Landlords are bracing for a potential wave of selective licensing schemes after the Government announced that councils will no longer need Whitehall approval for their introduction. From 23rd December 2024, local authorities can implement such schemes independently, provided they meet statutory conditions under the Housing Act 2004.
New rules scrap 20% limit
Previously, councils had to secure approval from the Secretary of State for any licensing scheme affecting more than 20% of their geographical area or 20% of privately rented homes. This safeguard, introduced in April 2015, ensured oversight and prevented excessive or blanket schemes.
The Government’s decision to relax these rules aligns with Labour’s “devolution drive”, granting more power to local authorities. However, councils must still meet existing legal requirements: schemes can only target areas with low housing demand or “significant and persistent problems with anti-social behaviour linked to private rented homes”.
The new guidance also mandates councils to consult for a minimum of 10 weeks and involve local mayors in decision-making. Moreover, councils must regularly report scheme progress to the Ministry of Housing, Communities and Local Government.
Landlords criticise ‘cash cow’ schemes
Landlords and industry leaders have expressed strong concerns over the move. Chris Norris, Policy Director at the National Residential Landlords Association (NRLA), questioned the logic behind the decision:
“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. Ministers must clarify how they plan to prevent the two schemes from duplicating each other.”
Norris warned that the changes could result in blanket schemes across entire towns, turning licensing into “nothing more than cash cows” for local councils. He highlighted that licensing does not necessarily lead to improved enforcement, referencing data from 2021 to 2023, which showed that seven of the top ten councils issuing improvement notices had no licensing schemes in place.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, echoed these frustrations, arguing that local authorities are already overwhelmed:
“Licensing means councils spend all their time administering schemes, rather than enforcing against rogue, criminal landlords. The private rented sector needs less selective licensing, not more, with the additional costs and duplication of rules that it brings.”
Douglas pointed to the Renters’ Rights Bill as a missed opportunity to streamline regulations. “The Government is failing to recognise the benefits of phasing out licensing schemes and providing councils with the resources they need to enforce the wide range of legislation that already exists.”
Balancing enforcement with fairness
The announcement leaves landlords questioning how councils will balance enforcement with fairness. Many landlords feel penalised by additional bureaucracy, while rogue operators remain untouched. As one property investor put it:
“The good landlords are being punished with endless paperwork and fees, while bad landlords carry on unnoticed. If councils focused on enforcement rather than admin, they’d see better results.”
The challenge now lies with councils to prove they can implement selective licensing effectively. Without significant resources to inspect properties and act against criminal landlords, critics argue the schemes will simply burden responsible landlords with extra costs.
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