News

Southwark’s new landlord licensing scheme delayed

Tuesday, October 20, 2015

In a surprise development, we can reveal that Southwark Council’s additional and selective licensing schemes that were due to be implemented in less than 2 weeks time have been delayed.

As we originally reported in August 2015 (read here), Southwark Council’s Cabinet had approved borough wide additional licensing plus a network of smaller selective licensing areas spread across the borough. Both schemes were due to come into force on 1 November 2015. 

London Property Licensing has since discovered that on 7 October 2015, the Council’s Strategic Director of Environment and Leisure approved a report delaying both licensing schemes until 1 January 2016.

According to the report, the council was concerned about the risk of a legal challenge if they did not provide the opportunity for landlords to apply for a licence before the scheme started. Failing to provide a lead-in period could have restricted landlords’ ability to use the Section 21 notice of seeking possession procedure to end a tenancy.

In the report, Southwark Council acknowledged they would not be ready to start accepting applications before 1 November as their back office systems would not be ready in time.

We understand that the council will now start to accept applications on 1 November 2015, with the schemes due to come into force on 1 January 2016.

Background to the schemes

According to the Council, Southwark’s private rented sector has seen rapid growth and about 70,000 people now live in private rented homes – about a quarter of all residents.

The Council says that whilst much of the sector provides decent accommodation and is well managed, there are problems associated with parts of the sector arising from poor management, poor property conditions and issues of anti-social behaviour.

The Council says that their enforcement activity involving multiple occupied properties has increased by 289% over the past 5 years, leading to a 500% increase in the number of HMO prosecutions over the same period. Research by London Property Licensing places Southwark in the top five London councils when it comes to taking housing prosecutions (read here).

Additional HMO licensing

The additional licensing scheme will extend House in Multiple Occupation (HMO) licensing to all HMOs in the borough. Every private rented property shared by three or more people who are not all related will need to be licensed – an estimated 10,000 properties.

Selective licensing

In certain parts of the borough, selective licensing will extend property licensing to all private rented homes – including houses and flats rented by an individual or single household. The selective licensing scheme, covering a number of distinct areas, is expected to cover about 5,000 properties.

This is one of the most complex licensing schemes to date and landlords and letting agents will need to study the arrangements very carefully.

Licensing fees

Whilst the selective licensing fee has been set at £500 / property for up to five years, the additional licensing fee for HMOs has been set at £250 / bedroom, making it £1,250 for a five-bed shared house for up to five years. This will become one of the highest additional licensing fees in London.

Landlords who apply within the first six months will receive a 20% discount, with a further 20% discount offered to accredited landlords.

The council says there will be an online application process available from 1 November 2015 and all properties will be inspected before a licence is issued.

Further information about property licensing in Southwark is available at www.londonpropertylicensing.co.uk/southwark

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