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.