Introduction
With UK house prices reaching record rates and rents on the rise, now is a great time to be a landlord. And a buy-to-let property can be highly profitable. Nevertheless, one thing landlords need to be aware of is selective licensing. With 25 of Birmingham’s 69 wards currently running schemes, you need to be aware if having a licence applies to you.
In recent years landlords have experienced many changes in the buy to let market, facing new rules and regulations. Before investing in a buy-to-let property it’s essential to fully understand regulations to make sure you stay within the law and avoid any penalties.
For that reason, we take a closer look at what selective licensing means for landlords and their buy-to-let properties and examine why it doesn’t have to mean you are left out of pocket, especially if you choose your investment areas wisely.
Birmingham, one of the UK’s most vibrant and diverse cities, is set to introduce selective licensing regulations later this year. The new licensing scheme aims to improve the quality of privately rented properties, protect tenants’ rights, and enhance community standards. This article explores the key aspects of Birmingham’s selective licensing scheme and its potential impact on the city.
What is Selective Licensing?
Selective Licensing is a landlord licencing scheme introduced within the Housing Act 2004. It means that if you own a buy-to-let property you may need to apply to the local council for a licence to be a landlord.
Selective licensing is a system implemented by local authorities to regulate privately rented properties in specific areas. It requires landlords to obtain a license for each property they rent out within the designated area. The scheme aims to ensure that rental properties meet minimum standards of quality and management, ultimately benefiting both tenants and the wider community.
If you are in a selective licensing area, your application will last for 5 years before you need to think about renewing it. Once an area has been designated, landlords must apply for a licence within three months before the designation comes into force.
Landlords within that area will need to complete an online application form and provide certificates of safety like gas and electrical.
The Scope of Birmingham’s Selective Licensing
Birmingham City Council has decided to implement selective licensing in 11 areas across the city. These areas were chosen based on several factors, including high levels of anti-social behavior, low housing demand, and poor property conditions. The selected areas include parts of Aston, Bordesley Green, Handsworth, Ladywood, Nechells, Soho, Sparkbrook, and Washwood Heath.
Objectives of the Scheme
- Improve housing conditions: The selective licensing scheme in Birmingham aims to address the issue of substandard housing. By requiring landlords to meet specific standards, the scheme will help ensure that rental properties are safe, well-maintained, and meet essential health and safety requirements.
- Enhance community safety: The scheme intends to reduce crime and anti-social behavior in the designated areas. By holding landlords accountable for the behavior of their tenants, the scheme creates an incentive for landlords to actively manage their properties and address any issues promptly.
- Protect tenants’ rights: Selective licensing will enable the council to monitor and regulate the behavior of landlords, ensuring they adhere to their legal obligations. This includes protecting tenants’ rights to a safe and habitable living environment, fair treatment, and prompt resolution of any complaints or maintenance issues.
Benefits for Tenants
The introduction of selective licensing in Birmingham is expected to bring several advantages for tenants:
- Improved living conditions: The scheme aims to raise the overall quality of rental properties, ensuring tenants have access to safe and well-maintained homes.
- Enhanced tenant support: The licensing scheme will require landlords to provide adequate support and response to tenants’ needs, promoting better communication and resolving issues promptly.
- Increased accountability: With the licensing scheme in place, tenants can be reassured that their rights are protected and that their landlords are committed to maintaining high standards of property management.
Impact on Landlords
While the selective licensing scheme places additional responsibilities on landlords, it also offers potential benefits:
- Professionalization of the sector: The licensing scheme encourages landlords to adopt best practices and professional standards, leading to a more reputable and sustainable rental sector.
- Assistance with property management: Landlords will have access to resources, training, and guidance from the council, helping them better manage their properties and navigate their legal obligations.
- Increased property value: By improving housing conditions and the overall image of the designated areas, property values may experience positive growth, benefiting landlords in the long term.
Further information
You will have to tell us about any owner or other interested party (such as a mortgage company or freeholder) when you apply for your licence.
A managing agent can apply for a licence for a property with the landlord’s permission.
If you sell your property, any new landlord will have to apply for their own licence. You cannot transfer a licence to someone else.
Landlords will have to pay £700 for a licence for each property that they own in an affected ward. There are no discounts for landlords with more than one property. For example, if you own 10 properties, you will have to pay for 10 licences.
If you are in a selective licensing area and fail to apply and register your property with the local council there will be consequences. You could be liable to a fine of up to £30,000. If you are convicted, you may be prevented from holding a licence in the future.
Conclusion
Birmingham’s selective licensing scheme is a significant step towards improving the quality of rented properties and safeguarding tenants’ rights in the designated areas. By setting higher standards for landlords and promoting responsible property management, the scheme aims to enhance community safety, tenant well-being, and the overall reputation of the rental sector in the city. As the scheme comes into force later this year, it is expected to contribute to a more prosperous and harmonious living environment for all stakeholders involved.
It’s unlikely that selective licensing is going to disappear anytime soon and may well increase. Because of its nature, however, it doesn’t have to be the drain on resources that some landlords have found. Choose the right locations and make your investments wisely. Hence it’s likely you won’t have to worry about a selective license at all. At least not for the immediate future.
It pays to work with a property agent that knows what they are talking about. Even more so, when it comes to the selective licensing scheme. At LV PROPERTY, we handle a wide range of properties in Birmingham.
The truth is that property investment, especially in the buy to let market, is still highly profitable. First of all, levels of rentals and tenancies are at an all-time high. Secondly, people are always looking for great accommodation in decent areas. If you make good choices on which property you invest in there is still plenty of profit to be made. Additionally, attracting the right tenants, combined with the rising value of your home, should help as well.
If you’d like to find out how LV PROPERTY can help with your future buy to let property purchase, contact our expert team today.
Professional Support from LV PROPERTY – Apply for selective licence
- Contact LV PROPERTY for assistance, we can apply on your behalf.
Arvind Rattu
Management@lvproperty.co.uk
0121 285 7575
2. Apply yourself via the link below
