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.”