Selective Licensing Scheme 2022: Year 3 Progress Report (1 September 2024 to 31 August 2025)

Executive Summary 

This report summarises Year 3 progress of Oxford’s Selective Licensing Scheme, highlighting achievements, operational improvements, enforcement activity, and key challenges.

The scheme aims to improve housing conditions in the private rented sector across the city, directly benefiting tenants through safer living environments and landlords by promoting consistent standards and reducing risks associated with non-compliance. 

Key Achievements 

Licensing Progress:

• By the end of Year 3, 12,876 applications were received. When accounting for block licences covering more than one property, a total of 14,516 properties are covered by the scheme.
• A new KPI was introduced to issue 80% applications within 12 weeks of licence. A total of 936 new applications were received in Year 3 with 96.51% processed within KPI and average time taken 6.2 weeks.
• Overall, 98.95% of all applications received were processed to draft licence stage, withdrawn or refused. Most remaining applications to process are “Block Licences”. These take considerable time to ensure they are not HMOs known as “poorly converted flats” that do not comply with Building Regulations.
• In total, 19 applications have been refused licences. These are all due to being HMO properties and therefore a Selective Licence is not appropriate.
• In total, 13 licences have been issued for 1 year due to management concerns.

Proactive Inspections and Enforcement: 

• In total 1,092 inspections have been undertaken since the start of the scheme under the Housing Act 2004 Housing Health and Safety Rating System (HHSRS), with 31% of properties assessed as having a Category One hazard. An independent review in 2020 estimated 20% of properties would contain a Category One hazard demonstrating why intervention is necessary to improve homes.
• An increase in Enforcement Notices served, with Year 3 accounting for 48% of all notices served.
• The total number of cases investigated in Year 3 accounts for half of all investigations, showing increase in enforcement for failing to hold a selective licence.
• Almost half of licences (49.6%) issued in Year 3 were charged at the Higher rate for failing to apply within 12 weeks of becoming licensable, demonstrating the Council financially penalises those landlords who fail to apply promptly.
• Four financial penalties for failing to licence were issued in Year 3.
• Oxford’s reputation as a national leader is demonstrated through a number of Council’s contacting us for advice on property licensing schemes. Oxford City Council was selected as an MHCLG partner to trial the Renters’ Rights Act Landlord database and expanded Rent Repayment Order powers to include Universal Credit specifically due to the large scale licensing scheme.

Operational Improvements: 

• In Year 3, a new KPI for issue within 12 weeks of date of application was introduced. 96.51% licences were issued in target.
• It now takes an average of 6.2 weeks to issue a licence.
• Timing studies demonstrate process time per application reduced from 2.5hrs to 1.25hrs for applications that do not require any additional follow up.
• Use of digital inspection form rolled out to all officers in Residential Regulation Team which has reduced time spent on inspection notes and case administration.
• Officers were recruited to Residential Regulation Team in Year 2 (summer 2024) now fully upskilled in Property Licensing work.
• Financial reporting improvements developed with Finance Services to fulfil financial auditing requirements.

Challenges 

Recruitment and Retention and impact on work:

• Vacancies necessitated the hiring of contractors, which impacted budget and efficiency. 
• Due to lack of resources in Residential Regulation Team, planned work on guidance for landlords on property standards and other improvements on the website have been delayed;

System and Procurement Issues: 

• Delays in supplier upgrades for data systems have limited the ability to report comprehensively on inspections, in particular reporting on properties improved following intervention. Case management remains challenging without direct supplier connection.
• Procurement for large scale inspection contract was complex due to large monetary value and procurement / legal sign off process.

Lessons Learned 

• Training for Residential Regulation Team is complex and takes 2 years to fully train in all necessary duties.
• Inspections undertaken on two software systems have proved problematic for data reporting. In Year 4, inspections will solely be on one system.

