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The Blind leading the Blind - Selective Licensing Scheme Update

I’m sure you have all been keeping up with our updates regarding the pending Selective Licensing in Nottingham, however a lot has gone on this week and below is an update of what is known to us thus far…

I have attended a number of meetings with the council, together with the East Midlands Property Organisation and I have a further meeting with the housing team this coming Thursday. What isn’t changing is the start date of the licencing which has been confirmed for the 1st of August, however at this point the housing department and the licencing department are yet to agree on the full extent of the licencing terms.

To recap on what we know so far…


It was announced on the 18th April 2018 that Nottingham City Council has had approval and is implementing a citywide Selective Licensing scheme, commencing on the 1st August 2018.

Nottingham City Council has said the aim of the scheme is to ‘raise the standards in the privately rented sector, and to ensure that all tenants living in them are able to enjoy a safe, comfortable and well managed home’. We fully support this notion, however the fact that the councils own properties do not need to conform to the same standards is exactly why this implementation has been met with such resistance.
 

  • The scheme will impact over 30,000 properties across the city & will be a legal requirement for each property a landlord owns within the City catchment.
 
  • Failure to apply for a license will result in a fine of up to £ 30,000.00
 
  • The cost for each license will range from £ 480.00 to £ 780.00 per property.
 
  • All applications need to be carried out on-line from 1st July 2018 & completed applications need to be submitted to the Council by 1st August 2018.


It isn’t all bad though, as with every increase in standard, there is an increase in cost and we are already seeing the value of rental properties increase throughout the region. The other factor that will bode well for the industry is that demand for rental properties, both within the private rental market and for the social housing markets continues to out-strip supply on almost a 7-1 basis. We have also seen a significant uplift in the entry level cost of housing within the city over the last 3 years and all of this is a problem for the councils and is the most likely cause for the need to generate income.

It’s bark is also worse than its bite, for most landlords the one-off cost of the license, spread out over 5 years will equate to less than 1.5% of their actual yield and this is of course  before you take in to account the cost of the license also being tax deductible.  So, yes - this is inconvenient and a clear revenue maker for Nottingham but its unintended benefit, when used as projected it will serve to boost yield and property values throughout the region and we can see that the future requirements for licencing will extend to neighbouring regions as it already exists in Norwich, Newcastle, Liverpool and Doncaster.

We have added a link below where you can check whether your property is covered by the proposed license scheme through the Nottingham City Council website by following the link below:

http://geoserver.nottinghamcity.gov.uk/myproperty/

Each license will last for 5 years and is non-transferable & a discount for landlords with multiple properties has not been offered.

Image result for selective licensing

 

So what are we doing to help?

So we are considering the options of becoming the license holder for the entire managed portfolio of landlords/properties. This will eliminate the requirements for each landlord to become individually licensed and will also enable each managed landlord to benefit from the reduced cost of application.


However, this responsibility would come with a significant commercial risk and it would assume overall liability for fines and prosecution for any breaches and as a commercial entity this carries a far greater liability than that of an individual and not only would our terms of business need to be altered to but also our ability to act should the regulations change during the term of the license to ensure properties continued to be compliant.

We will also need to review the level of interest our landlords have in the potential for this level of service.  

It will however unfortunately be impossible for us to offer this level of commitment to our 'tenant find only' landlords as we are unable to track the on-going conditions of a property during the term of the license. As a tenant find only landlord you will also need to register with the Information Commissioner’s Office (ICO) to become GDPR compliant as of the 25th May 2018, however as your managing agent we have already taken care of this individual responsibility for our managed landlords. If any Tenant Find Only Landlord’s would like any further information regarding these obligations please do get in touch with us.

*Further talks with our commercial insurers and solicitors will be required before any further announcement can be made in this regard but please do let us know if any landlords would be interested in us taking on this additional level of ongoing responsibility.

Belvoir lettings have ensured that the properties operating under their fully managed service already comply with the current regulations, however detailed below are the 7 (highlighted) proposed additions that are expected to become subject to the licensing as of the 1st August. Confirmation of these requirements is expected from the council later this month which will definitively confirm ‘The Nottingham Standard requirements’

Image result for nottingham housing

 

1) Gas Safety Certificate dated in last year.

