New research from Direct Line shows that many landlords in England are facing rising costs due to selective licensing schemes set by local councils.

Out of 245 councils that responded to Direct Line’s Freedom of Information (FOI) request, 47 currently have selective licensing schemes, up nearly 10% from 2022. Councils such as Peterborough, Merton, Charnwood Borough, and Birmingham have introduced these schemes in the past two years.

On average, councils charge landlords nearly £700 (£699.92) for these licences, though costs vary widely across England.

Local authorities with the highest charges include Leicester (£1,290), Newcastle (£900), and Greenwich (£858). The lowest charges are from Ashfield District Council (£350), East Staffordshire Borough Council (£507), and North Yorkshire Council (£550).

Councils with the highest costs for selective licenses

Source: Direct Line 2024

In 2023, councils across England raised over £20 million through selective licensing schemes. This substantial sum reflects the increasing reliance on these schemes to regulate rental properties and ensure compliance with local standards. Liverpool was a major contributor, generating more than £5 million of this total. The city’s significant revenue from licensing is notable, especially considering the intervention of commissioners appointed by the former Conservative government to manage certain services due to previous council failures.

The cost of selective licenses varies significantly across different local authorities. For instance, Leicester charges the highest fee at £1,290, followed by Newcastle at £900 and Greenwich at £858. On the other end of the spectrum, councils such as Ashfield District (£350), East Staffordshire Borough (£507), and North Yorkshire Council (£550) impose lower fees. This variation highlights the diverse approaches councils take to managing and enforcing licensing requirements.

Landlords who fail to comply with licensing regulations can face substantial penalties. Burnley Council, for example, has issued fines reaching up to £10,000 for non-compliance. This strict enforcement underscores the importance of adhering to licensing rules and the financial risks involved for landlords. In the previous year, fines collected for licensing violations nearly doubled, with councils in England collecting £2.5 million compared to £1.4 million the year before.

Waltham Forest and Middlesborough were the top offenders in 2023, with 170 and 128 licensing breaches respectively. These councils not only had the highest number of offences recorded last year but are also leading in 2024, indicating ongoing challenges in enforcement and compliance. The increase in fines and offences highlights the growing importance of selective licensing schemes in managing rental properties and ensuring that landlords meet their obligations.

Councils generating the highest amount of revenue from selective licensing schemes

Several councils that previously operated selective licensing schemes have discontinued them. Since 2020, seven councils contacted by Direct Line, including Hartlepool, Sheffield, and Coventry, have ended their schemes. These councils cited improved market standards as the reason for closing the schemes.

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