A lettings agency says the cost of living crisis calls into question the viability of a selective licensing scheme in its area.

Selective licensing gives councils the power to regulate privately rented housing in areas of high deprivation, crime, anti-social behaviour and migration or low housing demand. This involves charging a fee for a five-year licence, which is not transferrable if the house is sold to another landlord during that time.

Durham County Council, unlike many other local authorities that have only designated a handful of streets for selective licensing, has imposed the scheme on some 29,000 properties – or 42 per cent of the county’s private rented sector.

It charges a fee of £500 per property, although discounts were available for early applicants or those seeking multiple licences.

Ben Quaintrell, the managing director of County Durham-headquartered lettings agency My Property Box – which covers the North East and North Yorkshire – says: “This scheme runs the risk of increasing rents, with some landlords who are themselves financially squeezed, passing on the licensing costs to already hard-pressed tenants.

“With the cost of living crisis, fuelled by soaring inflation and an energy price cap expected to near £3,000 this October, any additional financial pressure – such as that created by selective licensing – could have a detrimental impact on the health and wellbeing of those in privately rented accommodation.”

He adds: “I would also question why Durham County Council has imposed the licensing scheme on such a large proportion of the area’s privately rented housing stock.

“I contend that this is an unfair mandatory tax on responsible private landlords and that it is unlikely to induce unscrupulous landlords to improve their standards. In addition, it may drive landlords out of areas where there is already a shortage of rented properties.”

Under the scheme it’s an offence to let a property within a selective housing area without a licence and any landlord failing to comply faces prosecution and a hefty fine.

Licences have several conditions attached to make sure properties and tenancies are effectively managed. Some of those stipulations are legally required while others are in response to local conditions designed to tackle problems affecting a particular licensing area.