Discretionary licensing: will the upward trend continue?

Kamma’s latest analysis found that almost 20% of England’s local authorities now have one, or more, discretionary licensing schemes in place. In fact, at the end of 2022 Kamma reported that a total of 52 new schemes and consultations were launched in the last year, which is five more than in 2021 and almost 10 more than in 2020. And the trend is set to continue this year. Based on the number of active schemes, those planned to start or in consultation, and those finishing, Kamma predicts that by July this year a total of 525 mandatory and discretionary schemes will be live, an all time high with around 20 more active schemes compared to today.

Where are most schemes located?

In England, 65 (or 19.5%) of all local authorities now have one or more discretionary licensing schemes in place, whilst Wales only operates additional schemes, and Scotland does not operate any discretionary schemes.

More schemes are being extended and renewed than ever before

Discretionary licensing schemes are in place for five years when introduced, and Kamma’s data shows that more and more schemes that are coming to an end are already confirmed to, or under consultation to be extended. For example, Nottingham council is seeking comments on proposals to introduce a new five-year Additional HMO Licensing Scheme for houses in multiple occupation (HMO). The current scheme will soon come to an end and the council is now looking to consult on a new citywide scheme, which would run for a further five years from January 2024 if approved. Sefton council is another example of a council that is extending their additional and selective licensing schemes this March and for the coming five years.

The true cost of licensing

The increase in number of schemes and enforcement has also had an impact on the level of fines for rogue letting agents and landlords. Total fines are now passing the £8.5 million mark for the first time ever.

●  Total agent and letting agent fines: £8,528,343

●  Average landlord fine: £4,424

●  Average letting agent fine: £4,652

The largest single fines ever recorded are £100,000 (for a landlord) and £167,000 (for a letting agent) respectively and £6.73 million of all fines, or 79% of fines are related to property licensing and regulations. The remaining fines are related to a mixture of offences including consumer rights violations, fraud, prohibition notices and redress scheme issues. 

Over £1 million pounds of fines were handed out to landlords and agents last year, making 2022 a record year for property licensing and enforcement. Total fines for rogue letting agents and landlords increased by an average of £90,000 per month in 2022. This means that over 12% of all fines were recorded in 2022, suggesting a major increase in enforcement from London’s local authorities. 

One example of a local authority that has really stepped up its enforcement is Tower Hamlets. Letting agents in the borough have faced fines of over £430,000 for illegal fees and failing to belong to a redress scheme in the last six years. In fact Kamma’s data shows that Tower Hamlet is the eight top enforcing council in London and have brought a total of over 60 cases forward against landlords and agents.

How Kamma can help 

At Kamma, we understand that property licensing is complex, inconsistent, and ever changing. Our technology and software cuts through that complexity to keep you on top of all the changes with clear and accurate advice. We analyse and sort data to help agents, landlords and surveyors understand the impact of Property Licensing and Planning Permission on their properties and assets. We leverage technology and data to help agents and landlords stay on top of new property licensing schemes and avoid licensing fines.

Contact us or book a demo now to understand how Kamma can solve property licensing for you.