What could nationwide landlord registration and licensing in England mean for your landlords?
As the government considers a national landlord registration scheme in England as part of the proposals under the Renters' Reform Bill, Simon Tillyer, Director at Vouch, explains where we're at and what the future of landlord licensing and registration may be.
Letting and estate agents are being called upon to professionalise and become accredited through the announced - but still not official - Regulation of Property Agents (RoPA). Now, the question of landlords being registered or licensed across England is starting to gain some momentum, and is expected to be addressed in the Renters' Reform Bill white paper.
Other nations in the UK already have this type of system in place so, the first order of business: understanding the current lay of the land.
Landlord licensing in Scotland
In comparison to England, Scotland and Wales have the works. In Scotland, landlords need to register with their local council to get a landlord registration number, renewable every three years, proving that their properties meet the minimum legal requirements.
They're also encouraged to get accredited, to give tenants more reason to rent from them.
Landlord licensing in Wales
All landlords in Wales need to register with Rent Smart Wales, renewable every five years.
To be able to register, they also either need to appoint a licensed letting agent or, if they're self-managed, they need a licence themselves. To get a landlord licence, they need to undergo training to get qualified.
In both nations, landlords essentially agree to a code of practice, aiming to give tenants more peace of mind - again, very similar to the recommendations from the RoPA report for agents.
Do I need to register as a landlord in England?
In England, licensing is not nationwide. Local authorities shoulder the burden of proving that their area's eligible for a "selective licensing" scheme, based on criteria such as anti-social behaviour, low housing demand, poor property conditions, or high crime, levels of deprivation and migration. Less than 8% of private rental properties are currently under a licensing or register scheme in England.
HMOs are one area where all three nations are closely aligned in the current legislation - but based around slightly differing criteria. In England and Wales, rental properties with some shared facilities and five or more people forming a household require a license.
In Scotland, licensing applies to HMOs where three or more people from two or more households - in other words, those with no family connections - share rented accommodation.
Does landlord licensing work?
Back in 2019, an independent review was carried out to see how effective selective licensing was. It concluded that it can provide "positive outcomes" - but only when combined with supporting initiatives and associated resources.
Recent research has reconfirmed some of those positive outcomes. Generation Rent's analysis shows that the councils that license landlords take double the amount of enforcement action compared with other regions.
They also uncover more unsafe homes than those areas without licensing, with 85% of the hazards found then removed, vs only 65% of hazards resolved in non-licensing areas.
The Centre for Public Data's findings agree - lower anti-social behaviour and higher standards were found in licensing areas.
The challenges for landlord licensing
However two top challenges remain: funding, to help enforce the measures, and ensuring a cohesive approach to help make any future scheme a success.
Timothy Douglas, Policy and Campaigns Manager at ARLA Propertymark, has shown scepticism around the idea of a nationwide register or licensing system and agrees that any licensing or register of landlords can't stand alone for it to be effective.
"Most [licensing] schemes fail as they are not adequately resourced to undertake the necessary enforcement activity," he says. "A national landlord register on its own is not the magical solution to improve the effectiveness of property licensing."
"A patchwork of schemes will never give renters the protection they need, and are an inefficient use of council resources," says Anna Powell-Smith, Director at the research group, Centre for Public Data. "A national register will be cheaper to run and more effective in raising standards.”
Housing charity Shelter has recently said that the Renters' Reform Bill should be used to address this imbalance and ensure the right resources are allocated in the right places for a national register.
Mark Hayward, previously chief executive of ARLA Propertymark, said that a national landlord register was "on the horizon" back in October 2020 but that “it’s a vast piece of work to find out who [private landlords] are, where they are and how they could be regulated.”
A year on from his comments and the topic is still up for debate. We wait to see how the Renters' Reform Bill white paper may advance the issue when it's finally published in 2022.