Letting agents are set to see an increase in selective licensing schemes after the Government revealed yesterday that councils will no longer have to ask the Secretary of State for permission to introduced one.

Currently, councils are required to seek the central Government approval for a new or repeat scheme if it covers more than 20% of their geographical area or affects more than 20% of privately rented homes in the area, a rule that has been in force since April 2015.

But from December 23^rd 2024 this requirement will be withdrawn, new guidance from the Ministry of Housing, Communities and Local Government shows.

Housing minister Matthew Pennycook hinted in July that this might happen, saying central approval of schemes was ‘under review’.

Devolution drive

The decision is understood to be part of Labour’s ‘devolution drive’ although some Whitehall strings will remain and local housing authority must still satisfy all statutory requirements contained in Part 3 of the Housing Act 2004.

These are that a selective licensing scheme can only be introduced if there are problems with low housing demand or significant and persistent problems with anti-social behaviour linked to the private rented homes in that area.

The new guidance adds that: “In addition, local authorities will be expected to consult for a period of at least 10 weeks on the proposed designation”.

Also, local mayors must be involved in decision making, and councils must also regularly update the ministry on their scheme’s progress.

Reaction

Chris Norris, Policy Director for the National Residential Landlords Association.

“It makes no sense that whilst planning to create a national database of private landlords, the Government now wants to make it easier for councils to license landlords as well,” he says.

“Ministers must clarify how they plan to prevent the two schemes from duplicating each other. A failure to do so risks them becoming nothing more than cash cows.

“The Government’s plans will remove important safeguards against misuse of council licensing powers. It absolves ministers of any responsibility and will give local authorities free rein to blanket entire towns with unnecessary and costly schemes.

“Data from 2021 to 2023 shows that seven of the top ten most proactive councils issuing improvement notices to private sector landlords did not have selective licensing schemes in place. This clearly demonstrates that licensing schemes do not automatically lead to higher levels of enforcement by councils.”

Lucy Tiller, Public and Policy Affairs Manager at the Renters Reform Coalition

“This is good news – we’ve long been calling for the government to make it easier for councils to extend and set up landlord licensing schemes, which are an important line of defence for renters,” she says.

“Private renting is different everywhere, so it’s important councils are empowered to tackle local problems and drive up standards. We look forward to seeing more detail about these changes.”

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