The East London borough of Newham has set up a compulsory licensing scheme for all private landlords. It means that if you have a buy to let property in the borough you need to apply for your licence now- registration needs to take place by 31st January this year.

Why are Newham taking this step, and will other borough and district councils follow their example? These are the questions that some of our competitive landlord insurance buyers will be asking. The answer to the first question is that Newham reckon it will improve standards in the private rented sector. They point to the fact that bad behaviour tends to happen in bad properties. Under the scheme, landlords must ensure that their properties meet adequate health and safety standards. Large fines may be incurred by those in breach. Newham expects something like 35,000 homes to be covered by the scheme, a number that would represent one third of all Newham’s housing stock. The licence costs £150 for five years.

Will other areas of the country follow Newham’s example? Scotland has its own landlord register and there is a consultation taking place on the subject in Wales. In England the current policy is to leave it up to local councils to decide how to police private landlords. Under the Housing Act 2004 it is compulsory to have licences for some houses in multiple occupation but the Newham scheme is far wider than that. Critics argue that there is already adequate legislation to enable councils to exercise control over landlords whose properties are sub-standard. They say that councils should be more active in enforcing the existing rules rather than introducing new ones.

Newham have also taken the step of setting up a private landlord accreditation scheme. This offers benefits to participating landlords such as fast tracking of housing benefit payments and bonds against unpaid rent and damage caused by tenants. If you would like to find out more about the compulsory licensing scheme and the accreditation scheme, visit the website.