Today's blog is by Richard Tacagni of London Property Licensing, specialist in helping residential landlords make sense of London property licensing.
Southwark Council is the latest borough set to implement new licensing schemes for private rented homes.
On 21 July 2015, the Council’s Cabinet approved borough wide additional licensing plus a network of smaller selective licensing areas spread across the borough. Both schemes will go live on 1 November 2015.
According to the Council, Southwark’s private rented sector has seen rapid growth and about 70,000 people now live in private rented homes – about a quarter of all residents.
The Council says that whilst much of the sector provides decent accommodation and is well managed, there are problems associated with parts of the sector arising from poor management, poor property conditions and issues of anti-social behaviour.
The Council says that their enforcement activity involving multiple occupied properties has increased by 289% over the past 5 years, leading to a 500% increase in the number of HMO prosecutions over the same period. Research by London Property Licensingplaces Southwark in the top five London councils when it comes to taking housing prosecutions.
Additional HMO licensing
The additional licensing scheme will extend House in Multiple Occupation (HMO) licensing to all HMOs in the borough. Every private rented property shared by three or more people who are not all related will need to be licensed – an estimated 10,000 properties.
In certain parts of the borough, a new selective licensing scheme will extend property licensing to all private rented homes – including houses and flats rented by an individual or single household.
The scheme designation says it “…includes but is not limited to Walworth Road, Camberwell Road, Camberwell New Road, Camberwell Green, Coldharbour Lane, Denmark Hill, Camberwell Church Street, Bellenden Road, Southampton Way, Old Kent Road, Meeting House Lane, Queens Road, Rye Lane, Evelina Road, Lordship Lane (North), Lordship Lane (South)”.
Yet further investigation by London Property Licensing has found that the selective licensing scheme is far bigger than at first appears. The scheme extends across seventeen distinct areas including 134 streets and is estimated to include up to 5,000 properties.
This is one of the most complex licensing schemes to date and landlords and letting agents will need to study the arrangements very carefully.
Whilst the selective licensing fee has been set at £500 / property for up to five years, the additional licensing fee for HMOs has been set at £250 / bedroom, making it £1,250 for a five-bed shared house for up to five years. This will become one of the highest additional licensing fees in London.
Landlords who apply within the first six months will receive a 20% discount, with a further 20% discount offered to accredited landlords.
The council says there will be an online application process and all properties will be inspected before a licence is issued.
Councillor Richard Livingstone, cabinet member for housing at Southwark Council said:
"With the rapid expansion of the private rented sector in Southwark, it is vital that we’re on the side of private sector tenants and those responsible landlords who provide a good standard of housing, particularly where children are concerned. We just want to make sure this is the experience of everyone residing in a private property in Southwark.
"On its own licensing will not solve the issues created by poorly managed private rented accommodation. But it’s a step towards ensuring that rogue landlords are held accountable and curbing anti-social behaviour."
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As always I love feedback, comments and so forth so do get in touch if you're interested to speak further. On that note I have some interesting opportunities for sophisticated investors - if you are looking to invest in property and are looking for good returns then please drop me a line and start the conversation; I have a few projects which need funding and I am still looking for an investor in order to get it off the ground.
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