There are currently at least 50 councils across England that operate licensing schemes in the buy-to-let sector. While certain rental property types always require a licence to operate, other areas fall under selective or additional licensing programmes

The scheme in Liverpool ran out on 31st March after running successfully for five years. At the time of its expiry, there were 10,000 landlords holding licences in the city with around 52,000 rental properties.

While the council had applied for a five-year extension, the government rejected it. According to them, there was not enough evidence to back up the application and prove the need for a licensing scheme.

With the scheme no longer active, landlords in Liverpool are now operating without licences. So if you own a buy-to-let property there, or are considering investing in one, that is the current situation. The exception is for large HMOs (houses in multiple occupation), which still require a mandatory licence to operate.

The council has criticised the rejection, though, and is going to challenge the government’s decision. It has now filed a High Court action to seek a judicial review of the decision.

Landlords who want a licence in an area where selective licensing operates must carry out safety checks on their properties. They must also register their details with the council. The council can carry out inspections, raise issues and enforce action and penalties if necessary.

According to Liverpool, and many other councils across the country, the schemes help to “weed out” bad landlords. By setting minimum standards, the rental market becomes safer for tenants. For good landlords willing to invest in their businesses, getting a licence shouldn’t be an issue.

However, some have criticised licensing schemes as being too harsh. Others believe they penalise good landlords, and the licence fee is an added expense. They think the burden of the fees is taken on by reputable landlords who stick to the rules, while rogue landlords simply move elsewhere.

Regardless of the licensing situation in Liverpool, and how it resolves, it is one of the most attractive cities in the UK to be a landlord. Property there is much more affordable than many other areas of the country. As such, it repeatedly comes out as one of the highest-yielding property investment locations. There are also plenty of investment projects and developments in the pipeline in the city.