Southwark Selective Licensing – and My Views on Licensing

Southwark Selective Licensing

And so, it finally happens.

By hook or by crook and some boxing clever we have managed to avoid all forms of licensing – both the HMO varieties and the Selective Licensing variety.

Until now. Now, the game is up.

Funny name isn’t it, “Selective Licensing”? Because usually when it is done, a local authority does it for every part of its borough, as Southwark has indeed appeared to have done, so it hardly appears to be “selective”.

Of course, these money making and empire expanding schemes are growing like a cancer all over the land, despite sporadic brave local push back by landlords and others. Even when they succeed in pushing back, the local authority has another go a year or so later, until the landlords are worn out and surrender.

So, what is my beef with them?

Well, it’s that they appear to me to be too often unfocussed on the real problem – that of the criminals masquerading as landlords.

The Southwark Selective Licensing Scheme

When I looked at the Southwark scheme it was not clear to me whether the discount available for “Gold Standard Landlords” (more on that below) was in addition to the discount for early bird applicants. And so, I emailed them to find out. This was at 515pm one evening. I did not expect a response, being already 15 minutes after the witching hour for civil servants, so was surprised when I got one almost straight away. It was in addition, so all good there.

So, I then straight away asked what proportion of the net revenues from the scheme would go to checking up on landlords who had already submitted applications and what proportion would go on intelligence activities targeted on identifying those let properties for which no application had yet been received?

I got a reply two days later to this, more on that later.

So how does the scheme work?

Well, you need to apply “from 1 November 2023”, but they are open for applications from 1^st October and from then until 31 January 2024 you can get a 30% discount on the fee.

The normal fee is a whopping £900, which is supposed to cover you for five years. As the discount is available up to 31 January, I think I will leave off applying until just before then, thanks!

You can get another £130 pounds off if you are a Gold Standard Charter Landlord. To be one of these, I would need to get accredited through my membership of the NRLA, (the National Residential Landlords Association), though doing something similar via other schemes is possible. (It just so happens that I am an NRLA member).

To get accredited, it seems I must do one of the courses the NRLA offers, which ought to be a cinch for me, I just hope there is no fee for that, and it can be done online. If not, I cannot be bothered.

I also must meet several requirements that Southwark set out too, which appear to me to be no more than a good landlord should be doing anyway, though I take issue with their odd requirement that the rent can only be adjusted very two years. So, as I like to adjust mine every year, (who doesn’t?), that may be one more reason why I won’t pursue this Gold Standard Charter thing anyway.

Oddly, no refunds are available if you sell the property or just stop letting it within the five-year term, which seems a bit mean. Imagine an insurer telling you there was no refund if you cancelled a motor or home insurance policy one month after renewal!

And heaven help if you are not connected to the online world. If you don’t supply the completed form online, you must pay another £218 on top, which includes a fee of £55 for people who don’t want to or are unable to make an online payment. This chunky fee suggests to me either that the form must either be very long, hence requiring a long time to re-input or that they are paying the staff (who presumably must do the re-input) far too much money.

So, what is on the form?

Well, obviously, I have not done it yet – and won’t be until the deadline, but they tell me they want to know room sizes, they want a floor plan (a pencil drawing will suffice apparently), they want info on the property structure, information on safety equipment (whatever that is) and they want to know about the “facilities” (whatever that is too).

They also want to know about interested parties to the property. Not sure what they mean by that – maybe any mortgage lender interest, managing agents (for flats), letting agents (if you have one) and maybe the tenants’ details.

I am sure they want a lot more than just those pieces of information too. That is probably just the basics.  

They say they “may contact you to arrange a risk assessment to inspect the property”. I wonder how many of these they do and how they are triggered?

There are up to £30,000 fines for not having a license when you should.

Well, I hope they do not impose any fines on unlicensed landlords straight away. That would seem ridiculous to me – as the only reason I happen to know about the scheme is because it is my job to follow these things as an expert in the private rented sector.

Southwark ought to know I let the property because my address for council tax communications is different from that of the property, but have they written to me about the advent of this scheme at all?  Nope, they have not.

So how are ordinary mortals with normal lives supposed to know about the existence of this scheme? God knows!

Southwark Selective Licensing – My Issues with this Scheme and Similar Ones

Anyway, back to my beef about these schemes.

My view is that the trouble with these schemes is that they spend too much time box ticking all the decent landlords who dutifully send in the applications for licenses – and maybe going out on checking on some of them, whilst doing very little in terms of acting on intelligence and tip offs received about criminals illegally letting very dangerous and often overcrowded accommodation.

Many of the worst type of accommodation are let to illegal immigrants who know they cannot complain to the authorities lest they end up losing whatever measly quality of life they have here and possibly being sent home, after many years on a barge in Dorset, (if they get unlucky).  

And so many licensing schemes in my view are just window dressing, making it look like the local authority is doing something.

All it is doing is setting up a bureaucracy with lots of people employed checking license applications from decent landlords. Someone must manage this whole new department and no doubt gets very well paid.

Southwark claim they are using some intelligence based approaches for going after the real rogue landlords in the “Southwark mists”. They sent me this paper to look at. The relevant bit about what they are doing to actively spot the rogue landlords who, of course, will never apply is on page 19 and 20. https://moderngov.southwark.gov.uk/documents/s102239/Report%20Driving%20up%20Standards%20for%20the%20private%20rented%20sector.pdf

But still nothing in there about how much of the budget gets spent on this part of the work, as opposed to processing the applications of the (presumably) good landlords who do apply. And when I asked them this specifically via email, they said they did not know and it was not something they were going to find out either.

Oh, and the total revenues (and costs) of both HMO and Selective Licensing in Southwark is £1.9m over five years, of which £0.5m is for the Selective Licensing part of the scheme.

So good landlords must pay the license tax, remembering to fit that in with all the other admin they must do – and they will just pass on the increased cost to their tenants in higher rents. And I suspect that most of the criminals letting awful and unsafe properties will continue to remain in the shadows.

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