Landlord Licensing Lottery for Buy to Let Investors

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Buy to let investors face a postcode lottery when it comes to landlord licensing it has been revealed in new research.

Analysis carried out on behalf of Direct Line for Business has revealed that licensing costs for landlords can vary hugely depending on which local authority the investment properties are situated in.

Although landlord licensing schemes are mandatory in Scotland and Wales, only one in six English local authorities have a working scheme in place.

Of those English authorities that do have licensing schemes in place however, the cost of a licence can range from just £55 in the cheaper authorities to as much as £1,150 in the most expensive.

On average, each council with a scheme in place raised £144,629 from landlord licensing schemes in 2017.

Councils are also cracking down on licensing offences, dishing out fines to buy to let investors. In 2017, councils across the UK recorded an average 5,069 licensing offences, an increase of 46 per cent since 2016 (3,476 offences).

Head of Direct Line for Business, Matt Boatwright, said: ‘Our analysis shows landlord licensing is truly a postcode lottery, with a phenomenal range of costs for those that do have to sign up for a scheme.’

Many experts also feel that landlord licensing fails to achieve its main objective of improving the private rental sector in any case.

David Smith, policy director for the Residential Landlords Association said: ‘Whatever the cost of licensing, it fails to provide any assurance about the quality of accommodation. The RLA’s own analysis shows that there is no clear link between a council having a licensing scheme in place and levels of enforcement against criminal landlords.

‘The fundamental problem with all schemes is that it is only the good landlords who come forward to be licensed. They completely fail to identify the crooks.’

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