Government abolishes prior approval requirement for selective licensing schemes larger than 20%

View Of Three Storey Houses With City In The Background

By a letter dated 16 December 2024, the Minister of State for Housing and Planning, Matthew Pennycook MP, has announced that local authorities planning to designate new selective licensing schemes will no longer be required to seek prior approval from the Secretary of State if their proposed scheme covers 20% or more of the private rented sector in their area or 20% or more of their geographical area.

This new “General Approval” comes into force on 23 December 2024 and in section 2 of the accompanying updated guide for local authorities it states that “local housing authorities in England are no longer required to obtain confirmation from the Secretary of State before implementing a selective licensing scheme of any size.”

It will undoubtedly reduce upfront bureaucracy for those authorities wishing to implement larger licensing schemes as it removes the burdens of extra cost and officer time typically associated with having to seek prior approval from central government.

However, there is also some important ‘small print’ (likely to be welcomed by PRS tenants and landlords alike) that local authorities should take into account when planning a designation. At the bottom of the Minister’s letter there is some “Additional guidance” which requests that local housing authorities observe best practice by submitting “data on their licensing scheme to the Ministry of Housing, Communities and Local Government as described in any guidance published by the Ministry.”

Section 9 of the updated licensing guide for local authorities (read together with Section 5 paragraphs 29-32) expands on this requirement by listing the data that is to be provided to the Ministry both at the commencement and at the end of an authority’s scheme. Namely, an authority will need to show how the “scheme has addressed the issues it was designed to address”. If poor housing conditions is one of the reasons for making a designation then, as Section 5 points out, this will mean, amongst other things, provision of data on property inspections and enforcement against non compliance by landlords.

This is to be welcomed. Home Safe’s recent experience carrying out property licensing inspections of several hundred each month for different local authority partners across various parts of the country has highlighted the necessity of inspections in the licensing toolkit. In one authority area approximately 70% of inspected properties had a serious hazard in evidence. In another area, inspected properties had an average of 4 issues of which at least one was serious.

Given that authorities will be also required to provide data on the licence fees charged to landlords and the costs associated with running their selective licensing scheme, property inspection data is the main method by which any authority will be able to visibly evidence that their scheme has worked and provided value for money.

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