Recommendation 4

Local Authorities are constrained by the Department’s approach to licensing landlords. In 2010, the Department introduced legislation allowing local authorities to require licences from landlords for more properties that the minimum requirements (the only properties that need licenses are larger houses in multiple occupation—those with at least five people from more than one household). However, these licence schemes are subject to Secretary of State approval if they cover over 20% of a council’s local area or rented housing stock. The Department told us that local authorities find selective licensing to be a useful tool for proactive enforcement action and intelligence gathering. However, to apply for a licensing scheme, local authorities need a good understanding of their local private rental market, which is hard to gather without already having a scheme in place. The time and resource needed to produce an application, and the requirement for schemes to last only five years, present further barriers to local authorities. The Department says it offers a dialogue with local authorities to help them apply for licensing schemes, but local authorities say there is poor communication and limited feedback. Given regulation is managed and delivered locally, it is not clear why the Department restricts the use of larger schemes or on what basis it rejects them. Recommendation: As part of its planned reforms, the Department should assess whether current arrangements for licensing schemes are working, and whether alternative arrangements may be more efficient and effective.