This note explains the history and operation of selective licensing schemes for private rented properties since local authorities acquired the power to introduce these schemes in April 2006.Jump to full report >>
This note explains the history and operation of selective licensing schemes for private rented properties since local authorities acquired the power to introduce these schemes in April 2006.
Sections 79, 80 and 81 of the Housing Act 2004 provided for the introduction of a scheme of selective licensing of private landlords in a local housing authority’s area. Selective licensing is intended to address the impact of poor quality private landlords and anti-social tenants. It has primarily been developed with the need to tackle problems in areas of low housing demand in mind – although the Act also allows for selective licensing in some other circumstances. Many of the provisions relating to selective licensing are similar to those relating to the mandatory and discretionary licensing of Houses in Multiple Occupation (HMOs) – regimes which were also introduced by the 2004 Act.
In an area subject to selective licensing, all private landlords must obtain a licence and if they fail to do so, or fail to achieve acceptable management standards, the authority can take enforcement action - e.g., issuing a fine of up to £20,000 or in some cases, assuming management control of the property. The London Borough of Newham introduced a selective licensing scheme covering all private rented properties in the borough in January 2013 – a number of authorities have followed suit. Increased interest in licensing appears to be directly linked to the growth of the sector (now the second largest tenure in England).
The Communities and Local Government Committee’s inquiry into the private rented sector (2012-13) considered the operation of selective licensing and recommended that the Government should bring forward proposals for a reformed approach. In the February 2014 consultation paper, Review of Property Conditions in the Private Rented Sector, the Government criticised borough-wide licensing schemes and expressed a preference for voluntary accreditation. The deadline for responses to the consultation exercise was 28 March 2014. At the time of writing the Government’s response had not been published; however, Brandon Lewis (the Minister) wrote to all local authorities on 11 March 2015 advising that, from 1 April 2015, local authorities will have to seek confirmation from the Secretary of State for any selective licensing scheme which would cover more than 20% of their geographical area or would affect more than 20% of privately rented homes in the local authority area. This will not apply retrospectively.
Background information on the origins of the scheme can be found in Part III of Library Research Paper 04/02, The Housing Bill. DCLG published two leaflets on the subject: a general guide - Selective Licensing of other residential accommodation (now archived); and a procedural document, aimed mainly at local authorities considering a selective licensing scheme – Approval steps for Additional and Selective Licensing Designation in England (now archived).
Other relevant Library Standard Notes include: SN/SP/1012 Anti-social behaviour in private housing and SN/SP/708 Houses in multiple occupation (HMOs).
Commons Briefing papers SN04634
Authors: Nerys Roberts; Wendy Wilson