Thousands of landlords in England are facing increasing costs due to selective licensing schemes imposed by local councils, a new survey has revealed.

Cash-strapped councils are charging landlords almost £700 on average for selective licenses, which are mandatory in many areas, with some councils charging hundreds more, Direct Line insurance has gleaned from its own Freedom of Information requests.

The local authorities charging the most include Leicester (£1,290), Newcastle (£900), and Greenwich (£858), while Ashfield District Council (£350), East Staffordshire Borough Council (£507), and North Yorkshire Council (£550) charge the least.

Last year the schemes generated over £20 million in revenue and a further £2.5 million in fines – an increase of 80% for the latter compared to 2022.

And the number of councils introducing schemes is increasing. According to Direct Line around 20% currently have a selective licencing scheme in place, which is up 9.3% from 2023.

Significant penalties

Landlords failing to comply with licensing requirements face significant penalties. Last year, councils in England raised £2.5 million by fining landlords, almost double the previous year’s £1.4 million. Waltham Forest (170) and Middlesborough (128) recorded the highest number of licensing offences.

Sarah Casey, Head of Landlord insurance at Direct Line business insurance says: “It’s important that landlords comply with all appropriate legislation as anyone not doing so could face a hefty fine. Our analysis shows significant regional variations in landlord licensing costs and a growing burden from fines for non-compliance.

“Anyone planning on becoming a landlord, or who already has a property portfolio, should check with their local authority to see if they have a scheme in place.”

Selective licensing schemes were introduced in 2006 to improve standards and the quality of privately rented homes by requiring landlords in areas where they are introduced to obtain a license to rent out a property.