Buy to Let

Landlords face ‘postcode lottery’ on cost of licensing

Christina Hoghton
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Christina Hoghton

The most expensive landlord licence in Britain costs 21 times more than the cheapest

Landlord licensing charges vary enormously between local authorities, according to Direct Line for Business.

The insurer found that those renting out residential property face a postcode lottery when it comes to the cost of getting licensed.

The cost of a new licence ranges from just £55 to £1,150, a staggering 21 times more expensive.

In Liverpool, the cost of a licence for a first property is £412, whereas in Salford just 30 miles away it is over 51% higher at £625.

The average landlord licence across the UK costs £591 and are compulsory in Scotland and Wales. In England, however, just one in six (16%) local authorities have a scheme in place. It is estimated that 460,000 rental properties in England are now covered by a landlord licensing scheme.

What are landlord licences?

Licencing schemes allow councils to establish if landlords are a ‘fit and proper’ person to be a landlord and can include regulations concerning the management, upkeep and safety measures of a property.

Those renting out a house for multiple occupation (HMO), a property shared by at least three people who are not from the same family, need a mandatory licence. However, councils are increasingly introducing their own additional and selective schemes to raise revenue.

There’s been a dramatic increase in the costs charged by local authorities for landlord licences over the last few years. For its additional licensing scheme, the cost of a licence in the London Borough of Newham increased by 150% in just three years, from £500 in 2014/15 to £1,250 in 2017/18.

Plus the costs can be confusing, with a baffling range of licence costs, terms and exceptions depending on the local authority running the scheme. These include tiering the cost of licences based on the number of rooms in a property (12%), charging by property type (9%) or the number of occupants (8%) for example.

Matt Boatwright, head of Direct Line for Business, 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.

“Anyone planning on becoming a landlord, or who already has a property portfolio, should contact their local authority to see if they have a scheme in place.”