If you’re currently a buy-to-let landlord, or are thinking of investing in property to rent out, then are you up to date with your knowledge on local landlord licensing? With a growing number of councils in the UK introducing more licensing rules and regulations, it’s important to ensure you’re on the ball and in the know. Here’s an insight into what all buy-to-let landlords need to know abut local licensing.
What is local landlord licensing?
Local landlord licensing is, as the name suggests, a form of licensing for landlords that has been brought in by local councils in the UK. It doesn’t replace the standard mandatory licensing that the government enforces (for House in multiple occupation (HMO) properties), but rather it runs alongside it.
The idea behind local landlord licensing is that it will help to improve standards in private rented properties, but for landlords it means more information to keep on top of.
What’s even more confusing is that local licensing isn’t a standard procedure in all areas. Councils in the UK are gradually choosing to opt in and introduce their own licensing schemes, but the situation varies in different counties. For buy-to-let landlords with multiple properties located in different areas, this can be a minefield to keep up with, not least as it’s easy to miss when a council opts into the scheme.
There are two main types of local licensing that councils can implement – additional and selective licensing.
Additional licensing
Under the 2004 Housing Act, local councils are allowed to adopt additional licensing if they believe that houses in multiple occupation (HMOs) aren’t being managed efficiently.
As a landlord, if your council adopts additional licensing, you’ll need to apply for a license. The cost varies around the country, but will typically set you back about £500 – £600.
Selective licensing
Unlike additional licensing, selective licensing applies to all landlords in an area, not just those who let out HMOs.
Landlords need to apply for a license and, prior to providing you with one, the local will undergo a series of checks to ensure both you and your property meet their property and tenant regulations.
In some parts of the UK, councils have adopted the use of a landlord charter that you’ll need to sign up to before being granted approval. Plus, the license itself comes with a cost, of around £500 – £600.
If you don’t abide by the council’s rules and regulations for selective licensing, you could be at risk of a penalty fine of up to £30,000.
Which areas of the UK have local landlord licensing?
The very nature of local licensing – the fact that it isn’t standard everywhere and that councils are gradually introducing it – is naturally confusing for landlords. If you’re unsure if it applies in your area, the obvious first port of call is your local council to check. The last thing you want to do as a property investor is to fall foul of the rental rules in your area.
It’s also worth keeping in mind that organisations such as the Residential Landlords Association are recording details of all areas where the local licensing is required. This is especially useful if you’re thinking of branching out and purchasing properties in different areas and want to check what legislation is involved before you go ahead with your plans.
