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:
Each license will last for 5 years and is non-transferable & a discount for landlords with multiple properties has not been offered.
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’
1) Gas Safety Certificate dated in last year.
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.
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.
Nottingham City Council’s over all aim is for all accredited properties to be of a ‘Nottingham Standard’ please see below for more details.
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: