A Labour-led local authority is facing legal action from landlords after introducing what many are calling “punitive” selective licensing fees—raising fresh questions about how councils are using their expanded powers.

What’s Happening in Leicester?

Leicester City Council is charging landlords £1,290 per property under a newly introduced selective licensing scheme. The charge applies per unit, regardless of property condition or previous compliance, leading to accusations that the fee is effectively a “landlord tax.”

Leading letting agency Martin & Co, supported by JMP Solicitors, has initiated legal action after being approached by dozens of landlords. The firm claims:

• The fee is disproportionate to average local rents (£989/month).

• It is inconsistent with comparable authorities (e.g., Newham charges £750 despite far higher rents).

• The implementation lacks clarity and transparency.

More than 60 landlords have joined the case, with expectations that the number will soon exceed 100.

The Legal Backdrop

Under the Housing Act 2004, local authorities may impose selective licensing on private rented properties in areas deemed to suffer from low housing demand or significant antisocial behaviour. However, a rule change in December 2024 gave councils free rein to introduce borough-wide schemes without Secretary of State approval.

This shift has raised alarms:

• No national oversight now exists over how fees are set.

• Councils are free to implement schemes without considering rental market impact.

• Councils such as Hackney and Wandsworth have announced licensing fees ranging from £1,400 to £1,647, far above historical norms.

Industry and Political Reaction

• Jason Smart (JMP Solicitors) calls the fees “penal, sporadic and inconsistent,” citing inadequate justification via a Freedom of Information request.

• Kevin Hollinrake MP, Conservative shadow housing minister, accused Labour councils of using the powers as a “licence to print money” and warned of unintended rent increases.

• Samantha Watkin (NRLA) voiced industry-wide concern that such schemes are “blunt instruments” that fail to tackle rogue landlords and instead penalise compliant ones.

Licensing Landscape Snapshot