Newham finally wins right to carry on with licensing scheme – after a fight

Newham Council – the first local authority in the country to introduce blanket licensing of all rental properties on its patch – has had the scheme renewed.

The Government has given permission, but excluded one area – Queen Elizabeth Olympic Park, which is operated by corporate landlord Get Living London. The omission means that rental  properties in the whole E20 postcode, amounting to 3% of the borough, will not have to be licensed unless caught by the mandatory requirements for some HMOs.

The council is very critical of what it calls the Government’s “unnecessary delay” in coming to a decision on the licensing scheme. Newham formally applied on July 13, expecting approval within eight weeks – the Government’s own timeframe. The decision was two months overdue.

It means there will be a gap of two to three months between the ending of the current scheme and the start of the new. The council says this will leave residents vulnerable and confuse landlords.

Newham had been fighting for some time for its licensing scheme to be renewed, pointing to its successes.

Since its introduction five years ago, Newham Council has brought 1,225 prosecutions, served 2,834 notices requiring properties to be made safe, and banned 28 landlords, forcing them either to sell up or to hand over their properties to an agent. It has also recovered £3.1m a year in unpaid council tax.

The authority has also targeted letting agents throughout the borough, prosecuting at least two, issuing legal notices against over 100, and recovering tenancy deposits that were illegally retained. This autumn Newham set up a letting agency ‘rating’ scheme in a further drive to raise standards.

The council said: “Despite this success, in 2015 the Government introduced a new piece of legislation requiring government permission to introduce widespread selective licensing schemes.

“The standard of ‘proof’ required to gain approval is onerous, and forces local authorities into a lengthy and costly process, which may deter many councils from applying.”

Newham Council said it remains concerned about the “bureaucratic” nature of the licensing application process, the lengthy delays in receiving a decision by ministers and the significant costs this has forced the council to incur.

Newham mayor Sir Robin Wales said: “Newham prosecutes more criminal landlords than the rest of London put together and has demonstrated that private rented sector licensing is the most effective way of protecting tenants and driving up standards across the sector.

“The Government has finally recognised the success of Newham’s scheme, but it is ridiculous that ministers took so long.”

The Newham scheme has proved something of a template for other local authorities: there are currently 67 licensing schemes in England, with a further ten in consultation.

In Newham, there are 41,000 households in private rented accommodation – 46% of all households.

There will be an early-bird incentive for landlords to get their next five-year licences at a reduced cost of £400 per property. The normal cost will be £800.

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3 Comments

  1. new life

    Typical british goivernment , why is it ok for the average landlord to pay £800 for a property licence yet get living london owned by a middle eastern royal family be excempt ??, the stench of a British government again looking after a foriegn investors to further good relations  leave a very sour taste for this Agent / landlord.

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    1. angrylandlord91

      It’s interesting to hear Newham Council’s complaint about having to gain approval from the Government for its licensing scheme: “The standard of ‘proof’ required to gain approval is onerous, and forces local authorities into a lengthy and costly process, which may deter many councils from applying.”

      But has it considered this from the point of view of a responsible landlord? After reading again & again the council’s website about the licensing fee structure, I believe it costs £800 to have a “selective” licence to rent to a family or 2 sharers & £1,250 to have an “additional” licence for 3 sharers. According to reports, new licence fees would have jumped by up to 60%! Furthermore, if my family tenants leave & I need to switch from “selective” licence to an “additional” licence, I’d need to fork out another £1,250 for a new licence. Is this not costly & painful for a responsible landlord? Will Newham Council also explain why when its 5-year licence is no longer required, it won’t give a refund to the landlord for the unexpired portion of the licence?

      No doubt many landlords will be forced to try & recoup the licencing costs from its tenants thereby pushing up rent levels or deterred from becoming a landlord altogether reducing the available supply of rental properties which can also push up rents. If the Council’s sole aim is to tackle rogue landlords, why is it also punishing responsible landlords with unreasonably high licence fees??

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  2. ALT10092

    Newham Council has been fighting re-new the landlord licensing scheme.

    It was the first council to license all private landlords. It has used propaganda, to slur private landlords in the media.

    The irony is that there was no problem with housing, during the London 2012 Olympics, when the world’s eyes were on Newham.

    The Council published photos of some people living a disused walk-in-freezer and being charged rent and claimed all landlords were rogues. How many walk-in-freezers are available for rent on Rightmove?.

    I suspect these people are now sleeping rough on the streets and Newham council handing them a £70 fixed penalty notice.

    Newham claimed landlords were rogue, yet managed to license 25,000 or so landlords within a few months and claimed their licensing scheme was a huge success. So why after 5 years do they say their licensing scheme has not worked and they need to renew it?

    I have no problem with Licensing, but I am frustrated by the bureaucracy and the fees.  Each council have their own petty rules. Every few months there are new laws.

    One Newham landlord, was unaware, his tenant had sublet the bedrooms to other people and overcrowded the property. If the council received complaints from neighbours, they should first tell the landlords rather then turn up with a TV crew. They prosecuted the landlord, even though he was a victim of his tenants actions.     In the interest of justice, the council should inform of potential problems. The legal cost in defending himself were huge. There is no deterrent for the tenant, to rent another home and to the same to another landlords.

    We have a housing crisis. Why should someone with an empty homes (e..g working abroad), be forced to rent out their home, if it puts their reputation and character in jeopardy?. The laws do not protect landlords, from rogue tenants.

    The Government have banned letting fees, they should also ban licensing fees.

    George Osborne increased taxes on small landlords, where interest is no longer a tax-deductible expense, even though it is a genuine expense in the course of trade. It is a bit like turning up to work, earning £50  for a day and then receiving a tax bill from HMRC for £70.  Landlords are under attack from all sides….

    They increased taxes on private landlords, but those landlords housing benefit tenants cant put up rents to cover the new tax bill or the increased licensing fees.

    Newham also has the highest eviction rates in the country, this is a cause of Licensing.

    Many of the problems in Newham are down to local politics. They have 60 Labour councillors and every single councillor is from the Labour party.  There are no opposition councillors. They also have an elected Mayor, who runs the place like a dictatorship.  He spent £110million on buying luxury waterfront council office. They have racked up debts of £800million. Every £1 in 4 raised from council tax goes to pay bank interest.

    They don’t spend any money improving the local area. It makes it harder for landlords to attract good tenants. The local Labour party, don’t want the area to improve, because it would lead to them loosing their council seats. The licensing fee, is to make it harder for local landlords to improve properties.  It unclear how handing over £500 to £1900 to the local council is going to improve standards other then end with more paperwork and bureaucracy.

     

     

     

    They have debts of £800million and every £1 out of £4, goes to pay the interest on these

     

     

     

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