New landlord licensing. Updates and views from Acara Management

New landlord licensing. Updates and views from Acara Management

Many of you will have been aware that landlord licensing was being introduced in the UK, but it’s now happening in full force borough by borough.

For several years now there has been mandatory licensing for Houses of Multiple Occupancy (HMO’s), but now there are lower band licenses for all rented properties, which is going to come as a shock to many landlords because they will not be able to ‘wing it’. It’s going to require written reports, proper scheduling and lots of notifications.

I’m just going to highlight some of the conditions being imposed by boroughs such as Ealing and Newham at this stage. More London boroughs will follow suit in the next few months and years. Acara Management will apply for and hold the license for its clients, something that landlords may struggle to find an estate agent doing.

There are two main reasons I can see for this increased level of licensing – first and foremost, it’s about increasing standards. Landlords must meet minimum levels of property standards, service and administration or face ‘unlimited fines’ and a criminal record or revoked license making it impossible to rent the property. This means the council is going to improve living standards in their borough and that causes less problems and complaints for the council.

I fully welcome this. As a former estate agent and now the owner of a property management company – I’ve seen thousands of properties in London. I’ve seen far too many that I wouldn’t want anyone to live in and witnessed the misery tenants have suffered because their landlord didn’t invest in the property or give the tenants any attention.

Secondly, councils will have landlord’s contact details, managing agent’s contact details at all times, and tenants contact details on demand. This allows them to bat Anti Social Behavior issues straight over to someone else and impose force.

Again, this reduces the amount of complaints the council has to deal with and pulls in Landlords and managing agents (whoever is the license holder) to tackle these issues by evicting the tenants and bringing legal action against them.

Importantly on this note – if your managing agent or estate agent says they do not want to hold the license – landlords should be aware. This puts all the responsibility on the landlord as the ultimate license holder and none or very little on the estate agent. If you have problematic tenants, the council will go after the license holder to sort it out.

If that landlord as the license holder is then trying to chase the estate agent to deal with it (who is under little or no legal obligation), you can easily see how inefficient that becomes – the management fee quickly becomes a waste of money for the landlord.

However – another important point – the license lasts 5 years and is not transferrable. And it costs £500. We have to consider this scenario – maybe the estate agent does hold the license?, but the tenants stay a year and the landlord finds new tenants through a new agent – does he or she have to pay another £500 plus admin fees for a new license under the new agent? It would seem so.

Acara Management is not an estate agent. So for our clients – which ever letting agent finds the tenant – the property manager remains the same. We instruct letting agents that offer preferable rates to the landlord.

This model is going to benefit landlords hugely. They can rely on a professional to hold the license and take the responsibility, whilst being able to use different lettings agencies without additional costs. In fact it’s cheaper.

So, brace yourselves – some of the key elements in this selective license;

Quite a list! Are you ready for it??

This really turns the role of a landlord into a job requiring considerable attention. Landlords are going to need to dedicate time to learning the law, and attending to tenants. I think self-management by landlords is going to very quickly become by far the more expensive option vs using a managing agent. Consider the time required to do all the above?! How much do you value your time at?

Landlords – get ready but do not fear, Acara is here.

[email protected]

0208 226 4200

Thank you for reading

Paul Rowland


Acara Management