would also question why Durham County Council has imposed the licensing scheme on such a large proportion of the area’s privately rented housing stock.”
Quaintrell stresses that he is not against initiatives to raise standards but the managing director of the Darlington-based firm adds: “Other councils have successfully implemented these schemes but this seems like overkill. With the cost of living crisis, fuelled by soaring inflation and an energy price cap expected to near £3,000 this October, any additional financial pressure – such as that created by selective licensing – could have a detrimental impact on the health and wellbeing of those in privately rented accommodation.”
In Dorset we have so far successfully stopped the council imposing selective licencing although Council Offers keep threatening to do so. One key issue is that as far as we can see no one has been disqualified or disciplined for breaching any good standard of landlord. The only prosecutions are for not getting a licence and even then councils have found the cost to the tax payer of introducing the selective licence way out weighs the income generated. There has not been more councils brining in licences but the ones that have have continued to expand to try to mitigate their losses.