Spotlight: what is selective licensing?

Councils utilise selective licensing as a part of a wider regional strategy to help local authorities manage housing issues in areas of low demand. It is implemented when places have ongoing issues with antisocial behaviour and existing landlords consistently fail to tackle it. 

The policy was set up by the government to support good landlords that provide decent well-maintained homes, whilst discouraging rogue or criminal landlords that offer substandard lettings. 

What happens if a landlord fails to obtain a licence?

In an area which is subject to Selective Licensing, private landlords must obtain a license in order to operate and failure to do so can result in a punishment. 

If there is an unlicensed property, or a property failing to meet the required standards operating in an area under selective licensing, the local council can apply a range of sanctions.

The punishments for failing to comply with selective licensing vary between different local authorities but can include;

• Monetary fine
• Rent Repayment Order (RRO) 
• Banning order
• Ban from using a Section 21 notice to evict tenants

How is low housing demand determined?

Local councils must consider the following factors when determining whether an area is suffering from low demand;

• The market value of homes compared with other similar areas in the region 
• The rate of the turnover of properties 
• The number of properties available 
• The average length of time homes are unoccupied

Are landlords subject to a fit and proper persons test? 

When issuing a property licence, local councils must be satisfied that the applicant is a “fit and proper” person. 

As part of the Housing Act 2004, local authorities can prohibit a licence if the landlord has violence, drugs or sexual assault charges, has committed fraud or is known to discriminate against gender, colour, race, or disability.

If you’re a landlord and want to know more about how to expand or protect your investments, we are here to help.