Councils all across the UK are doing different things to improve standards for tenants. A popular approach is to require private landlords to get a license. Whether it is mandatory, additional, or selective licensing, the goal is to ensure each landlord has to meet the council’s standards. We want to look at Lambeth’s new proposals in this area today. The plans could have a massive impact on people with investment properties in Lambeth.
Breaking their own record
Lambeth Council has an unfortunate record at the moment; they have the most expensive HMO licensing scheme. Currently, owners of HMOs have to pay £506 per room. All houses in multiple occupation need either a mandatory or additional license. The first applies if there are five people or more not from the same household but sharing facilities. The latter is for properties where three or more people not from the same household share facilities.
However, the local authority has a plan that would break this record. They are proposing to introduce selective licensing in 23 of 25 wards in the borough. This would require every rental property to have a license, even those let to a single household or two unrelated sharers. It would cost £923 per property. That would be the most expensive license in the country.
The current plan is to introduce the selective licensing in September 2024. Before then, the council is asking for landlords and tenants to give their input. A consultation is open now, running until 4th March 2024. You can complete a survey here. There will also be virtual public meetings in the New Year to discuss the matter.
Criticism
There has already been criticism of the plans though. They could have a massive impact on investment properties in Lambeth, and deter future investors too.
For one thing, a number of investors and landlords claim schemes are not effective. Their goal is to increase standards, but sadly a minority of bad landlords can still get away with housing tenants in low quality properties in bad condition.
The main critique is that the licensing simply makes it more expensive to rent. This is because landlords end up passing on the license costs to their tenants. So, rents go up and standards don’t necessarily always follow. It can also cause serious issues in areas where rent levels are already unaffordable.
There is also a criticism that licensing like this punishes all landlords, even good ones. Is that fair when only a minority are not professional? Critics point to the fact that the council itself admits that a large number of properties are well managed and in good condition. Do the owners and tenants deserve to face higher costs?
Do you want some help with investment properties in Lambeth?
It will be interesting to see what decision the council makes after the consultation period finishes. They will have to review all the feedback and then decide what to do. The choice could have a massive impact on the area.
If you are currently considering putting your money into investment properties in Lambeth, it may be wise to wait until there is a decision here. That could help you avoid the issue of facing having to pay for a license (or licenses) in September 2024.
In addition, if you do decide to commit, you should think about working with us. Finefair Ltd is a company with a great deal of experience in London. We know about the challenges investors and landlords have to face. Our goal is to deliver services to help with this, including management, guaranteed rent, and more. Contact us if you want to find out more.
