Bristol Additional Licensing approved!

Bristol landlords, news update 11th April 2019:

BCC have issued formal public notice of this additional licensing scheme: Click here: Public notice- Central Bristol AL designation 2019 vFinal. 

Bristol landlords, news update 2nd April 2019:

The Mayor and other members of the Bristol City Council Cabinet met today and approved the implementation of Additional Licensing within the designated area of twelve wards that make up central Bristol (Ashley, Bishopston & Ashley Down, Central, Clifton, Clifton Down, Cotham, Easton, Hotwells & Harbourside, Lawrence Hill, Redland, Southville and Windmill Hill).

This latest BCC additional licensing scheme will come into force on 8th July 2019, landlords will need a licence from that date.  This will be announced publicly in the local press from 6 April and regularly for a period of 12 weeks.

BCC’s additional licensing is aimed at addressing problems associated with the poor management and conditions of HMO’s that do not come under the definition of mandatory licensing.

Properties that will be affected by additional licensing can be quite small. For instance a two bedroom property with a related couple in one room and a friend in the other will require a licence!  The largest property will house up to four tenants before they fall under the new broadened mandatory licensing definition.

The main complaint is from responsible landlords who feel the high application and enforcement fees (see chart below) are not fair. On this basis, please note that we are still pursuing justification of the application and enforcement fees being charged – among the highest in England!  We are expecting a formal response from BCC before the end of April and will keep you informed.  We have asked BCC for the calculations that justify the fees and also evidence that these fees are proportional and reasonable considering the work involved.

The payment of fees are split into two parts. Part 1 Processing the Application (33% £414) and Part 2 Enforcement & Administration (67% £841).  Additions or discounts being added or deducted from the Part 2 fee.

It was interesting to hear at the recent South West Landlord Expo, the various plans from landlords who do not wish to be licensed under this scheme.  Also, the plans of landlords who need to increase revenue to fund the cost of licensing in addition to the combined plethora of new legislation.  The following represents some thoughts being considered:

• Letting to single families or no more than two individual tenants, accepting a lower income.
• Where the location and condition of the property is acceptable, transferring from the PRS and into short term Holiday or Air B&B type lets. This option needs to be carefully considered, holiday let management costs can be quite high.
• Landlords serving the benefits sector are considering lower risk / higher rent paying professional or student tenants. These landlords have accepted the higher expectations of professional tenants.  A make over, upgrade in furniture and the inclusion of broadband etc. Licensing will still apply to these properties, however, the increased income and prospect of less issues arising makes it an attractive option.
• Many landlords, particularly our more mature landlords, have had enough and are now threatening to leave the PRS.  These more mature landlords probably represent the largest demographic of landlords serving the City Centre.  By selling their properties they will take a hit from increased capital gains tax.  Some are seeking less demanding “armchair” type investments.  Other’s are seeking an easier less complex life, particularly those who now have sufficient savings to cover their final years!

Hopefully, this feedback will provide food for thought.  Please let me know if you have further ideas / plans?

Unfortunately most of the options above will result in possessions and the eviction of tenants.

News update 7th November 2018:

1.The proposed Bristol City wide additional licensing finished 13th May 2018 and its findings have been published on Bristol City Council (BCC) website www.bristol.gov.uk/licensingscheme.

2.BCC are now consulting on a revised fee structure and seek your views on whether you think this structure is fair.  Full details of the proposal and a new survey questionnaire can be found on our website www.bristol.gov.uk/hmolicensing. It is important that all landlords with HMO’s in and around the proposed 12 wards, respond to this consultation.

News update 5th Sept 2018: Bristol City Council Cabinet is due to meet (dtbc) to decide on whether the proposed Bristol City wide additional licensing is be introduced. We have been advised that the fee payment structure is to change. Following the recent R Gaskin v Richmond upon Thames case the payment of licensing fees will be made in two parts; Part 1 to cover the cost of licence application and Part 2 after issue of the licence.

The consultation period is now closed. Please find our response to the consultation here: ALL Wessex Response to Bristol Additional Licensing Proposal May 2018. 

This is a must read for all landlords and in particular those with small Houses in Multiple Occupation (HMO’s) in Bristol City.

Please add your comments and join in the debate on our facebook page.

The council proposes to introduce an Additional Licensing scheme for houses in multiple occupation across Bristol City.  Specifically 12 wards that make up central Bristol – Ashley, Bishopston & Ashley Down, Central, Clifton, Clifton Down, Cotham, Easton, Hotwells & Harbourside, Lawrence Hill, Redland, Southville and Windmill Hill – with the aim to improve poor management and poor housing conditions.

