Nottingham councillors have questioned whether the creation of a new licensing scheme to stamp out rogue landlords is good value for money.
Labour-run Nottingham City Council set up the Selective Licensing scheme in August 2018 to make rented properties safer for tenants.
It gave the authority the power to make sure rented homes met certain conditions by requiring landlords of certain properties to register and be issued with a licence.
But the scheme is due to end in July 2023 and a new one is being drawn up in its place.
It is estimated there are 45,569 private-rented properties in the city, a number which has been rising considerably, and 32,000 had been covered by the old scheme.
Landlords who refused to join faced a fine and prosecution.
Under the previous scheme, 666 improvements were made to a total of 446 properties. The council described it as a success, but some landlords argued otherwise.
It is anticipated the cost of the new licensing scheme would be £820 for five years with a proposed fee of £630 for accredited landlords. The original fee had increased to £670 (accredited) and £890 (non-accredited) in March 2020.
The new proposals would also introduce a higher fee for less compliant landlords of £1,110, as well as a proposed block licence for certain blocks of flats. These fees are £1,840 standard fee, £1,125 accredited fee and a £2,295 less compliant fee.
To run the scheme the council says it will need roughly £22.4m to cover overheads including 94 staff members. No profit would be made.
During a meeting on the plan, Cllr Jane Lakey (Lab), who represents Bulwell, questioned whether the scheme was value for money.
She said: “It’s a very, very crude indicator but if 950-odd properties have been improved and then you are going to double the visits to properties in the next 10 months, and let’s be generous and say the number of properties doubles, that is around 1,800 properties improved, which is nice, in terms of averaging the cost out if you take that measure it would cost about £12,000 a property?”
Cllr Toby Neal (Lab), portfolio holder for housing, replied to say it was a crude estimate but argued if it did work out to roughly £12,000 a property, the scheme stopping injury and making rented-properties safe would be “good value for money”.
Under the new scheme, which was approved by the city council’s executive board on May 24 this year, just over 30,000 homes would be covered.
Questions over possible rent increases as a result of the scheme were again raised.
Cllr Angharad Roberts (Lab), who represents the Castle ward, said: “Going back to the point about landlords not being able to use the licensing scheme as a justification for increasing their rent, while I agree with that, I don’t think that will necessarily happen.
“Given that we are living at a time when there is significant inflationary pressures anyway, I would like to know what has been done in regards to the current scheme or could be done in the future scheme to try to monitor and evaluate any impact from Selective Licensing in terms of costs and levels of rent.”
Cllr Neal added: “We do monitor rent rates in the city. You can get lost in the argument that saying because it won’t make a difference doesn’t mean they won’t make a change, landlords will make a decision on what they want.
“The issues on pressures of rent are not to do with Selective Licensing, they are fundamental increases that are happening for a number of reasons, including the cost of property, it is a supply and demand issue, there aren’t enough houses, there aren’t enough properties, that is the reality of the situation. There is no indication of it having a substantive or even a minimal impact.”
But Mick Roberts, a landlord in Nottingham, argued this was not the case and rents had been rising due to the scheme.
He told the Local Democracy Reporting Service it would cost him £57,000 in fees. Fees for all homes owned must be paid up-front, which he describes as an “impossible task”.
He said: “Four years ago a two-bed in Nottingham was around £475, they are now £725. Three beds were £550, now they’re £850.
“Now we have got all these other issues in the UK, like supply and demand, and I agree with them, but in Nottingham Selective Licensing is one of the biggest causes of rent increases.
“If the last scheme was successful why aren’t they doing a renewal?”