landlord licences

Landlord licences: check whether you need to obtain one to operate

Next month, 11 new landlord licensing schemes will come into effect across the country. Landlords who don’t comply with the new requirements could face hefty fines.

For many in the buy-to-let industry, landlord licences can be another cost to factor into their operating outgoings. They don’t apply to everyone, though, so it’s important to be aware of your local requirements.

In April, a record-high 11 new selective and additional licensing schemes will go live across seven local authorities. This has been flagged up by geospatial technology firm Kamma, as it highlights how such schemes are being ramped up.

Landlord licences must currently be obtained for certain property types – namely, large HMOs – as well as in certain areas for any property type being let out. These additional and selective schemes apply to all landlords operating in a designated area, or across a whole authority.

Landlord licences latest

Unfortunately, the schemes can appear complicated for buy-to-let operators, as the rules vary depending where your property is based. Failure to comply and obtain the correct licence can lead to fines of up to £30,000.

According to Kamma, the 11 new schemes will be in the local authorities of Ealing, Luton, Liverpool, Lewisham, Charnwood and Durham. There will also be two schemes in Bristol.

It is the highest number of new schemes ever introduced at one time, says Kamma. Generally, no more than six new licensing schemes are unveiled per month.

Kamma’s CEO, Orla Shields, says: “Kamma is the only company that has developed technology that can automatically monitor the UK’s entire licensing landscape, and individual schemes, and have done so since 2017.

“Our data shows that so far nine new schemes have already started in 2022 and including all the schemes set out to start in April, we are looking at 20 new schemes starting in less than four months.

“There are not only more schemes to look out for, enforcement through fines and Rent Repayment Orders (RROs) are also increasing, so it’s important agents act to protect themselves, their landlord customers, and their tenants.”

Do you need a licence?

Unfortunately, there is no central database to show all schemes to help landlords decide what rules apply to them. Every landlord must look into this with their local authority before letting a property out, and follow the rules in their area accordingly.

Landlords who run large houses in multiple occupation (HMOs) will need to obtain a mandatory licence, as of 1 October 2018. This applies to a property let to give or more people from two or more separate households.

Those who own small HMOs may also be required to get a licence, depending on the local authority rules. The same goes for normal buy-to-let properties in certain areas.

According to Propertymark, the strains of landlord licences alongside additional pressures from Covid have caused issues for some landlords. Some have increased rents for tenants to cover the costs. For others, tenants failing to pay rent has meant they can’t afford to cover their licences.

Liverpool: a case of its own

The city of Liverpool is a key area when it comes to landlord licensing, as it had a city-wide licensing programme in effect between 2015 and 2020.

Late last year, a new scheme was approved, which will also come into effect in April. This will mean that about 80% of the city’s rental properties now need landlord licences to operate.

It is one of the largest such projects in the country, according to Councillor Abdul Qadir, and will boost the council’s ability to regulate and enforce safety standards in the sector.

“The council will make no profit from the scheme,” Qadir said. “Every single pound we get from landlords will be ring-fenced, paying for our team to be out on the streets every day inspecting homes, chasing disrepair.

“We are determined to take the strongest action those landlords who refuse to manage and keep their properties safe.”

The 16 city wards affected are: Central, Riverside, Greenbank, Kensington, Picton, Tuebrook & Stoneycroft, County, Anfield, St Michael’s, Princes Park, Kirkdale, Old Swan, Warbreck, Wavertree, Fazakerley and Everton.

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