Landlord licensing review - what do letting agents need to know?

The recommendations of an independent review into selective licensing in the private rented sector were recently announced, with plans - broadly supported by the government - to tighten processes further.

The government said last year it was committed to improving guidance for letting agents, landlords and local authorities on selective licensing to help create a secure, stable and decent housing market for all.

To aid with this, and as part of the improved guidance, the government commissioned Opinion Research Services to conduct a thorough review of selective licensing. It subsequently carried out in-depth research and consultations with consumer bodies and the industry to come to its conclusions.

What did the report find?

It showed that selective licensing is an effective tool when implemented in the correct manner. It also identified a range of areas where the operation or implementation of selective licensing schemes could be bettered.

Such improvements could include the potential introduction of a landlords register, alterations to the way licensing proposals are consulted upon and a 'light touch' easier renewal of licensing regimes when they expire.

Other recommendations the report made included:

• Asking the government to consider expanding the range of offences which can trigger a landlord failing the ‘fit and proper person’ test as part of an application for a license to include breaches of planning law.
• Allowing local authorities to streamline the license application process for landlords by allowing local authorities to include on the application form only those questions that they consider relevant to their specific scheme.
• Considering the introduction of a national registration scheme for landlords to support and complement selective licensing.
• Exploring alternatives to judicial review as the primary method of challenging a designation, as the process of judicial review can be prohibitively expensive.
• Issuing best practice/guidance as appropriate to support local authorities and improve the implementation of schemes.

"Selective licensing has made a real difference to areas across the country," a spokesperson for the Ministry of Housing, Communities and Local Government said.

"This report further demonstrates that with proper planning, consultation and implementation, these schemes can make a real difference to the quality of homes people live in. The report does highlight some important matters which require further consideration, and we will work with the sector to continue to understand their concerns before responding fully."

Increased compliance obligations for agents and landlords

Selective licensing has proved to be quite a bone of contention in recent years, with many in the industry standing against it as an effective means of regulation.

David Cox, chief executive of trade body ARLA Propertymark, recently said: "Licensing schemes do not work, and never will", adding they are not 'an effective way of promoting higher quality accommodation'.

He also said introducing landlord registration, as is proposed in the above recommendations, will not be the silver bullet to improve the effectiveness of property licensing. "Local authorities need investment to enforce the wide range of legislation that already exists," he concluded.

Despite this, and wider opposition to selective licensing from the industry, it seems pretty inevitable that further selective licensing will be introduced in the near future.

As such, landlords - and the agents managing homes and tenancies on their behalf - could have increased compliance obligations as a result. This comes on top of all the existing legislation in place in the private rented sector, and the new regulation that is set to come into force soon such as mandatory five-year electrical checks for rented homes in England and a further tightening of energy efficiency regulations.

To cope with these increased compliance obligations, it's vitally important that agents have a secure and efficient system in place to ensure nothing slips through the net and all regulation and legislation is adhered to in the appropriate way.

This is where an all-in-one, cloud-based software system comes into its own, allowing you to manage all your letting agency needs in one simple package. Here at Gnomen, we offer such a package, enabling you to work smarter, safer and more efficiently.

You can get a complete overview of your business at any time, from any place, at the mere click of a button. This means you can stay on top of your diary, marketing and property management seamlessly, as well as keeping tabs on your staff and office to ensure productivity is at a good level and that your landlord clients are receiving the best possible service.

We also enable you to keep an eye on your bottom line – even more crucial now, in light of the Tenant Fees Act and increased compliance needs – by being one of the only property software platforms to offer full office accounting.

A crucial part of building an excellent relationship with your landlord clients is communication, and we can help out with this too. Our 24/7 customer portal for landlords means you can streamline property management with live accounts and updates. This means they can view inspection reports and statements/invoices at the click of a button, as well as sharing documents such as tenancy agreements with ease.

Additionally, we provide expert website design services to ensure your website – your online shop window – stands out from the crowd.

To discover more about what we can do for you, please call 0208 123 9019 or book a free demo here.