Other councils should not even think about introducing blanket licensing of private rental properties until it is clear how the controversial Newham scheme is faring.
The call has come from London letting agent Robert Nichols, director of Edmund Cude, which manages properties in Newham.
Nichols said that the scheme could well prove to be a bureaucratic nightmare for the council, as well as for tenants.
He expressed deep concern that Liverpool City Council is already embarking on launching a similar blanket licensing scheme – one covering over 50,000 properties and will be even larger than Newham’s 35,000-strong portfolio.
Nichols warned Liverpool agents and landlords what they might expect: “In terms of the Newham process, anyone can apply for a property licence. However, they must be the most appropriate person to do so.
“Normally this will be the owner or a manager employed by the owner. The proposed licence holder needs to be the most appropriate person, namely the landlord, person in receipt of rent or in control of the property.
“At the very least, the council expects the licence holder to have the power to let and terminate the tenancies, and access all parts of the premises to the same extent as the owner.
“There are no timescales given anywhere, probably because Newham Council don’t know themselves and haven’t got the manpower to process all the applications.
“If they had ten people working for seven hours a day on this and it took an hour to process each application, it would take at least two years. And all that is before they even start tackling the problems.
“I am also assuming they have a dedicated team of ten, which is unlikely.”
Newham Council expects to spend £329,000 in the first year on promoting and implementing the scheme, including IT systems and recruiting additional teams of temps. It expects the scheme to break even from next year onwards.
Nichols went on: “The scheme itself is deeply flawed. It’s not yet clear as to whether or not the landlord licensing scheme will lead to an exodus of landlords from the borough – only time will tell. However, by burdening landlords with an extra piece of bureaucracy, Newham Council risks de-incentivising landlords from operating in the area.
“All this comes at a time when the private rental sector plays an invaluable role in reducing the national housing deficit and we should be doing all we can to encourage, not inhibit, landlords.
“Furthermore, it is largely duplicative in terms of the existing legislation available to tenants to address sub-standard living conditions. A tenant education programme would be more cost-effective.
“At this stage, our concern is that other councils, such as Liverpool, will look to embark on similar initiatives before the negative fallout of Newham’s licensing regulation becomes apparent.”
However, the Mayor of Newham, Sir Robin Wales, is as unrepentant as Liverpool seems determined to press ahead.
Wales told the BBC: “When we consulted our residents, a massive majority were in favour of this. The bad behaviour occurs in the bad properties – the anti-social behaviour, the mess in the garden. We need to go after them.”