Other councils should not even think about introducing blanket licensing of private rental properties until it is clear how the controversial Newham scheme is faring.
The call has come from London letting agent Robert Nichols, director of Edmund Cude, which manages properties in Newham.
Nichols said that the scheme could well prove to be a bureaucratic nightmare for the council, as well as for tenants.
He expressed deep concern that Liverpool City Council is already embarking on launching a similar blanket licensing scheme – one covering over 50,000 properties and will be even larger than Newham’s 35,000-strong portfolio. Other councils seem likely to follow with other blanket schemes, which are beginning to look the shape of things to come.
Nichols warned Liverpool agents and landlords what they might expect: “In terms of the Newham process, anyone can apply for a property licence. However, they must be the most appropriate person to do so.
“Normally this will be the owner or a manager employed by the owner. The proposed licence holder needs to be the most appropriate person, namely the landlord, person in receipt of rent or in control of the property.
“At the very least, the council expects the licence holder to have the power to let and terminate the tenancies, and access all parts of the premises to the same extent as the owner.
“There are no timescales given anywhere, probably because Newham Council don’t know themselves and haven’t got the manpower to process all the applications.
“If they had ten people working for seven hours a day on this and it took an hour to process each application, it would take at least two years. And all that is before they even start tackling the problems.
“I am also assuming they have a dedicated team of ten, which is unlikely.”
Newham Council has said it expects to spend £329,000 in the first year on promoting and implementing the scheme, including IT systems and recruiting additional teams of temps. It expects the scheme to break even from next year onwards.
Nichols went on: “The scheme itself is deeply flawed. It’s not yet clear as to whether or not the landlord licensing scheme will lead to an exodus of landlords from the borough – only time will tell. However, by burdening landlords with an extra piece of bureaucracy, Newham Council risks de-incentivising landlords from operating in the area.
“All this comes at a time when the private rental sector plays an invaluable role in reducing the national housing deficit and we should be doing all we can to encourage, not inhibit, landlords.
“Furthermore, it is largely duplicative in terms of the existing legislation available to tenants to address sub-standard living conditions. A tenant education programme would be more cost-effective.
“At this stage, our concern is that other councils, such as Liverpool, will look to embark on similar initiatives before the negative fallout of Newham’s licensing regulation becomes apparent.”
However, the Mayor of Newham, Sir Robin Wales, is as unrepentant as Liverpool seems determined to press ahead.
Wales told the BBC: “When we consulted our residents, a massive majority were in favour of this. The bad behaviour occurs in the bad properties – the anti-social behaviour, the mess in the garden. We need to go after them.”
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Comments
I'm not sure that many existing landlords will be able to take the moral high ground and leave the area Ray, although I agree with your sentiments.
If Caroline is correct however, it will stifle further investors if most rental houses were to be let to council tenants. A casual drive around most council estates in the country will put most most people off investing in such areas
@Caroline Saul on 2013-01-10 12:47:30IN
Some sense in your comments, especially the 3rd paragraph.
In these "licensed" areas is it not time for landlords and agents to leave a s(t)inking ship?
Lets face it...the scheme is all about the money for the council and access to landlords for landlord leasing opportunities.... plus access to to private properties for tenants they do not want.
I recently attended a NLA Meeting where a council representative boasted on fining a landlord for allegedly being bad (uneducated not bad we say!) to top it of she stated that they had taken the property from him, and its now on lease! no options for the landlord. the council now manage the property, rent, repairs etc...paying him a nominal amount for the lease. he's not happy but what can he do....of interest she also stated they were sifting through the Council Tax Records and making direct approaches to landlords for management of their properties!!!
This is a way forward for the council to privatise their private rented sections that weer there to monitor the accreditation scheme whilst giving advice and guidance, they're now setting the framework to squeeze out letting agents...
Education should be a primary for landlords along with a supportive network. Bullying into submission is not the way to go.
Lets face it Social Housing was for poor families on little or no income. If the council were honest in who they were evicting there would be no selective licensing s an excuse to control private lettings and charge £600+ per property, yet another squeeze on the landlord.
Sadly, all the warnings in the world wont make a blind bit of difference.
Its about the loony left controlling the PRS. Bet your bottom dollar that before long, the database of private Landlords will be sold to specialist insurance companies, lenders, specialist Lawyers.......
It's a slippery slope. Next they will want to know the rents charged and tacitly seek to rent cap.
This mess needs dividing into halves at least;
How does the landlord and or agent force a tenant to behave themselves?
How dose the tenant force the landlord/agent to keep them in the style which they 'know' they should have?
We can then subdivide these groups into agent and landlord responsibilities.
If an agent is sacked then what happens to the expensive license that the the agent holds on a property?
If a landlord employs an agent can the agent be held responsible for breaches of the expensive license held be the landlord?
Who does the council sue if they find a breach of regulation? Would it be the agent without a license who would counter claim on the landlord. Could a landlord with the license sue an agent for breach of duty.
If a company owns the property they could have a legal department big enough to sue the council for being incompetent.
This list is endless.
With all this confusion only one bit of normality will remain. Bad tenants need to be evicted quickly before they cost the landlord serious money and many tenants will endure small problems without complaint just to have a more simple life.
Are you a lawyer? Its time to staff up a nice big office in Newham or Liverpool and rake in the cash.
Wales has identified a cash cow, other councils will too especially those with big deficits in their funding.
Them making the landlord or agent responsible for the tenants behaviour doesn't automatically give the landlord/agent the power to deal with it or enforce it. I see a clash with the judiciary ahead
Robin Wales has a hidden agenda. He wants landlords to sell up so he can buy properties cheaply to meet his pledge for LA properties which he has missed by 5000 units. He is a Red Ken clone. Next will be rent capping.
"Wales told the BBC: “When we consulted our residents, a massive majority were in favour of this. The bad behaviour occurs in the bad properties – the anti-social behaviour, the mess in the garden. We need to go after them.”
Wales, how many landlords live in these houses with the TENANT? What none. So how is licensing the landlord going to change the behaviour of the social retards in our society. Its not, and more to the point when a property is occupied it’s the occupant that is responsible for "rubbish in gardens" not the landlord regardless of licensing. In respect of ASB, the licensing legislation is just as woolly as the housing act is itself on this point. A landlord has merely to take reasonable steps to prevent it. I told them not to do it your honour, what more can I do.
Where will these people go, Wales?
The real problem with these councils is they don’t have the funds to run anything properly, so where all going to get to pay for them to play around with these new powers which are completely un-necessary bar the revenue.
Good points well made.
This is an empire building money making excercise when enforcing existing laws would be more effective and cheaper.
However, In my view, if licensing was introduced in an area, only a really stupid agent would become a licence holder.
Docklands Agent
Think yourself lucky if you were a licence holder then the LA would serve the Enforcement Order on you for any works - and if still not completed would do them and then bill you. No good bleating that the LL hasn't got the money to pay you.
Robert Nicholls may I give you a bit of advice. The article seems to imply you think the agent should be the licence holder I don't know if that is correct or not but if the licence is in the agent's name it is a big weapon to tie the LL to you.
However it also means the agent is in the direct firing line with the licensing authority. If I was you I'd have the Landlord as licence holder every time
The biggest flaw in the scheme, assuming everyone joins, is this: The license will be obtained by the owner or a manager employed by the owner.'
We have has situations where we have insisted on works such as remedying damp, the Landlord has disagreed - the tenant suffers - we protest, get sacked and the Landlord manages it himself.
One bad landlord under the radar.