Buy-to-let law curbs council selective licensing close up shot of tablet device

Buy-to-let law curbs council selective licensing

Local councils have had their wide-ranging power to impose selective licensing on private landlords reined in.

The Department of Communities and Local Government (DCLG) has stopped councils from blanket licensing buy to let and house in multiple occupation (HMO) landlords with new legislation.

The Selective Licensing of Houses (Additional Conditions)(England) Order 2015 prevents any council in England from setting up a selective licensing scheme without DCLG permission if the scheme applies to 20% or more of the council’s area or 20% or more of private rented homes in the area.

The scheme is aimed at stopping councils setting up selective licensing schemes covering large areas without good reason. The order takes effect from March 27, 2015.

“All applications will be dealt with on a case by case basis and councils must prove why they need to introduce blanket licensing,” said a spokesman for the Department of Communities and Local Government.

The regulations demand the area for designation as selective licensing neighbourhood to have a large number of private rented homes and that these homes match at least one of four other conditions:

  • The homes are a danger to health and safety
  • The homes are overcrowded
  • The licensing zone is a deprived area
  • The neighbourhood suffers from too much crime

“Selective licensing can play an effective role in tackling criminal landlords and linked activities, for example illegal immigration,” said the spokesman. “When it is applied in a borough wide fashion and not properly enforced, it can affect the majority of landlords who provide a good service. The government is mindful of this when considering the use of selective licensing.”

Find out more about selective licensing

The only council with blanket selective licensing in place is Newham, East London, where the local authority licences 35,000 buy to let and HMO properties.

Other councils in London, such as Walthamstow, have expressed an interest in blanket licensing of all private landlords.

Enfield Council, North London, lost a legal challenge against a proposed selective licensing scheme in the High Court last year on the grounds an ineffective consultation was carried out.

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ADDED: 7th April 2015