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Landlords In Salford Face Selective Licensing

Landlords In Salford Face Selective Licensing

The City of Salford local authority (my local council), have finally approved proposals for a selective licensing scheme for landlords in another 3 areas within their region, these are the areas of Langworthy, Weaste and Seedley.

The areas outlined in the plan are currently undergoing some regeneration as historic churches are flattened along with the former home of Salford Reds rugby ground and entertainment venue, The Willows. New homes are currently being built on former brownfield sites within the area, that is just 5 minutes walk from the new home of the BBC at Media City.

Despite delaying the decision for over month, to consider outcomes and exit strategies, the scheme was finally approved, although it remains unclear if the objectives for the scheme are actually in place.

Instead, Salford promised to implement a number of discounts for compliant landlords and establish an engagement group which will supposedly meet to support the effective implementation of the scheme and shape its development.

The decision by Salford comes just a few weeks after the local authority revealed that the previous pilot scheme, which lapsed in May 2012, had lost £239,533 (GBP) during its five-year cycle; with further undisclosed costs for senior management support, enforcement action and Land Registry searches.

During the same period, Salford refused just five landlord licences, and revoked a further 73 landlord licences.

However, the local authority refused to say on what grounds the landlord licences had been revoked, and whether or not this figure included individuals who had simply sold their rental properties and left the private rented sector (PRS).

Chris Town, vice chairman of the Residential Landlords’ Association responded to Salford’s selective licensing decision,saying “The RLA is extremely disappointed with this decision. We are not satisfied that there is a strong case for this selective licensing scheme. Other local authorities such as Manchester, Leeds and Bournemouth have rejected selective licensing and are now looking at alternative methods of raising housing standards, particularly greater promotion of accreditation schemes and improved enforcement. Selective licensing simply does not work and is the legislative equivalent of using a sledgehammer to crack a nut.”

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The recent landmark decision to licence all private landlords made by Newham Council could damage the UK’s Private Rental Sector (PRS) if other local authorities adopt the same initiative, according to a number of the UK’s leading property professionals and landlord associations.

The mandatory licensing scheme, which will affect some 35,000 PRS tenancies within the borough of Newham, is intended to reduce the letting of sub-standard rental accommodation and remove rogue landlords from the local lettings market.

All landlords will have to sign up to the scheme, with landlords who fail to obtain a licence facing prosecution and fines of up to £20,000 (GBP).

However, with all UK local authorities subject to financial reforms many of whom will be facing budget and staffing cuts there is some doubt as to exactly how the new regulation will be implemented.

Local authorities across the UK who may now be considering adopting a similar mandatory licensing scheme for landlords are urged to take into account the financial and economic risks to their own local lettings market, by the property professionals operating within areas that may be considering such a move.

It is widely believed by many property professionals that blanket licensing of landlords only penalises good landlords while rogue operators remain off the radar.

Whilst there are bad landlords in every region of the UK, they are a tiny proportion of the overall PRS landlord network. Over regulation of the private-rented sector can stifle good business practices and deter tenants from seeking out rental properties managed by compliant landlords due to unnecessary red tape.

Any reform of the UK PRS should be sector led and funded, maintained and enforced by the Government. By imposing this poorly conceived micro regulation, Newham council could force landlords to leave the borough all together, reducing the available rental housing stock

The news of Newham councils decision came shortly after the Welsh assembly announced proposals for a scheme similar to that in Newham – a registration and licensing scheme for all private sector landlords in Wales.

The Private Rental Sector plays an invaluable role in reducing the national housing deficit, homelessness and creates business opportunities. It is crucial to keeping tenants that could be potential first time buyers with a roof over their head whilst they save for a deposit to purchase their own homes and extra bureaucracy will deter even the most diligent of landlords.

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