The High Court on selective licensing

Houses iStock 000007619264XSmall 146x219A council has successfully defended a High Court challenge to its decision to implement mandatory selective licensing in certain areas of the borough. Jonathan Manning and Justin Bates explain why.

In R (Rotherham Action Group Ltd) v Rotherham MBC [2015] EWHC 1216 (Admin) (Stewart J) the High Court has held that that a local housing authority which is considering whether to make a selective licensing designation (s.81(4), Housing Act 2004) must consider whether other options are available before making any designation, but can lawfully make a designation even if there are other options which might be available (e.g. a voluntary accreditation scheme). Any challenge to a decision to make a designation is on the Wednesbury basis.

The Housing Act 2004 Act permits local housing authorities to designate the whole or parts of their areas as areas subject to selective licensing. In general terms, this applies to privately rented houses which are not Houses in Multiple Occupation (i.e. those which are let as separate, or single, dwellings – ss.79, 99). A local housing authority may make a designation if they consider that, inter alia, the area or areas suffer from low housing demand and the making of a designation will contribute to the improvement of the social or economic conditions in the area (s.80).

Before making a designation, the authority must take reasonable steps to consult persons who are likely to be affected by the designation and consider any representations made in accordance with the consultation which were not withdrawn (s.80(9)). In addition, an authority must not make a designation unless they have considered whether there are any other courses of action available to them that might provide an effective method of achieving the objective or objectives that the designation is intended to achieve (s.81(4)).

If an authority makes a designation, the effect is to require landlords of properties specified in the designation, and within the area to which it applies, to apply for and obtain a licence, failure to do which is a criminal offence (2004 Act, ss.80-84). Licences will incorporate licence conditions relating to the management of the property failure to comply with which is also a criminal offence (s.90).

Between January and March 2014, the respondent authority consulted on proposals to introduce a selective licensing scheme in five parts of their borough. In July 2014, the Overview and Scrutiny Committee of the authority recommended that a landlord led voluntary scheme be pursued as an alternative to selective licensing. Following that recommendation, officers conducted further analysis of the consultation data and recommended that the scheme be introduced in four smaller parts of the borough, where it was considered that landlords would be unlikely to comply with a voluntary scheme. In December 2014, the authority made four designations, in line with the recommendations of officers.

The claimant was a company established to pursue the present claim by various private landlords in Rotherham. It sought judicial review of the designations, contending that there had been inadequate consultation and that the authority should have pursued a voluntary scheme as recommended by the Overview and Scrutiny Committee, since that was another course of action which might achieve the same purpose as making designations.

The High Court refused permission in respect of the consultation challenge, but granted permission to challenge the decision to introduce a selective licensing scheme in preference to a voluntary scheme.

The claim was dismissed. Section 81(4) required the authority to consider whether there were courses of action (other than a designation) which might be effective. That plainly had been considered in the present case. It was open to an authority to conclude that a designation should be made even if there were other courses of action which could be taken. The claimant needed to show that the decision to make a designation was Wednesbury unreasonable. It had failed to meet that threshold. The Overview and Scrutiny Committee was not a decision-making body and the authority was not bound to accept its recommendations. Whatever the merits of the recommendations it had made, there was nothing irrational in the authority preferring to make a designation. The areas which were designated were smaller than the areas proposed for the voluntary scheme, so that there would be expected to be a greater concentration of “bad landlordism” within those smaller areas.

Jonathan Manning and Justin Bates are barristers at Arden Chambers and acted for the local authority in this case. Jonathan can be contacted on 020 7242 4244 or This email address is being protected from spambots. You need JavaScript enabled to view it., while Justin can be reached on 020 7242 4244 or This email address is being protected from spambots. You need JavaScript enabled to view it..