Consultation starts on new licensing scheme to support rented housing improvements

HMO Housing

Consultation has begun on a new licensing scheme for landlords to improve standards in the private rented housing sector.

The consultation runs until 21 August 2022 and gives local people, tenants, landlords, letting agents and other interested individuals and organisations the chance to comment on the proposals by Nottingham City Council to introduce a second ‘Selective Licensing’ scheme, requiring private landlords to obtain a licence demonstrating that they and their properties meet required standards.

This new scheme would continue the important work already being carried out during the current scheme to make sure that privately rented homes are safer, suitable for tenants to live in and that they are managed effectively. It will give the council additional resource and powers to safeguard tenants and hold non-compliant landlords to account.

Privately rented housing has grown considerably within Nottingham including 45,500 properties as of 2021 and a Selective Licensing scheme or ’designation’ may be made if an area has a high proportion of private rented homes and meets one or more conditions laid out in the Housing Act 2004. The council believes a new licensing scheme should be considered for a large area of the city including Bulwell, St Ann’s, The Meadows, Hyson Green, Radford, Forest Fields and Lenton, based on:

  1. Significant or persistent problems caused by anti-social behaviour
  2. Poor property conditions
  3. High levels of deprivation
  4. High levels of crime

A second scheme of Selective Licensing would enable the council to not only support landlords in making sure that their properties meet certain standards, but also help to improve and tackle key issues, as well as supporting the overall health and wellbeing of tenants due to improved housing conditions.

As with the first scheme, the council would not be allowed to make any surplus on the scheme and all revenue from the licence fees would only be used to cover the cost of administering the scheme.

Nottingham City Council does not believe landlords will need to increase tenants rent to cover the cost of a licence. Most landlords in the city already have a housing licence, so a new licence should be factored into their business plan and any previous increase in rents that they may have made should cover a new licence fee. A new scheme would not start until August 2023, so this would also give landlords time to plan. The accredited licence fee is also paid in two parts £300 and £330 and a licence lasts 5 years, this works out at around £10 a month. So, if a landlord or agent say they need to increase a tenants rent by £50 a month to cover the cost, over 5 years they’ll receive £3,000, which is a profit of £2,370.

Councillor Toby Neal, Portfolio Holder for Housing and Human Resources, said: “People renting privately have a right to expect a decent standard of accommodation. Many of the 45,000 plus privately rented properties in the city are well-managed but, as part of the first scheme we still find properties that are to a very poor standard. Homes with damp and mould, homes with no smoke alarms or hot water or heating. So there is more work to be done.

“It is proven that poorly managed properties cause problems for local neighbourhoods that see higher crime and anti-social behaviour rates. The council believes the introduction of a new licensing scheme would not only bring benefits for tenants and local communities, but also landlords who, by obtaining a licence at a reasonable cost, will be able to clearly demonstrate to prospective tenants that they meet required standards.

“We’re keen for as many people as possible have their say in the consultation and tell us what they think about the new selective licensing proposal as a way of improving the quality of privately rented accommodation in the city”.

The plans are for a brand new Selective Licensing scheme and not a renewal of the first scheme introduced in August 2018. This is because each licensing scheme can run for up to five years, then evidence needs to be gathered and presented again to confirm whether another scheme meets one or more of the conditions of the Housing Act 2004 (see below) and government guidance.[1].

A new Selective Licensing scheme is about helping to improve homes in the private rented sector and make homes in Nottingham safer and warmer places to live. This scheme ties into Nottingham City Council’s Housing Strategy, which sets out how improvements can be made to the private and social housing sector. With Nottingham City Council already investing in improving their own housing stock and working towards making more council homes warmer, energy efficient and to a higher standard.

The consultation runs until 21 August 2022. Following the outcome of the consultation period, the council would then need to decide whether it will make a designation or not, and if it does, will need to make an application to the Secretary of State for approval to introduce a new scheme.

People can find out more information and have their say on the consultation here – https://www.nottinghamcity.gov.uk/engage-nottingham-hub/open-consultations/selective-licensing/

1.Significant or persistent problems caused by anti-social behaviour

  • Crime and ASB rate is significantly higher in areas with a high number of private rented households, with 72% of all ASB reports coming from these areas
  • Poor property conditions
  • Areas with a high number of rented homes are more than twice as likely to experience issues of disrepair, one and a half times more likely to experience excess cold and four times more likely to report issues of disrepair
  • Almost all housing complaints to the Council are attributable to the private rented sector
  • High levels of deprivation
  • Nottingham is the 11th most deprived district in the country and the fourth most deprived of the Core Cities
  • 56 areas of Nottingham are in the 10% most deprived in the country, and 104 are in the 20% most deprived.
  • High levels of crime
  • Areas with larger numbers of rented homes have 25% more reports of dwelling related crime on average, than other areas
  • These areas also have higher incidences of all types of crime compared to the city overall and are almost twice as likely to experience crime as the rest of the city

[1] Gov.UK (2015) Selective Licensing in the Private Rented Sector: A Guide for Local Authorities

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