Friday, 1 October 2010

Government’s Selective Licensing of Landlords Fails Tenants

The lack of regulation of landlords is leaving tenants exposed across the UK, according to the Association of Residential Lettings Agents (ARLA).

The Government recently abandoned plans for regulation of the Private Rented Sector (PRS) and cited Selective Licensing powers as security enough to protect tenants.

These powers allow local authorities to monitor and regulate landlords in areas of low housing demand or which experience high levels of anti-social behaviour.

However, according to ARLA’s research, only 12 out of some 400 local authorities have used these powers to introduce Selective Licensing to date.

And across these local authorities, ARLA’s research shows that only fifteen landlords have been prosecuted for failing to comply with the licensing requirements.

This is despite schemes which have been operational for several months having already identified landlords that are not fulfilling their responsibilities.

ARLA has also discovered inconsistencies around the implementation of Selective Licensing, with local authorities enforcing the legislation on a region-by-region basis.

Ian Potter, Operations Manager of ARLA, comments: “ARLA’s research highlights the low number of prosecutions and the inconsistent means by which Selective Licensing is enforced, and the need for a national scheme to regulate the PRS.

“The Government’s argument that Selective Licensing allows local authorities to deal with the problem of rogue landlords does not stand up to scrutiny. Only a small number of local authorities operate Selective Licensing schemes and these have led to very few prosecutions for those landlords who do not carry out their obligations.

“We again urge the Government to re-examine Selective Licensing, and as a bare minimum, strengthen the obligations of local authorities and landlords to provide adequate protection for tenants in the Private Rented Sector.”

Editor Notes:

About ARLA

The Association of Residential Lettings Agents (ARLA) was formed in 1981 as the professional and regulatory body for letting agents in the UK. Today ARLA is recognised by government, local authorities, consumer interest groups and the media as the leading professional body in the private rented sector. ARLA is a sister organisation to the National Association of Estate Agents (NAEA).

In May 2009 ARLA became the first body in the letting and property management industry to introduce a licensing scheme for all members to promote the highest standards of practice in this important and growing sector of the property market. Both ARLA and NAEA members are governed by Codes of Practice providing a framework of ethical and professional standards at a level far higher than the law demands, and both Associations have their own complaints and disciplinary procedures so that any dispute is dealt with efficiently and fairly.

For further information contact:
Tel: 020 3128 8181

Association of Residential Letting Agents
Briefing on Selective Licensing - Graham Jones MP

Executive Summary

-        The Government has abandoned plans for regulation of the Private Rented Sector as it believes Selective Licensing powers provide adequate protection to tenants
-        However, only 12 out of 433 local authorities have operational Selective Licensing schemes
-        Out of these local authorities, only 15 landlords have been prosecuted for failing to fulfil their responsibilities
-        Many local authorities still report high incidences of anti-social behaviour, despite possessing these powers
-        These responses highlight the need for government-led regulation of the PRS

1.  Selective Licensing

Part 3 of the Housing Act 2004 made provision for local authorities to introduce selective licensing to deal with specific problems in the Private Rented Sector.

Selective licensing can be applied by local authorities to areas of low housing demand or where there are persistent levels of anti-social behaviour in order to regulate landlords in that area.

Selective licensing schemes are highly targeted measures, in place to tackle the most severe problems in the Private Rented Sector arising in poor management of properties.

The Government has announced that it has abandoned plans for national regulation of the Private Rented Sector, in part because it says there is adequate protection for tenants through Selective Licensing in areas where the Government believes there are issues of concern.

ARLA has identified that only 12 out of 433 local authorities in England currently have used central government powers to introduce Selective Licensing.  We therefore submitted Freedom of Information requests to these 12 local authorities requesting information on the success of the various schemes.

2.  Summary of results

Outlined below are statistics obtained from ARLA’s Freedom of Information Requests:

Local Authority
How many licences have been issued due to (a) low housing demand or (b) anti-social behaviour
How many prosecutions have been issued under (a) or (b)
Blackburn & Darwen Borough Council
(a and b) 298
Bolton Metropolitan Borough Council
(a and b) 113
Burnley Borough Council
(a) 260
Easington District Council
(a and b) 52
Gateshead Metropolitan Borough Council
(a) 299
Hartlepool Borough Council
(a and b) 101
Leeds City Council
(a and b) 137 & 246 being processed
London Borough of Newham Council
(b) 22 & 72 being processed
Manchester City Council
(a) 3,997
Middlesbrough Council
(b) 440
Salford City Council
(a and b) 908
Sedgefield Borough Council
(a and b) 297

3.  Conclusions

The conclusions which ARLA has reached from the local authority responses are:

-        Only 15 landlords have so far been prosecuted for failing to fulfil their responsibilities under selective licensing, despite hundreds of licenses being introduced in each area

-        Anti-social behaviour remains a continued problem, even in the areas where selective licensing has been introduced

-        The criteria for introducing enforcing, and monitoring selective licensing schemes is decided independently by each local authority, meaning that there is no joined-up approach or direction from central government

-        Some selective licensing schemes have been operational for over three years and appear to have made little progress in monitoring schemes or prosecuting landlords

About ARLA

ARLA was formed in 1981 as the professional and self - regulatory body for letting agents in the UK.  Membership of ARLA is achieved only by agents who demonstrate that they have a thorough knowledge of their profession and that they conduct their business according to current best management practice.

The National Federation of Property Professionals (NFOPP) is the collective name for a number of property related membership organisations including the Association of Residential Letting Agents (ARLA) and the National Association of Estate Agents (NAEA), and has a combined membership of just under 14,000.  The ARLA and the NAEA are the UK’s leading professional bodies in the sales and letting sectors of the property market.

For further detail please contact Ian Potter, Operations Manager, ARLA.
Direct Line: 01926 417350 – Email: