UKAA leads selective licensing discussions between Local Authorities and BTR sector

• Selective licensing originally conceived to ‘tackle problems’ in private rented sector
• Concern growing over blanket application
• UKAA leading discussion and supporting members to engage proactively with Local Authorities

The UKAA (UK Apartment Association), the membership organisation for the Build to Rent (BTR) sector, is spearheading a co-ordinated discussion with Local Authorities, on behalf of its members, on the subject of selective licensing.

Having established a working group which includes the majority of BTR operators, the UKAA has spoken on behalf of the sector to express concern around the increasing blanket application of a scheme originally designed to ‘tackle problems’ in the private rented sector.

“Selective licensing was designed to provide Local Authorities with greater powers to address perceived problems in the private rented sector. However, we’ve recently seen several Local Authorities taking a broad-brush approach and applying the scheme to all rental properties – including registration and payment of a license fee.” – Brendan Geraghty, CEO, UKAA

Key to the concerns is that a broad-brush fee structure across the entire private rented sector – including BTR – could have a significant impact on the viability and deliverability of BTR schemes. This could result in loss of investment, leading to the provision of fewer BTR homes at a time when there is an overwhelming need for new homes. Knock-on effects would include a reduction in the number of affordable housing units being built and a loss of employment opportunities, Council Tax revenue and new social and physical infrastructure.

There is also a potential financial impact on renters when selective licensing is applied to BTR schemes. Increasing supply/demand imbalances, due to fewer BTR homes being provided, could push already-spiralling rents even higher. Where schemes do go ahead, the increased operating cost due to licensing fees could be passed along to tenants in the form of higher rents. The cost of the significant bureaucratic and administrative burden in processing the selective licensing scheme could also filter through to rents.

“The UKAA’s position on driving quality in the rental economy is already established. We support the principle of selective licensing to tackle rogue landlords and to improve standards in the private rented sector as a whole. Nevertheless, a broad-brush selective licensing scheme across all private rented sector homes, including BTR will have a disproportionate and negative impact on the BTR sector and its future delivery. As such, we are encouraging Local Authorities to engage constructively with the BTR sector and the UKAA to agree a way forward which is both of benefit to renters and supports the future delivery of high-quality rental homes.” – Brendan Geraghty, CEO, UKAA

For more information, please visit https://www.ukaa.org.uk