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Renting rules revealed: how do I know if I need a licence?!

November 2, 2016Tags: buy-to-let | letting | lettings | Landlords

Licensing can apply to both properties and landlords, and it’s quite a complicated thing to keep track of. It’s been brought in over the last decade in an effort to improve the standard of rental properties and to help weed out rogue landlords and agents who aren’t letting and managing them properly.

The problem for you as a landlord is that -  like so much property legislation – licensing has both national and local regulations. That means one council area can take an entirely different approach to the next one. And with 393 local council areas within the United Kingdom – 326 in England alone - it can be very hard to keep up with what applies to you, especially if you’re a portfolio investor with properties in several different locations.

There is only one national licensing law and that’s for Houses in Multiple Occupation (HMOs). All HMOs in the UK must be licensed if they’re three or more storeys AND occupied by five or more people, forming two or more households. Then local councils have the power to impose additional licensing rules for HMOs and selective licensing schemes for other properties, such as single lets. 

Some councils make it more complicated by having different licensing schemes for different parts of their area. For example, in Burnley (Lancashire), there are three designation areas where additional licensing schemes apply for certain streets and then they’re introducing schemes in three more areas from 15th November 2016. A total of 13 new schemes have been introduced so far this year in England and Wales (six selective and seven additional) and seven more will be introduced for certain areas in the last three months of 2016. 

Money-wise, licenses can cost anything from around £550 (additional licensing in Cardiff) up to around £1400 (Kensington & Chelsea) for an ‘average-sized’ property. They usually last for 5 years.

Councils also have the power to introduce landlord licensing. These are already in place across Scotland and N.Ireland (although are sometimes referred to as ‘registration’) and will be required by the end of November 2016 for any landlords in Wales who want to self-manage. Around 40 areas in England currently operate landlord licensing or registration schemes, including Liverpool, which has the largest in the country and has just entered into a co-regulation scheme with the Residential Landlord Association to give landlords discounts. 

Even if you’re in an area where you don’t currently need any licences, do check whether there are any plans for licensing to be introduced in the future so you can plan ahead. Speak to your local council housing department or you can come and speak to us in your local branch any time. Our lettings experts are always kept up to date with any upcoming changes in legislation and we’ll be happy to advise you on what steps you need to take and the costs involved.


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