Mandatory landlord and agent licensing has been in force for nearly a week, with fury over fees mounting.

As of Monday, November 23rd, all landlords that let properties in Wales must register through Rent Smart Wales and pay an online £33.50 registration fee.  Paper applications will see a fee of £80.50.

Additionally, those landlords who undertake maintenance or oversee the management of their properties must obtain a licence and undertake training, at additional costs of £144 and £100 respectively.  And that’s only for landlords who oversee management of their own properties.  Those individuals who manage properties on behalf of others who are not joint owners are deemed “agents” under the scheme, and must also pay for an agent’s licence at a fee of £144.  Agents that employ staff must pay the £3,728 fee for a licence.  Paper applications come at an increased cost of £4,368.

None of these figures come close to the initial costings Welsh Government set forth in its regulatory impact assessment when the scheme was first proposed back in 2014.  At that time, the registration fees were estimated at £50 for registration and £100 for a landlord’s license.  Agents were to see fees of £350 for a licence and training.

At the time, the RLA pointed out to the Government that its forecasts were woefully underestimated, especially in light of the fact that Government contended that licensing would be a self-financing scheme, without the need for additional public money to keep it running.

The Government proposed a staff increase from 1.5 employees under the then-Law Accreditation Wales scheme to 10.  The RLA questioned how the Government’s proposed staffing levels would suffice at this level.  This is the same staff that is supposed to manage an increase in landlord registrations from 2,000 to 130,000. This is a growth in landlord registration management by factor of 65[1], and a staff increase at a factor of 6.5 at 10 FTEs and by a factor of 3.3 at 5 FTEs

[1] 130,000 projected/ 2,000 current landlords.

Staff workload: Landlord Registrations

  FTE Registered Landlords Workload
Current (LAWS)
1.5 2,000 ca. 1,333 Landlords/FTE
Mandatory Licensing-Proposed (Initial) 10 130,000 13,000 Landlords/FTE
Mandatory Licensing (Final) 5 130,000 26,000 Landlords/FTE

 

But, the RLA has learned from a recent meeting with Rent Smart Wales that 37 new staff have been employed to help administer the scheme.  This is over a 200 percent increase on their initial estimate.

This seems to answer the question about the need for the debilitating £3,728 agent fee especially.  The fee that is over 10 times what the Government proposed is the driver of the “self-financing” scheme. The Government states this directly in its impact assessment:

At 7.29, “…operation costs, including for the Fit and Proper Persons test and monitoring and enforcement, will be met by fees payable by landlords, responsible persons and agents on registration and thereafter, at the end of each five-year period when re-registration will be required.”

The fee also explains  why our calls for information about fees in advance of the scheme’s launch went totally unanswered.  We were right and they are wrong.