2) (NO LONGER REQUIRED) A record of a visual inspection or PAT test for electrical appliance safety.

3) Electrical Installation Certificate dated in the last 5 years.

4) Smoke alarms / fire detection systems installed on each floor and working.

5) Testing certificates recorded for Emergency Escape Lighting (if applicable)

6) Carbon monoxide detector installed in every room which contains a solid fuel burning combustion appliance.

7) Maintenance issues are responded to in a reasonable time with a 24-hour contact number to be given.

8) The property is kept in a good state of repair and free from significant hazards that could affect the health and safety of tenants, occupiers and visitors to the property.

9) The exterior of the property is maintained in a reasonable decorative order and in a good state of repair.

10) The exterior of the property and boundary walls, fences and gates etc. are kept free from graffiti.

11) Ensure gardens, yards and other external areas are within the boundary of the property.

12) Ensure the property is secured.

13) Provide window keys when required

14) If there is a burglar alarm, a code and instructions to be given.

15) If previous tenants have not provided the keys back arrange for the locks to be changed.

16) (NO LONGER REQUIRED) The main escape route (usually the front door) must be fitted with a thumb turn mortise lock, or equivalent, to five-lever security level

17) Provide written information to tenants on refuse collection day, what type of bin to use, details of the Council’s bulky waste collection, ensuring that council bins have been provided

18) The tenants have a right to quiet enjoyment of the property therefore 24 hours written notice before you enter the property unless in an emergency.

19) Carry out inspections every 6 months and keep written reports.

20) Provide written information on how to contact the landlord regarding a complaint.

21) Respond to complaints within a reasonable time.

22) Provide the tenant with a copy of the license.

23) Provide copies of the current gas, electrical safety and energy performance certificates

24) Provide a written copy of the tenancy agreement

25) References are from each tenant

26) Provide a written statement about tenants’ responsibility for not causing anti-social behaviour and that breach of the requirement may lead to eviction. In doing so all reasonable and practical steps are taken to prevent or reduce anti-social behaviour. Provide a written statement on how this will be dealt with. Also investigate anti-social behaviour when complaints are made and inform relevant authorities.

27) Suitable buildings insurance is in place which should rehouse a tenant. This should cover the costs of re-housing occupiers in the event of the need arising.

28) Carry out an inventory check before the tenant moves in. Document with photographs and have the tenant sign it

29) Provide a tenant with information on the deposit scheme used.

30) Inform the council of any changes to the license holder’s details, including: address, change of management or ownership, anything that could affect their ‘fit and proper person’ status, any proposed changes to the layout of the house

31) The license holder must ensure they are undertaking relevant training at least once every 3 years. This could be through a us or other bodies such as DASH or EMPO or NCC

32) Ensure relevant documents are submitted to the council on request

 

Individual Landlord Accreditation:


For landlords with accreditation such as Dash or Unipol the selective license fee is reduced from £780 - £480. However the additional cost of the accreditation means that there is little benefit in becoming accredited if you do not own more than one rental property.


Image result for dash accreditation
You will not need to hold accreditation to be able to apply for a license, however Landlords who obtain accreditation will receive a discount on their license fee.

Please find again the link to the accreditation scheme DASH below.

https://www.dashservices.org.uk/Accreditation


Nottingham City Council’s over all aim is for all accredited properties to be of a ‘Nottingham Standard’ please see below for more details.

https://www.nottinghamcity.gov.uk/housing/private-sector-housing/the-nottingham-standard-for-landlord-accreditation/

 

The License is going to be allowed to be paid in two instalments of £460 and £320 details of this has not been clarified but once again once we know we will keep everyone informed.


Other useful links:


1. http://documents.nottinghamcity.gov.uk/download/5841

2. http://documents.nottinghamcity.gov.uk/download/5604

3. https://empo.co.uk/empo-news/nottingham-city-councils-executive-board-update-selective-and-hmo-addtional-licensing.html

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