North Yorkshire Council
Executive Member for Culture, Arts and Housing
8 July 2026
Approval to consult on the renewal of Selective Licensing Area 3
Report of the Corporate Director Community Development
1.0 PURPOSE OF REPORT
1.1 To provide the Executive Member for Culture, Arts and Housing with the findings from the Scarborough South Selective Licensing Scheme (SL3) evaluation.
1.2 To provide the Executive Member for Culture, Arts and Housing with a Business Case for renewal and small extension of the Scarborough South Selective Licensing Scheme.
1.3 For the Executive Member for Culture, Arts and Housing to approve the Public Consultation Plan developed as part of the Business Case.
2.0 SUMMARY
2.1 Selective Licensing is a useful tool to help better regulate the management of private rented accommodation and improve property conditions in any given area, contributing to a safer and more desirable living environment. Through the Housing Act 2004 and associated guidance, the Government sets out the procedural steps that need to be followed prior to any potential Selective Licensing designation or scheme renewal.
2.2 In such an event, it is best practice for local authorities to prepare a business case - setting out the reasons for new or continued designation of a given area; and as part of this process, consult with the affected parties. This report includes said Business Case and asks for approval to undertake public consultation in respect of the Scarborough South Selective Licensing scheme (covering parts of the Weaponness and Ramshill ward in Scarborough – map at Appendix A) and to report back the outcomes of this exercise to the Council, in order to inform future decision making.
3.0 BACKGROUND
3.1 On 1 May 2022, following approval from Scarborough Borough Council and the Secretary of State, the Scarborough South Selective Licensing scheme became live, to remain in place until 30 April 2027. Designation for the area (a combination of two LSOAs) was agreed based on data collated in 2019, which formed part of the original business case:
· Housing Stock - 58.1% of the area to be designated was privately rented, in comparison to 19.5% for the whole Borough. 89% of properties were flats (25% for the Borough) and almost 12% of households had no central heating (4.5% for the Borough).
· Deprivation - the whole of the designation area was within the most deprived 20% nationally as per the Index of Multiple Deprivation (IMD).
· Employment - 17.9% of residents in the designation area aged 16-64 were receiving ‘out of work benefits,’ compared to 10.8% Borough-wide.
· Crime - the designation area had higher crime and ASB rates than both the Borough and national averages.
· Housing Enforcement - 66 separate housing related complaints were received in the 2 years prior to designation (1 in 3 had Category 1 hazards, compared with 1 in 6 throughout the whole Borough).
3.2 Before coming to an end, designation should be reviewed to consider whether it has achieved its aim - in the case of SL3, this was to improve private property standards and management in the designation area and reduce incidents of Anti-Social Behaviour. Authorities can allow designation to end, meaning relevant landlords would no longer be required to license their private properties within the area, or they can consider renewing the designation (with or without amending the area under designation, or the discretionary license conditions set).
3.3 In order to renew the scheme, the same procedure must be followed as though considering designation for the first time - completing a business case, undergoing the required consultation for a minimum of 10 weeks, and issuing public notice. The also includes the standard 3-month waiting period before designation becomes live.
3.4 A desk top evaluation of the SL3 scheme has been undertaken - the outcome of which is outlined in this report. Based on the findings, a business case for renewal of the Scarborough South Selective Licensing designation has been developed. This also includes the extension of licensing to the entire of Valley Road (evens 32-58 already included) and the entire of Esplanade Gardens (only no. 37 currently included). This would include approximately 190 new households.Subject to approval, public consultation would be undertaken from 3 August to 12 October 2026.
3.5 Following completion of the public consultation and collating the findings, a further report is expected to be presented to Executive in late 2026. Should designation then be approved, this would commence on 1 May 2027, following a three-month Public Notice period, allowing the current Scarborough South designation to continue without interval.
4.0 REVIEWING AND RENEWING THE SCARBOROUGH SOUTH SCHEME
4.1 A desk top evaluation of the SL3 scheme has been undertaken. Based on experience of previous scheme evaluations (which included a very low response rate to consultation efforts) officers made this the primary data source in providing meaningful information as to the impact and outcomes of the designation.
4.2 A full report on this data is included as Appendix B to this report. However, a summary of the key findings is outlined below:
· 550 licenses were expected to be issues; with the actual number being 528 to date (related to 1073 individual addresses).
· 77 licenses were returned, refused or withdrawn – relating to property sales.
· Only 7 inspections of the 1073 licensed addresses remain outstanding.
· 660 Category 1 hazards were identified – 364 (55.2%) have been resolved.
· 1697 Category 2 hazards have been identified and over 60% resolved.
· 1343 issues with licensing conditions were identified.
· NYC have served 6 Improvement Notices; 3 Prohibition Orders; 3 Emergency Remedial Actions; 1 Emergency Prohibition Order; and 1 Request for documents to be produced.
· Incidents of ASB in SL3 increased from being 4.94% of all crime recorded in Scarborough in 2019, to 5.92% in 2025. The actual number of incidents recorded went down. However, this reduction was only 8.75% compared to 23.86% Borough-wide.
· Between 2019-2025, property prices rose in the SL3 scheme area by 19%, with a similar increase of 20% for the local area. These are both below the borough-wide price increase of 28%.
· When designation commenced, there were 60 Long-Term Empty Homes in the SL3 area (3.4% of total stock). As of April 2026, this had increased to 79, representing 4.2% of that same total stock. However, this is representative of the market generally.
