Nottingham’s new licensing scheme – what property owners need to know

According to a 2016 report by Building Research Establishment (BRE) Group, 21% of private rental properties in Nottingham are likely to have “Category 1 hazards”. Cold rooms, exposed wiring, dangerous boilers and leaking roofs all fall into this class of risk, which can make living uncomfortable or even endanger the lives of tenants.

Given this figure, it’s prudent that Nottingham City Council has decided to take action by introducing a selective licensing scheme to improve the living standards of those renting in the city.

What is selective licensing? Selective licensing applies to certain areas in the country, typically when there are high instances of “socially unacceptable behaviour” on the part of landlords, such as failing to address those issues listed above.

A property owner must apply for a licence before renting out a residential property, at a cost stipulated by the council. In Nottingham’s case, this is likely to come under £2 a week per property for accredited landlords and £3 at most for those who aren’t accredited. However, this amount will not be confirmed until April.

Nottingham City Council has insisted that they won’t be profiting from this scheme, with the cost of the licence funding the administration and operation of the scheme.

Is this the same as an HMO licence? An HMO (houses of multiple occupation) licence only applies to properties with a certain number of bedrooms, which are let out separately to unconnected tenants. Like selective licensing, this is to ensure tenants can enjoy their home in safety and comfort. Unlike selective licensing, it applies to property and lease agreement type, rather than a whole area. Those who already hold an HMO licence don’t need a selective licence as well.

Single properties separated into self-contained living accommodation will need a licence for each.

What type of property does selective licensing apply to? Landlords who lease out a residential property in a selective licensing area must apply for a licence regardless of whether it’s a flat or house unless they already have an HMO licence as mentioned above.

The following scenarios and property types do not need a selective licence:

  • Holiday lets
  • Businesses
  • University managed student accommodation
  • Properties rented by a family member

 

When does it come into effect in Nottingham? Applications for selective licensing in Nottingham should be made available from 1 July 2018. The licence is due to come into force on the 1st August 2018.

Property owners can face civil prosecution or fines or £30,000 if they don’t hold a licence in an area where selective licensing applies. These penalties can also be issued if a landlord is in breach of licence stipulations.

 

What about good landlords? While those who manage their properties well won’t be exempt from the scheme, the council will attempt to reduce the costs of their licence in light of the fact that model landlords make the process much easier.

 

Where can property owners in Nottingham find out more? Nottingham City Council has plenty of further information and guidance on the upcoming selective licensing.

Visit www.nottinghamcity.gov.uk/qualityhousingforall to find out more.

To discuss your clients’ property insurance requirements, get in touch with our team of experts at Property Protector who would be happy to help. Call 01159683293 or email quotes@propertyprotector.co.uk.