Landlord Licenses: Birmingham waiting on approval

Landlord licences are now required in certain Birmingham wards.

After a 10 week consultation that ended on 4th January 2022, Birmingham Council are waiting for Levelling Up Secretary Michael Gove to approve the UK’s biggest selective licensing scheme.

Rent Guarantee Insurance for £299

• ✓ Covered for £2,500 per month
• ✓ Claim up to £25,000
• ✓ Free access to legal advice

Buy now

This is permitted to local authorities under the Housing Act 2004, which means that all private rented accommodation which is let or occupied is done so under a licence.

Landlords in the following 25 wards are set to fall under the scheme:

The proposed licence fee of £700 – increased from £670 to meet extra staffing costs – will generate £28million from 40,000 properties. If you do not have a licence when required, you face a £30,000 fine.

Why are landlord licences necessary?

Selective licensing is considered under certain conditions in areas that are:

• Experiencing poor property conditions
• High levels of migration
• High levels of deprivation
• High crime levels

Birmingham is making the application on the basis of high crime and deprivation rates. The  report from Birmingham City Council Cabinet states: 

A selective licensing scheme will ensure that all privately rented properties within the designated area meet a minimum housing standard, which gives the tenant a stable home and helps with building stable communities.

However, the results of the consultation which ended earlier this year show that only a ‘minority’ of landlords and agents agree that a selective licensing scheme would address crime and deprivation. The majority of other parties involved agreed that it would.

Some landlords are baffled as to how a licence will impact crime rates, particularly burglary, stating that there are alternatives, including strengthening community ties with the local police.

But Birmingham hopes that the scheme will improve 1,000 properties every year and reduce the deprivation gap between the 25 wards and the rest of the city, as well as making properties safer and therefore less at risk of crime. The scheme will also alleviate fuel poverty as standards landlords will have to adhere to include ensuring that heating is properly maintained and more energy efficient.

Does the selective licensing scheme go far enough?

Cllr Matt Bennett of Edgbaston, one of the 25 proposed wards, doesn’t think so as it has only considered two of the available criteria. He fears that the issues will simply move to different parts of the city which are unaffected by the licensing scheme.

While the majority of landlords are meeting their obligations and taking their responsibilities to their tenants seriously, there are others who give landlords the world over a bad name. Cracking down on these rogue landlords, by forcing them to meet certain standards or face fines is a good idea.

However, landlords are already considering selling up and leaving the industry because of the strain of additional regulations. There is also the worry that this additional cost could be passed onto tenants, who are already struggling with bills due to the cost of living crisis. If you are one of the landlords affected by this, you should look into Rent Guarantee Insurance as well as your licence. While this is an additional cost, it will protect you if your tenants fall into arrears. 

So does this crackdown hurt good landlords more than it hinders the bad ones? Check out our webinar where we talk about an upcoming landlord register: Double Blow: Landlord Register and No Section 21

Copied!