Future Focus (Year Four) 

• Launching a large-scale proactive inspection programme in 2026.
• Increasing enforcement for unlicensed properties.
• Issue the remaining back log of applications.
• Increase large-scale inspection programme.
• Improving reporting capability.
• Investigation of unlicensed properties

Purpose: To update on the implementation of the Selective Licensing scheme 2024

The Selective Licensing scheme started on 01 September 2022 and expires on 31 August 2027. The scheme requires landlords of privately rented properties across Oxford to obtain a licence, ensuring homes meet safety and management standards. Before the scheme started, in autumn 2020, the Council conducted a statutory consultation exercise. In March 2021, the Council approved 2 designations covering the whole city area. The Department for Levelling Up, Housing and Communities (DLUHC) confirmed the designations in April 2022. 

The Council estimated that 12,000 properties would need a licence, with 7,200 applications expected in year 1. The Council predicted it would take 12 months from date of application to issue a licence. 

A licence is issued per property to a “licence holder”. The licence holder (and any manager) must be a “Fit and Proper Person” to ensure the property is satisfactorily managed. The licence holder is normally the owner (landlord) however a managing agent or other suitable person can hold the licence. Licence Holders are permitted to reside overseas, providing they demonstrate satisfactory management arrangements.

After issuing the licence, property inspections take place. A risk rating system identifies properties likely to be in the worst condition. The Council expects to inspect 60% of licensed properties during the lifetime of the scheme. 

Why Selective Licensing? 

The private rented sector in Oxford is one of the largest in England. An independent review in 2020 estimated that 49.3% of the city's housing stock was privately rented, or 30,508 (including HMOs and student halls of residence). The 2021 census predicted that 32.2% (17,762) of households lived in the private rented sector (including HMOs however excluding student halls of residence). Both datasets confirm the private rented sector in the city is significantly above the 2020 national average of 19%. 

The 2020 review of housing conditions estimated 6,242 (20.5%) of dwellings in the private rented sector were predicted to have at least one Category 1 hazard. This compares to the 2020 national average of 12% and is almost double the regional average of 10.3%. The intense competition for affordable accommodation in Oxford has led some landlords to let property in poor, unsafe, and sometimes dangerous conditions. 

The Council has operated HMO licensing since 2006, expanding to a citywide basis in 2011. With selective licensing, any privately rented property within the city (unless statutorily exempt) now requires a property licence to operate. By the end of year 3, over 17,500 private rented properties are covered by our licensing schemes, indicating the census figures were likely inaccurate due to data collection during Covid-19 lockdown. 

DLUHC requested the Council submit regular progress reports. Consultation feedback highlighted the need to report throughout the scheme on progress. This is the Year 3 progress report. 

Applications and Licensing Progress 

Application Volumes 

In year 3, we received 936 applications with 12,876 applications received since the start of the scheme and including 159 block licences, applications covered over 14,100 properties. We expected 11,420 applications by the end of the entire scheme. 

The Council issued 2,073 final licences in year 3, with 11,694 final licences issued by end of year 3. When accounting for withdrawn applications, 97% licences have been processed to completion (licence grant, licence refusal or licence withdrawn). A total of 12,072 (94%) applications received a draft licence. 

A total of 241 licences were varied (changed) and 457 licences have been revoked (cancelled). Licence revocations are normally due to sale as licences cannot be transferred. No revocations are due to Fit and Proper Person concerns.

Processing Improvements 

A key performance target (KPI) was introduced at start of Year 3 to issue 80% licences within 12 weeks of application date. 97% applications received in Year 3 were issued within this KPI with an average process time of 6.2 weeks. For applications received in Year One, the average process time was 56.2 weeks and for applications in Year 2, the average was 31.1 weeks. The improvement mostly relates to lower volumes received however time costing studies demonstrate the average time per application has reduced, from 2.5hrs to 1.25hrs for applications that do not require additional work.

Block Licences and Complex Applications 

A number of applications from the early bird period remain outstanding. These are primarily block licence applications (where one application covers multiple flats) due to their complexity. A block licence can only be issued where it is a purpose-built block or the conversion to flats has Building Control completion. Where a property has been converted into flats without Building Control completion, it is classified as a House in Multiple Occupation under the Housing Act 2004 section 257 and falls under Additional HMO licensing.

