Landlord Licensing in Oxford
Oxford City Council has launched a public consultation on two licensing schemes aimed at improving conditions in the private rented sector (PRS). Following agreement by the cabinet on 9th September, the council is seeking views on its intention to:
Extend the current ‘additional’ licensing scheme for houses in multiple occupation (HMOs) until 2026
A house in Multiple Occupation (HMO) is a property rented out by three or more people who are not from one ‘household’ (e.g. a family) but share facilities such as the kitchen and bathroom. In 2011 Oxford became the first council in England to introduce a citywide scheme requiring every HMO to be licensed, ensuring the property meets safety standards among other things. The current scheme is due to expire in January 2021 and consultation is required as a condition of renewing the scheme for another five years.
Introduce a new ‘selective licensing’ scheme to cover all privately rented homes in Oxford
If 20% of homes in an area are privately rented, then the council can introduce ‘selective licensing’, allowing existing licensing powers to be extended to all homes in the PRS in Oxford. If the consultation is in favour of selective licensing, the final scheme will need to be approved by the government. If it is, a self-financing scheme for selective licensing could be put in place for five years in late 2021 or early 2022.
Professionalising the sector
Licensing landlords would be a positive move towards professionalising the sector and would lead to improvements in housing conditions and safety. For example:
- Licensed properties which are deemed unsafe can be dealt with more effectively because landlord contact information is readily available
- Landlords would be required to inspect the property at least every six months
- It would be easier to ensure that landlords are compliant with gas, electrical and fire safety
- Convicted landlords will be found “not fit and proper”
In our experience, the properties in the best condition attract the best tenants at the best rents so anything which helps improve the standards of property would be a good thing for both landlords and tenants in the long run.
The aim of licensing is to help protect tenants, drive up standards and crack down on rogue landlords, however licensing itself is not a universal solution. There are many regulations already in place to ensure rental properties are safe and “fit for human habitation” so the issue appears to be around enforcement. How will the council impose these licenses on the landlords who are considered ‘rogue’ (nearly every local authority reports finding more privately rented properties than anticipated1) or prevent them letting once they are banned?
When the Tenant Fees Act was brought in there were claims it would immediately lead to a rise in rents, with landlords passing on any extra costs back to the tenants through their rent. We disputed this at the time and we would say the same again here: it is not quite as simple as just increasing the rent – particularly if tenants are not prepared to pay it.
A more likely consequence could be that landlords see this licensing as another blow from the government, making being a landlord less attractive. If landlords leave the sector, then supply of rental properties reduces and – as in all markets – price is likely to be impacted. As Oxford has one of the highest proportion of rented homes in England (49.3% of homes in the city are in the PRS2) the council needs to consider the potential impact of putting landlords off being landlords in this city.
Douglas Lloyd, Associate Director, says, “People coming to Oxford from overseas might only be here for a year – maybe three – and they want to rent property, they don’t want to buy. We have to ensure that there is adequate stock for the demand. If being a landlord isn’t a successful business for them then landlords are less likely to want to do it, which could impact supply.”
Participating in the consultations
Members of the public can find more information and take part in the consultations at www.oxford.gov.uk/propertylicensing