Prime Minister announces new licensing regime to crack down on unscrupulous landlords

Friday, May 22nd, 2015 -

In a surprise announcement on Thursday 21 May 2015, Prime Minister David Cameron revealed proposals for a new mandatory licensing regime for landlords as part of package of immigration measures to be included in next week’s Queens Speech.

Commenting specifically on the private rented sector, the Prime Minister said:

We’ll also crack down on the unscrupulous landlords who cram houses full of illegal migrants, by introducing a new mandatory licensing regime.

At the time of writing, it is unclear exactly what this will mean for the private rented sector. Local councils already operate a mandatory HMO licensing scheme for certain larger Houses in Multiple Occupation and have the power to introduce selective or additional schemes to extend licensing to a wider range of private rented accommodation.

In April 2015, London Property Licensing revealed that there are already fifteen separate property licensing schemes operating in London covering over 100,000 private rented properties, yet less than 40,000 properties had been licensed so far. Between March 2011 and April 2014, landlords were subject to 580 housing prosecutions in London under the Housing Act 2004.

It is not known whether this new government proposal is for a landlord or property based scheme and whether it would supplement or replace the existing licensing arrangements.

The announcement comes less than two months after the government restricted councils’ ability to implement selective licensing schemes covering more the 20% of private landlords or 20% of the local authority area, without obtaining consent from the Secretary of State (more information here).

In the same speech, the Prime Minister announced:

  • plans to speed up the national roll out of ‘Right to Rent’ checks whereby landlords must check the immigration status of prospective tenants; and
  • consultation on automatically ending tenancies when visas expire.

Commenting on the announcement, Richard Lambert, Chief Executive Officer at the National Landlords Association (NLA), said:

We welcome the initiative taken by government to tackle the problem of criminals acting as private landlords to exploit illegal migrants.

However, it is essential that councils are given the necessary funding to ensure that they can enforce these powers effectively. This would help drive up standards in the sector and send a powerful message to criminals.

One of the fundamental reasons that a minority of criminal landlords are able to get away with providing poor living conditions is that councils do not have the resources to make use of their already significant powers.

We would like to see the Treasury allow councils to keep the proceeds of the fines from prosecutions so that councils have both the powers and finances for enforcement, without going cap in hand to the Treasury.

The introduction of a new mandatory licensing regime brings up some concern. We are therefore urgently seeking clarification on whether this would be new policy or related to the current licensing schemes.

A transcript of the Prime Minister’s full speech is available here.

Readers can contribute to an online discussion about the Prime Minister’s announcement on the Property Tribes website.