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Category: buy to let mortgages

Councils deciding to launch selective licensing schemes may delay its introduction a further 3 months ‘to prepare for the scheme’s implementation’.

These updates, coming from Department of Levelling Up, Housing and Communities’, apply to schemes that cover less than 20% of a council’s housing stock, and so are able to be approved by the council themselves.

The guidance says the extra time given to councils is intended to allow people (including landlords) affected by the newly introduced licensing scheme time to be consulted by their local authority.

What is selective licensing? 

Introduced in the Housing Act of 2004, Selective Licensing is a scheme affecting landlords wherein if your property is in a designated area, you will have to apply for a license to let it from your local authority (most councils have an online property license checker).

The purpose of this license is to increase the quality of rental properties in a given area and hopes to:

  • Increase the rental period of tenants in the area
  • Increase property values of the area
  • Reduce anti-social behavior of the area

In the event that you find yourself in a selective licensing area, the period your application will span is 5 years, before requiring consideration for renewal.

Following the designation of an area for the selective licensing scheme, currently landlords are obligated to apply for a license within a three-month window, preceding the enforcement of the designation.

However, councils have now been advised to give an extra three months on top of the prior three-month limit, allowing landlords more time to apply for a license (if their property is in the designated area).

Selective licensing fees can vary depending on the region, as well as the specific areas where the licensing is implemented. For instance, in London, the cost per property licensing can exceed £1,000, whereas in Liverpool, it may be around £400.

Penalty for failing to apply for a license

It is crucial to note that if you reside in a selective licensing area and fail to apply and register your property with the local council, there will be repercussions. These consequences can include a potential fine of up to £30,000, and if convicted, you may be barred from obtaining a license in the future.

Why will the deadline be pushed back?

The deadline extension is being considered after landlords in certain areas raised concerns that they were not being properly informed about the regulatory changes made to their area.

In order to comply with local authority decisions, councils ought to make more effort communicating these changes to the landlords affected – especially since there is a whopping £30,000 fine for those found not in accordance.