The Proposed Additional Licensing will capture most HMO’s that are not defined as HMO’s under the expected Mandatory Licensing regulations expected in April.

This Additional Licensing will apply to all private rented houses or flats in this area that are let to three or four people who aren’t related and who share some facilities, like kitchens or bathrooms. The type of agreement (AST, Licence or other type of agreement) or whether occupants are under a single agreement or individual room agreements does not matter, an Additional Licence will still be required.

Landlords would need to apply for a licence and meet licensing conditions.

The basic proposed licence fee under this scheme without any discounts, would be £1,660, valid for up to five years. With discounts (early application/proof of in date & satisfactory Gas, Electrical & EPC Certificates and membership of an approved West of England Rent with Confidence Scheme organisation) the licence fee could be reduced to £885. For renewals this would be £785.

Further information about this proposal can be accessed by clicking here.

“Rob Crawford, Chairman for the Association of Local Landlords (Wessex) encourages all landlords that may be affected to read the proposal in detail before responding (but see bullets below first) to the consultation survey  The consultation closes on 13th May 2018.

The proposal was not unexpected after Councilor Paul Smith’s (BCC’s Cabinet Minister for Housing) outburst at a recent landlord meeting, where he revealed plans to introduce City Wide licensing as it was “Labour Policy”.

Together with recent changes in tax legislation, loss of mortgage interest relief and anticipated increase in mortgage interest, higher tax threshold landlords with large portfolios now face bankruptcy.  Irrespective as to whether the landlord is compliant or rogue. Additional licensing does not discriminate sufficiently between the two!

The Council has not demonstrated how a basic Additional Licensing fee of £1,660 can possibly be justified.  If the Council maintains that this level of fee reflects its costs of administering the scheme, then there are clearly concerns over the council’s efficiency and this must be challenged.

While the Council may have the legal power to introduce new measures, it is also under a duty to do so in the most cost-effective manner possible.  ALL Wessex is aware of significantly lower cost means of achieving what Additional Licensing sets to deliver. An alternative scheme or partnered approach with a more commercially driven service provider.

Furthermore, the Council needs to be reminded that there is a legal obligation on Councils to only spend funds raised from Additional Licensing on the scheme.  It would be illegal for the council to spend money raised from Additional Licensing on other council services.

The Council is proposing that a discount of £775 can apply, resulting in a net fee of £885.  However, the Council has not justified why its costs would be so much more if landlords cannot comply immediately with these requirements.  Even at a proposed discounted fee level of £885, ALL Wessex has some difficulty in understanding how the Council’s costs can be so high.

Whilst we wish to support the eradication of rogue landlords and where necessary support landlords in meeting an acceptable rental standard, we do not believe Additional Licensing as proposed is in the interest of landlords or their tenants.

We will be providing landlords with guidance on how to best respond to the consultation in due course.   All landlords must play an active part in objecting to this proposal”

Considerations that you may wish to include in your Consultation response:

• Licence Fee – of £1660 is one of the highest and as far as we can see is the forth highest alongside three other wards in London.  The fully discounted fee is £875.  What we were expecting for the basic was £900 with 50% reduction for compliant / accredited landlords making the discounted fee circa £450.  Why is BCC so expensive?
• Timing – confusion and management difficulties due to the introduction of Additional Licensing at the same time as Mandatory Licensing is extended to HMO’s with only two levels and where the minimum room size will be mandated as 6.5m square.
• Resourcing – how will BCC resource all the work involved in managing existing and new  HMO’s under Mandatory Licensing and also Additional Licensing.
• Difficulty in costing – the above two points make it difficult to cost, the HMO PRS is changing so much that only very broad brush assumptions can be made. High risk strategy leading to costs being over estimated and the high (London level) licence fee.
• Limited, internally focused research – in consideration of partnering / employment / landlord self management, where efficiencies and reduced fees could be achieved.
• Inappropriate political pressure – applied by BCC Labour left, who’s objective is to apply Additional Licensing throughout Bristol, even if not legally justified!
• Lack of data – to justify the proposed Additional Licensing.
• Eviction of tenants – that currently occupy rooms slightly smaller than the statute HMO minimum 6.5m square size.
• Increased Rent – to cover the costs of licensing fees and evictions to reduce occupancy to below licensing numbers.

More to follow………