Improving property standards
Whilst we have stressed, we share local authorities' aims in improving standards within the PRS, reducing anti-social behaviour and tackling problems such as empty properties and low demand, licensing schemes come at a cost for landlords. These sometimes run into thousands of pounds, especially where landlords have multiple properties in one area. This money would be far better used directly improving standards.
Propertymark submitted responses for Manchester, Middlesborough, Merton, Brent, and the London Borough of Tower Hamlets proposed schemes, outlining our concerns as well as the importance of offering discounts for members of organisations such as Propertymark who aspire to high standards.
Engagement with local authorities online or in-person consultation events regarding licensing schemes will be paramount for Propertymark, where we will use the opportunity to emphasise the best way to improve standards is by supporting landlords through engagement, training, and grant funding opportunities.
Types of schemes
Licensing schemes include additional licensing schemes for Houses of Multiple Occupation (HMOs) not eligible for mandatory licensing schemes to selective licenses for all PRS properties in an area.
Mandatory licenses apply to HMOs which are three or more storeys high and have five or more occupiers who do not form a single household. The number of storeys includes habitable basements and attics. Local authorities can mandate licensing for smaller HMOs with an additional license.
Regulation through the planning system
Another form of regulation of HMOs open to local authorities is the implementation of an Article 4 Direction, which is made by the local planning authority. It restricts the scope of permitted development rights in relation to a particular area or site, or a particular type of development anywhere in the authority's area. In this case, it can be used to restrict the number of HMOs in an area.
The supply of HMOs
In regulating and restricting the number of HMOs, we have raised concern over the possibility of reducing viable housing options for vulnerable low-income people. Regional economies can be impacted by reducing housing options for contract workers and for university students. Once the supply of HMOs is reduced, rents will likely increase for those remaining in the sector.
We have also challenged local aspects of schemes such as plans to reduce the number of empty properties, reduce anti-social behaviour, and improve energy efficiency.
For any licensing scheme that makes up over 20% of a local authority PRS stock or takes up 20% of a local authority geographic area, the Secretary of State for the Department for Levelling Up, Housing and Communities can withhold the decision.
In relation to Borough-wide schemes in Brent and the London Borough of Tower Hamlets, Propertymark has also written to Michael Gove MP, Secretary of State for Levelling Up, Housing and Communities outlining our concerns.