Resourcing problems in the Residential Regulation Team delayed processing these applications. The aim is to have issue a draft licence or draft refusal to licence for all outstanding applications by 31 March 2026.

Licence Conditions 

Each property licence contains 23 conditions, including matters such as gas safety, electrical safety, furniture safety, providing and maintaining smoke alarms, and supplying occupants with written terms of occupancy. 

Before a licence is issued, applicants can make representations to the council about the proposed conditions. In year 3, 74 landlords and agents made representations about draft licences, equating to 4.7% of draft licences issued. The data indicates that the majority of landlords are satisfied with the proposed conditions. 

Most representations received have been regarding permitted numbers. When reviewing representations, either the applicant made an error on their application, or the room size is within a permitted tolerance range. A small minority of representations have required an inspection to determine numbers. 

Engagement with Landlords and Letting Agents

The council holds twice-yearly Landlord & Agent forum sessions (one in person and one online), sends regular newsletters and maintains information on the website. Slides from the forum are made available on the council website. Online forums are recorded and audio-visual recordings made available. It is not possible to record in-person sessions due to equipment limitations at the Town Hall. 

In November 2024, 111 people booked to attend an in-person landlord & agent forum focused on:

• Available funding and other support for improving energy efficiency;
• Technology available to help with damp and mould (delivered by AICO – a company procured by ODS to supply fire detection & alarms to our own stock);
• Refugee resettlement schemes operated by Oxford City Council and how landlords / agents can support us;
• Oxford City Council’s Rent Guarantee scheme for landlords
• HMO & Selective Licensing update

In May 2025, 90 people booked (100% capacity) to attend an online landlord & agent forum focused on:

• Renters Rights Bill (delivered by the National Landlord Association)
• Fire Safety (delivered by Oxfordshire Fire and Rescue Service)
• Energy Efficiency updates
• HMO & Selective Licensing update

Nine (9) newsletters were sent in Year 3; this the same amount as sent in Year 2.

Publicity has also taken place via the Communications team with social media posting and news reports. 

Inspection Programme 

Risk-Based Approach 

Over the scheme, the aim is to inspect 60% of the licensed properties. Inspections will be either reactive (following a complaint) or as part of the proactive inspection programme. The inspection programme is risk-rated. This assessment is part of the licence application processing and is based on the compliance history of the landlord/manager and the information in the application documentation. The Council inspects properties with a high likelihood of hazards. Block licences are high priority irrespective of compliance history. 

This ensures that non-HMO properties are inspected proactively rather than waiting for an occupier to complain.

Inspections are under the Housing Act 2004 Housing Health and Safety Rating System. Upon inspection, we assess the property for hazards in all cases. Where hazards are noted, a full assessment using the Housing Health and Safety Rating System (HHSRS) is undertaken. 

Inspection Results

In total 1092 inspections have been undertaken since the start of the scheme, either reactively or proactively with 69% inspections completed in Year 3, demonstrating significant increase for inspection work.

In 75% properties, at least one hazard has been noted and required a full HHSRS assessment. On assessment, 31% of total inspected properties were assessed as having a Category One hazard. However, the higher proportion of reactive inspections to pro-active inspections may affect this result. Further analysis needs to be completed.

In 2020, the Housing Condition Stock modelling survey indicated 20% properties had a Category One hazard. Our inspection data demonstrates why intervention was necessary.

Under the HHSRS, a hazard is given a Band ranging from A (most serious) to J (least serious). Bands A to C are classed as Category One, Bands D and below are Category Two. The Council will typically require remedial works for Bands A – E. Hazards in Band D and E typically require action to prevent the hazard becoming worse. In 63% properties inspected, hazards were identified at action intervention level (A to E hazards). This demonstrates why intervention was necessary.

