Licence to let

Think tank: Centre for London

Author(s): Jon Tabbush; Zarin Mahmud

June 2, 2023

This report from UK think tank the Centre for London looks at how property licensing could better protect private renters.

This report explores the potential of selective property licensing to improve conditions in London’s private rented sector. More than one million London households rent privately in order to live in the capital. With such high levels of demand and a shortage of homes, too many Londoners end up in poor-quality, insecure and unaffordable housing. Nearly 20% of private rented accommodation in London fails to meet basic housing needs, and more than half of all Londoners who rent have experienced their landlord failing to make repairs to their home when needed. Rising prices and a lack of social housing mean demand for renting in London is twice as high as it was 20 years ago, so we need action from the government now to make sure that renters have decent, safe and secure homes to live in. What if we required landlords to own a licence in order to rent out their property, with conditions that they needed to follow in order to obtain it? This is what happens through ‘selective property licensing’, which some councils have been using to improve property standards in their local private rented sectors. In areas with licensing schemes, landlords must apply to their councils, meeting minimum requirements such as proof of smoke detectors and a gas safety certificate. The evidence suggests that property licensing improves housing standards. Despite this, councils are being held back by current regulations from using this as effectively as they could be. The government has the power to fix this. The government’s new Renters Reform Bill, currently going through Parliament, is a big step forward for renters’ rights in the UK. It promises to end no-fault evictions and make sure renters have increased security. Part of the Bill’s proposals include a ‘Property Portal’. This is otherwise known as a national landlord register, and will provide tenants with more transparency about who they are dealing with. But this Portal is far from enough to deal with London’s housing issues by itself. The government needs to make sure their Portal complements local authorities’ efforts to enforce standards and support tenants.