Propertymark calls for change of thinking in property licencing ahead of Renters’ Rights Bill

Propertymark has responded to additional and selective licencing consultations over the summer from Enfield, Reading, Gateshead and Wandsworth, and have called for a general rethink of local licencing schemes ahead of the creation of a digital private rented sector database.

The trade body has also responded to a consultation from the London Borough of Lambeth on a proposal to introduce Article 4 Directions for small Houses of Multiple Occupation (HMOs).

Lambeth’s proposal will effectively mean that landlords will no longer have permitted development rights and will be required to seek planning permission to convert dwellinghouses into small HMOs in the Common & Vale and Streatham St Leonard’s area of the borough.

However, Propertymark has argued that the proposal could have a damaging impact on rent levels, the supply of affordable housing, and will do little to improve HMO property conditions. Additionally, concern was raised over the supply of student accommodation and the impact on the local economy.

On the overall issue of property licencing, Propertymark argues that licencing schemes are a blunt instrument in improving standards with many compliant letting agents and their landlords paying fees, leaving rouge landlords and agents to operate under the radar whilst valuable council resources are consumed by administration of the schemes.

Concerns were also raised over the impact the scheme could have on housing supply, the ability of local authorities to effectively enforce standards with low prosecutions numbers, and whether such schemes are value for money.

Removing poor landlord management practices as well as sub-standard properties is vital to improving the sector and the lived experience of tenants. To this end, Propertymark has long felt that an annual ‘MOT’ of rental properties should replace the expensive existing discretionary licencing schemes, improve enforcement, and give agent and landlords a steer on how to maintain or improve conditions for tenants. This would encompass all areas of property condition, including energy efficiency and minimum health and safety standards.

The recent local authority consultations on property licencing come as the Ministry of Housing, Communities and Local Government (MHCLG) consider how the UK Government’s proposal for a national digital private rented sector database could be achieved, with Propertymark arguing the national database will leave local licencing surplus to requirement and will duplicate the national scheme.

Tim Thomas, Policy and Campaigns Officer at Propertymark, said:

“Debate around the Renters’ Rights Bill should be seen as an opportunity to consider fresh ideas in improving standards within the private rented sector in England. It is clear that as local authorities call for the reintroduction of licencing schemes for an additional five-year period, they have been unsuccessful in their aim in improving standards.

“The UK Government’s proposed database should make local authority licencing unnecessary, and rather than reintroduce unsuccessful schemes, MHCLG should concentrate on how national licencing can accommodate the important role that letting agents play in managing properties and ensuring landlords raise standards.”