Reviewing the action intervention level on a ward basis demonstrates differences across the city. Six wards had an action intervention level above 75% of properties inspected: Barton & Sandhills, Lye Valley, Marston, Northfield Brook, Temple Cowley and Wolvercote. Five wards had an action intervention level below 50% of properties inspected: Donnington, Headington Hill & Northway, Osney & St Thomas, St Mary’s and Summertown. At this stage of the inspection programme, it is too early to draw any conclusions regarding property condition in different wards. Further analysis needs to be completed.

When looking at the total number of hazards assessed, 2,688 individual hazards were identified. On average, each property assessed contained 3 individual hazards. Of those individual hazards, 65% fall into Bands A to E demonstrating the reason why Selective Licensing is required to improve homes with both Category One hazards and high-scoring Category Two hazards that affect occupant health, safety and well-being. Of those individual hazards, 61% assessments are in Bands C to E demonstrating most properties do not have the most serious scores however there is a high level of poor management of properties.

The most commonly identified hazards are Fire, Damp and Mould and Excess Cold.

• Over 80% properties assessed under HHSRS contained a Fire hazard with 68% at the intervention level.
• Over half properties contained a Damp and Mould hazard however only 51% of these are at the intervention level.
• 95% Properties with an Excess Cold hazard require intervention. The national average for Excess Cold is a Category One hazard, so inspection findings reflect national trends.
• Over 72% properties identified with Falls on Stairs, Falls on the Level and Crowding and Space hazards require intervention.

Top Ten Hazards

A current challenge is reporting on property improvement following intervention due to system limitations. In Year 4, reporting will be developed.

Enforcement Actions 

Once an inspection has been completed, we will consider serving formal notices. However, before doing so we give landlords the opportunity to remedy hazards to avoid service of notice. Those in receipt of formal notices have the right to appeal to the First Tier Tribunal. Failure to comply with a notice could result in a prosecution or financial penalty and / or works in default.

• Improvement Notices require remedial repair within a given time-frame.
• Hazard Awareness Notices are served to advice of works however not require completion. Most of these cases relate to over-crowding where it is not reasonable to give a timescale for occupants to move out given high housing demands in Oxford or where occupants do not wish for improvement works.
• Prohibition Orders can also be served to either prevent occupation of the entire property, part of a property or limit numbers. Most of these cases relate to limiting numbers for over-crowding where it is not reasonable to give a timescale for occupants to move out given high housing demands in Oxford.
• An Emergency Prohibition Order can be served where there is an imminent risk to life preventing occupation immediately.
• Emergency Remedial Action can also be taken where there is an imminent risk to life. These notices are often for failure to have working smoke alarms in the property.

Enforcement through notice service has increased in Year 3.

Notices Served

Unlicensed Properties

To ensure the scheme is effective, the Council also investigate unlicensed properties. Failing to license a property may result in a financial penalty or prosecution. Feedback from the 2020 consultation was that for the first year of the scheme we should inform landlords of the need to licence before taking enforcement action. This continued into year 3.

In Year 3, 1,028 licences issued were charged the Higher Fee rate which is a significant increase compared to 528 licences in Year Two.

Almost half of licences (49.6%) issued in Year 3 were charged at the Higher rate for failing to apply within 12 weeks of becoming licensable, demonstrating the Council financially penalises those landlords who fail to apply promptly.

All reports of unlicensed properties are investigated. Since the start of scheme, the Council have undertaken 324 investigations into un-licensed properties of which 159 (49%) were in Year Three demonstrating increased awareness and enforcement of the scheme. Four financial penalties were also issued this year, demonstrating increased enforcement.

• 40% have made an application,
• 30% determined exempt,
• 23% resolved / closed,
• 7% still under investigation.
• Four financial penalties have been issued, representing 2% of those cases identified as licensable.

In Year 4, work will continue to identify unlicensed properties

Rent Repayment Orders 

Tenants can also apply for a rent repayment order from the First-Tier Tribunal to reclaim up to 12 months rent where the property was unlicensed. In Year 3, 11 cases were recorded specifically as Selective Licence rent repayment orders equating to 39% of Rent Repayment Order enquiries.

