Research by safeagent - the new name for the National Approved Letting Scheme - has found over 130,000 unlicensed properties in London. But it says the red tape surrounding licensing may be behind much of the problem.
It says these 130,000 properties should be licensed under either selective, additional or mandatory HMO licensing schemes.
The research, carried out via Freedom of Information requests, found over 310,000 private rented properties in London that require licensing under mandatory HMO, additional and selective licensing schemes implemented under the Housing Act 2004, and other borough-specific licensing regimes.
However, safeagent says bluntly: “Non-compliance in the capital is rife.”
Licence applications have been submitted for only 25 per cent of the 138,500 private rented properties that require licensing under mandatory HMO or additional licensing schemes - a non-compliance rate of 75 per cent.
But safeagent insists many could be falling foul of the law through ignorance of the complex regulatory framework.
The research, conducted for safeagent by London Property Licensing, says: “Since October 2018, the mandatory HMO licensing scheme has applied to most HMOs shared by five or more people whereas it was previously restricted to properties three or more storeys in height. In some boroughs, additional licensing schemes have extended licensing to properties rented to just three or four unrelated people. This complicated picture also makes it hard for council enforcement teams to assess which properties should have a licence.”
The picture for selective licensing is markedly different, however.
Licence applications have been submitted for 85 per cent of the 173,000 private rented properties that require licensing under selective licensing schemes in London - a non-compliance rate of 15 per cent.
safeagent additionally claims that many London councils are struggling to process over 24,000 licence applications: about 40 per cent of boroughs still rely on paper applications.
safeagent is calling for a simplification of licensing laws and chief executive Isobel Thomson says: “Consumers are not being well served and indeed many are being placed at risk through this mish mash of licensing schemes.
“Right now, the system isn’t fit for purpose and councils are drowning in paperwork. Landlords needing property licences are either deliberately evading the schemes or are in the dark concerning their legal responsibilities and tenants are being placed at risk.
“If the compliance rate for HMO licensing schemes is only 25 per cent how can these schemes be effective? Ultimately this is about proper use of public money and consumer protection. Where are the assessment procedures for councils who have schemes in place? Isn’t it time we went back to the drawing board to come up with a simple, streamlined system that works for all?"
The research involved FoI requests submitted to all 33 London local authorities seeking information about their property licensing activity as of May 1 2019. Responses have been received from every council.