Overview:

• Recent research from Direct Line indicates a growing number of selective licensing schemes being imposed by local councils in England, increasing costs for landlords.
• Selective licensing schemes require landlords to obtain a license for renting out properties in certain areas, with fees varying significantly across councils.

Key Findings:

1. Increase in Selective Licensing Schemes:
   • 47 councils (out of 245 that responded to Direct Line’s FOI request) currently have selective licensing schemes, up by almost 10% from 2022.
   • Councils like Peterborough, Merton, Charnwood Borough, and Birmingham have introduced these schemes in the past two years.
2. Cost of Selective Licenses:
   • The average cost for a selective license is approximately £700.
   • Fees vary widely, with Leicester City Council charging the highest at £1,290 and Ashfield District Council the lowest at £350.
3. Councils with the Highest Costs:
   • Leicester City Council: £1,290
   • Newcastle upon Tyne City Council: £900
   • London Borough of Greenwich: £858
   • Oadby & Wigston District Council: £840
   • Middlesbrough Borough Council: £823
4. Revenue Generated:
   • In 2023, councils in England generated over £20 million from selective licensing schemes.
   • Liverpool City Council raised over £5 million, accounting for a quarter of the total UK revenue from these schemes.
   • Other councils with significant revenues include London Borough of Enfield (£4.5m) and Nottingham City Council (£3.3m).
5. Enforcement and Fines:
   • Landlords failing to comply with licensing requirements face substantial fines. For instance, Burnley council issues fines up to £10,000.
   • In 2023, councils raised £2.5 million from fines, nearly double the amount from the previous year.
6. Councils with the Highest Licensing Offences:
   • Waltham Forest: 170 offences in 2023
   • Middlesbrough: 128 offences in 2023, leading in 2024 as well
7. Changes and Closures:
   • Since 2020, seven councils, including Hartlepool, Sheffield, and Coventry, have closed their selective licensing schemes due to improved market standards.

Implications for Landlords:

• The increasing number of selective licensing schemes and associated costs pose financial challenges for landlords.
• Non-compliance with licensing requirements can lead to hefty fines and legal issues.
• Landlords need to stay informed about local licensing requirements and budget for these additional costs to avoid penalties.