Income and expenditure

The below table from the Cabinet designation in 2021 shows the predictions for a cost neutral scheme. As the scheme operates over 5 years this must be reviewed regularly, however changes should not be made unless the reviews show a sustained change in the income and expenditure.

It must be noted that when designing the scheme in 2020/21, the costs were attributed to the year the application was made and not necessarily when incurred (e.g. an application made in Year one includes cost of inspection however inspection may not occur until Year 3).

General application costs (representations, variations etc)

• Scheme Costs: £4,998,379
• Scheme Income: £5,065,342
• Difference: £66,963

Note

Income: Licence fees paid in two parts. Stage One at application and Stage Two when draft licence issued. Original income modelling based on assumption both Stage One and Stage Two fee was received in same year as application.

In total, 12,873 applications have been received since the start of the scheme which is 23% higher than predicted by end of year 3 and exceeds the total expected by end of scheme (11,420).

As the scheme commenced in September 2022, alignment to the fiscal year is necessary.

Total Income: £3,704,226

Total Costs: £2,801,469

Note

Income: Income: Licence fees paid in two parts. Stage One at application and Stage Two when draft licence issued. Actual income reflects Stage Two fee may be paid in a later scheme year.

• The large-scale inspection contract in place during Year 4 and Year 5 will mean the scheme remains cost-neutral.

Challenges and Lessons Learned  

Recruitment and Staffing 

Staffing continues to be challenging for the Residential Regulation Team due to national shortages in skilled environmental health officers and ability to provide quality training. Officers in the Residential Regulation Team are multi-skilled working on Selective & HMO licensing inspection & enforcement as well as miscellaneous public health and nuisance. It takes 2 years to fully upskill an officer. Officers recruited in 2023 and 2024 are now settled, as demonstrated by significant increases in enforcement work in Year 3.

However, vacancies remain and 1 contractor is employed to cover reactive HMO & Selective licensing work and 4 contractors are employed for proactive licensing inspection work. These challenges delayed landlord guidance development. 

Lesson learned: Takes 2 years to fully upskill officers in all areas of Residential Regulation work and a training plan has been key to upskill officers.  

Inspection Contract Procurement

Initial procurement in summer 2023 received only one over-budget bid. After supplier consultation, the contract was redesigned and a provider selected in Autumn 2024. While some proactive work commenced in Spring 2025, this had to be paused due to internal governance and legal contract. This work has now commenced in Year 4.

Lesson learned: Include delegated procurement powers in the designation report to Council to avoid future delays.

System and Process Challenges 

Delays in supplier upgrades for data systems have limited the ability to report comprehensively on inspections, in particular properties improved following intervention. Licence processing and inspection case management remains challenging without direct supplier connection.  However, improved financial reporting methods were successfully developed with Financial Services to fulfil financial auditing requirements and changed accounting methods.

Lessons learned: Close working with Finance Services during scheme development and set up ensured good understanding of previous accounting method to assist with the changed method.  

Achievements Despite Challenges 

Inspection activity increased significantly with 69% of the 1,092 inspections completed occurring in Year 3.

Enforcement activity also increased significantly, with 49% of unlicensed property work and 51% of notices served during the scheme occurring in Year 3.

Developed improved financial reporting to comply with audit requirements.

Oxford’s reputation as a national leader continues to be demonstrated through a number of Council’s contacting us for advice on property licensing schemes. Oxford City Council was selected as an MHCLG parter to trial both the Renters’ Rights Act Landlord database ad expanded Rent Repayment Order powers to include Universal Credit specifically due to the large-scale licensing scheme.

Conclusion

The number of applications continues to exceed predictions. Over 97% of applications now received are issued within the KPI to issue within 12 weeks of application date.

Year 4 will focus on issuing the remaining licences received prior to 1 September 2024 with aim to issue by 31 March 2026.

Inspection and enforcement work increased during Year 3. This will contribute to into Year 4.

Monitoring data