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The monthly magazine providing news analysis and professional research for the discerning private investor/landlord

London Licensing Scheme Regime is Failing Consumers

With over 130,000 unlicensed rental properties in London, safeagent, which runs an accreditation scheme for lettings and management agents, is calling for a rethink of licensing in the private rented sector to better protect tenants.

New research for safeagent, conducted by London Property Licensing, has found over 130,000 unlicensed properties in London, which should be licensed under selective, additional or mandatory HMO licensing schemes.

The research, carried out through Freedom of Information (FOI) requests, found that there are over 310,000 private rented properties in London that require licensing under mandatory HMO, or additional and selective licensing schemes implemented under the Housing Act 2004. Whilst the mandatory HMO licensing applies across England, additional and selective licensing schemes are introduced on a Borough by Borough basis, with the aim of improving standards in the Private Rented Sector (PRS).

However, non-compliance in the capital is rife, according to the research, which found that licence applications were submitted for only 25% of the 138,500 private rented properties that require licensing under mandatory HMO or additional licensing schemes – a non-compliance rate of 75%. Without a licence application submitted, these properties are being operated illegally, potentially putting consumers at risk.

If they are caught operating an unlicensed property, landlords and their letting or managing agent, can face prosecution and a hefty fine, or a civil penalty of up to £30,000. The landlord can also be ordered to repay up to 12 months’ rent. However, many could be falling foul of the law through ignorance of the complex regulatory framework.

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