A new government database for England’s private rented sector could generate more than £325 million a year in fees paid by landlords, according to the National Residential Landlords Association (NRLA).
The database is due to begin rolling out across English regions from December. Landlords will be required to pay £65 a year for each rental property they register.
The NRLA claims the scheme will generate significant costs while providing only limited benefits to landlords and tenants.
Database Could Cost Landlords Millions
The association estimates that the database will cost the private rented sector at least £327 million annually, based on more than five million privately rented homes in England.
It says this figure is almost seven times higher than the cost originally estimated by the government in its impact assessment for the Renters’ Rights Bill before the legislation became law.
The NRLA argues that the expense will ultimately be reflected in rents, meaning tenants could end up carrying some of the additional cost.
The organisation also points out that much of the information landlords will have to provide is already collected by local authorities in areas operating licensing schemes.
According to the NRLA, some existing licensing arrangements can cost landlords as much as £2,300 per property.
Concerns Over Manual Documents
The landlords’ association has also raised concerns about how safety documentation will be handled through the new database.
Unlike Energy Performance Certificates, gas and electrical safety certificates are not currently planned to be digitised as part of the system.
Landlords may therefore have to scan and upload these documents manually, creating additional work and compliance costs.
The NRLA believes a fully digital system should make it easier for landlords to demonstrate that they are meeting their legal responsibilities while also giving tenants useful information.
NRLA Questions Value of Database
NRLA chief executive Ben Beadle criticised the proposed system, arguing that landlords could be required to pay for providing information that they already submit to councils in many parts of the country.
He said the database should make compliance simpler and provide clear benefits for both landlords and renters.
Instead, the NRLA believes the scheme risks becoming an expensive additional requirement without providing sufficient value in return.
Beadle also questioned the cost of manually uploading documents, arguing that landlords could end up paying more for this process than motorists pay for an MOT, despite an MOT involving a physical inspection of a vehicle.
The NRLA says the money expected to be collected through the database could be better used to help landlords meet the government’s energy efficiency requirements.
The database is part of the wider changes being introduced to the private rented sector, with landlords in England expected to register their properties and pay the required annual fee as the system is rolled out.
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