More details are emerging about a plan to expand licensing of landlords in Jesmond, and the reaction so far is decidedly mixed, with some predicting the proposals could cost landlords up to £2,500 per property.

Landlords, property agents and residents are welcoming moves to improve the condition of rental accommodation, but there are questions about enforcement and how funds raised through the scheme will be spent.

Newcastle City Council has launched a consultation period that will run until late January. And it has released more information about the exact licensing conditions that landlords in Jesmond and elsewhere will have to meet, as licensing extends to almost 18,500 properties from 740 properties currently. Landlords will have to pay up to £750 for a five-year licence and must meet the following conditions:

• install smoke detectors and, in some cases, carbon monoxide detectors;
• get an annual gas safety certificate;
• ensure any electrical appliances and furniture provided are in a safe condition;
• arrange inspections of the property at least every six months;
• deal promptly with complaints about disrepair and pest infestation;
• and take all “reasonable and practicable” steps to prevent or deal with anti-social behaviour.

Some licences for Houses in Multiple Occupation (HMOs) will also require a minimum room size of 6.51 square metres for a sleeping area used by one person aged over 10 years, and 10.22 square metres for a room used by two people aged over 10 years.

The council released an overview of the plan last month, saying it would improve housing conditions, combat anti-social behaviour and target a small minority of what one councillor described as “rogue” landlords. The National Landlords Association immediately slammed the proposal, saying it would increase rents, but tenants who have dealt with poor living conditions welcomed the move.

With the consultation process now underway, JesmondLocal asked landlords and others to respond to the new details released by the council.

“I think it’s totally unfair” – landlord John Henderson

John Henderson is a landlord who owns seven properties and is the managing director of Jesmond’s Acorn Properties, which manages 250 properties and finds tenants for another 2,000 properties. Henderson said he applauded measures to improve housing, but that it was hard to escape the conclusion that the council was using licensing fees to generate revenue in the midst of funding cuts from the central government. “Maybe I’m just cynical because I’ve seen so much before,” he said.

Henderson said the money from new licences should be added to existing licence revenues to get a true sense of the expected income for the council. He estimated the money would be able to pay for 50 inspectors. “Would you not say that’s a bit over the top? I think it’s being over-funded.

“I’m trying to understand the rationale. I think it’s a good idea, but it looks like it’s being dramatically overplayed. My concern is the cost to landlords, on top of what the government is already doing to the landlords. I think it’s totally unfair.”

Henderson said he wondered how the money from the fees would, in the council’s own wording, be “ring-fenced” and spent only on administering and enforcing the licensing scheme. “What are they going to do with the money? I think it’s more money than they need.” Henderson said rogue landlords could be dealt with under existing laws, and predicted that rents would rise. He has already sent a letter to his database of landlords alerting them to the proposed scheme, and plans to attend a consultation session with the council next week.

“We certainly won’t be recommending any rent increases to our landlords” – agent Adam Kane

Adam Kane, a partner at Jesmond property agency Easiliving, manages 250 properties and deals with more than 300 landlords. He said he supported the licensing plan, but “as always with such schemes, its success will rely on enforcement by the council.” He also said it would add to the ”squeeze” on landlords.

“Applying for the additional licences will take time and therefore resources. For letting agents, this will be diverting resources away from property inspections, providing customer services and educating our staff. Costs will need to be passed on to landlords, who are already seeing pressure on profits due to recent changes to tax regulations.”

Kane estimated that the licence and required improvements would cost landlords about £2,500. But he disagreed with Henderson that rents would necessarily go up. “Most landlords will understand the need to absorb any costs arising from the new licensing and their responsibility to provide safe accommodation to their tenants. We certainly won’t be recommending any rent increases to our landlords on the back of this.”

The decreased profit margin, however, would make owning a rental property less attractive.

He said an alternative to the council plan would be a landlord accreditation scheme. “[That] would go some way to ensure that rogue landlords were forced to comply or exit the marketplace. A database of accredited landlords with a star rating available online, much the same as registered child minders, would empower tenants to research providers in their area and ensure their landlord held the relevant ‘qualifications.’ I also think tenant organisations should put pressure on the government to make it illegal to advertise properties without gas and electrical safety certificates.”

“I see little point in new regulations if they can’t enforce the existing ones” – JRA member George Gibson

The Jesmond Residents Association (JRA) discussed the licensing scheme at its meeting last week, with most voices in favour. One member said a £750 license fee was “not a lot” compared to the money landlords made in rent, but another said a “cynical” view might be that the fee was a revenue generator for the council.

JRA board member George Gibson, who deals with the council regularly, told JesmondLocal that he welcomed the scheme but questioned how it would be enforced. “Particularly on anti-social behaviour, similar rules are already in place for the HMOs in Jesmond, and the council don’t seem to have the ability to enforce them. So I see little point in new regulations if they can’t enforce the existing [ones].” A caveat, he said, was that “some of the lack of enforcement is because tenants don’t know how to complain, and abused neighbours often just moan rather than report.”

JesmondLocal asked the city council to respond to some of the concerns about the licensing scheme. We did not receive a direct answer to a question about transparency, namely how the council planned to show that money from the licence fees would be “ring-fenced” for administration of the scheme, rather than spent elsewhere. However, a spokesperson said: “If the proposals are introduced as set out in the consultation, they will generate approximately £9.5m over five years to be spent solely on managing and administering the schemes.”

The spokesperson said there were currently 16 officers dealing with licensing, enforcement and support for tenants. “Although full details will be finalised after the consultation, we anticipate that over the five-year lifetime of the scheme, up to 40 specialist jobs will be created to deal with applications, compliance and enforcement, as well as providing specialist support to both tenants and landlords. Around 65% [of fee revenue] will be used to fund the cost of compliance and enforcement, with approximately 20% for support staff and the remaining 15% covering administrative costs including accommodation and ICT.”

The spokesperson stressed that the council was committed to delivering good-quality homes for residents. “Badly-managed properties impact on everyone – good landlords, tenants, homeowners and communities – and deter investment. These schemes will support tenants, including older, disabled and vulnerable people, by giving them access to safe, secure homes. This will be achieved by supporting good landlords and taking action against those who exploit vulnerable people by letting out unsuitable or dangerous accommodation.”

The consultation period on the proposed licensing plan runs until 27 January 2019. The public can comment online here: https://newcastleplproposal.commonplace.is/about. Full details on the scheme, including the licensing conditions, are here: https://newcastleplproposal.commonplace.is/schemes/proposals/document-library/details.

There will also be three open sessions for the public at Newcastle City Library on New Bridge St West. The dates and times are: 20 November 2018, 5pm-7pm; 4 December 2018, 1pm-3pm; 14 January 2019, 5pm-7pm.

The public can also email questions about the scheme or the open sessions to LicensingConsultation@newcastle.gov.uk.