4.3 The data gathered as part of this evaluation shows that the scheme has had a significant impact on the number of private rented properties that the Council has been able to access, and the number of landlords we have been able to engage with. Without designation and the associated powers to inspect properties, there is a risk that only a small proportion of these hazards would have been identified and subsequently resolved. This could have led to numerous residents living in potentially unsafe properties, which impacts on health, safety and general wellbeing. In particular, the resolution of Category 1 hazards is very welcome - the most serious form of hazard, representing an imminent and serious risk to health and safety. Designation has therefore led to an improvement in the property condition of private rented homes in the SL3 area.
4.4 The scheme also works to ensure that landlords are fully aware of their responsibilities and are meeting these effectively; and allows the Council to take formal enforcement action against landlords who have failed to manage their properties effectively. Without the scheme in place, it is highly likely that a number of problematic landlords would not have been identified and would have continued to manage their properties in an inappropriate way, potentially risking the health and safety of their tenants.
4.5 As part of renewal, the Business Case (Appendix C) also proposes an extension to the SL3 scheme on two streets, to include: the entire of Valley Road (evens 32-58 already included) and the entire of Esplanade Gardens (only no. 37 currently included). Since April 2021, both streets have been responsible for a high number of service requests to the Council’s private housing standards team. Common complaints include fire safety, a lack of heating and/or hot water, damp and mould, unsecure entry doors and broken windows and illegal eviction. By extending licensing, we can extend the evidenced improvements seen as part of the Scarborough South scheme - improving property conditions, setting standards and making landlords more accountable in the management of their properties.
4.6 Improvements can however be fragile, and by renewing the scheme, the Council can continue to provide a proactive regulatory framework that prevents regression, ensures landlords meet required standards, and protects vulnerable tenants who may not report issues themselves. Allowing the scheme to end risks undoing the progress made so far.
4.7 Previous consultation responses (primarily received from landlord operating in the area) did raise concerns as to the potential adverse impact of Selective Licensing on rental values and the housing market. Whilst the data shows that property prices have risen less in the SL3 designation area compared with the wider borough; property values have risen in-line with the local area. The market is influenced by numerous factors, and evidence does not appear to link designation and a negative impact on house prices.
4.8 The impact of designation on the rate of Anti-Social Behaviour is also difficult to evaluate. The data highlights that ASB continues to be a problem in the area, with rates remaining much higher than the national average. Rather than indicate failure however, this highlights the need for continued, strengthened intervention.Ending the scheme now would remove one of the few tools that directly targets poor management practices, allowing irresponsible landlords to enter the market unchecked. Rates may also have risen if residents are now more confident in reporting issues, knowing that landlords are bound by the discretionary licensing conditions to try and resolve this.
4.9 Overall, there is sufficient evidence following the data analysis to justify seeking a renewal, and small extension, of the Scarborough South Selective Licensing Designation.
5.0 CONSULTATION TO BE UNDERTAKEN
5.1 Subject to approval, the aim of officers is to undertake a full public consultation on renewal from 3 August to 12 October 2026. This is a statutory requirement and must be undertaken for a minimum of 10 weeks.
5.2 The procedural document ‘Selective Licensing in the Private Rented Sector: A guide for Local Authorities’ was updated by MHCLG in December 2024 and sets out the consultation requirements we must undertake. This should include local residents including tenants, landlords (and where appropriate their managing agents) and other members of the community who live or operate businesses or provide services within the proposed designation; or those in the surrounding area but outside of the proposed designation that will be affected. Consultation must be widely publicised using various channels of communication.
5.3 A plan has been developed to support the consultation process (Section 11 of the Business Case), setting out the range of residents, organisations and public bodies to be consulted:
· All local residents and business within the proposed area (current and extended).
· All private landlords, letting agents and estate agents who own or manage property within the proposed area.
· Key public sector stakeholders.
· Community and voluntary groups.
· Local members.
5.4 It is proposed that consultation takes a variety of formats, including a questionnaire, community drop-ins, meetings with key stakeholders, and the opportunity to engage online with the consultation. A ‘Proposal Summary’ will also be shared with several key partners and stakeholders, who will be invited to share their response with us.
5.5 At the end of consultation, Members will be provided with a further report summarising the outcome of the consultation exercise. A final decision will then be required as to whether they choose to approve renewal of the Scarborough South Selective Licensing Scheme.
6.0 CONTRIBUTION TO COUNCIL PRIORITIES
6.1 North Yorkshire Council: Housing Strategy: 2024 – 2029
The Strategy’s vision is to: ensure good quality, affordable, healthy and sustainable homes that meet the present and future needs of all communities. As per Theme Three: Our Homes, officers identified a wider range of actions, which include:
· Tackling stock condition issues, improving poor quality housing across all tenures.
· Using our legal powers to enforce and raise standards in the private rented sector - taking a consistent and firm approach to raising housing standards, including the further development of selective licencing schemes.
· Taking forward the findings from the ‘State of the Nation’ report to develop targeted actions in locations with high concentrations of private rented stock, where there are identified issues.
6.2 North Yorkshire Council Plan
Sets out ambitions for stronger communities, reduced inequality, and improved quality of life. Renewal of Selective Licensing contributes to these outcomes by:
· Strengthening Communities - improved property management reduces ASB, stabilises neighbourhoods, and supports safer communities.
· Tackling Inequality and Deprivation - targeting areas with entrenched socio-economic challenges, improving living conditions and supporting wider regeneration efforts.
· Delivering High-Quality Public Services - enabling a consistent, transparent, and professional approach to PRS regulation across the new unitary authority.
6.3 Housing Standards Enforcement Policy May 2026
Moving towards a preventative service - identifying poor standards early and intervening before conditions worsen. Selective licensing strengthens the council’s ability to intervene early, provides a clear regulatory framework for enforcement, and ensures landlords meet legal obligations before issues escalate. As the data shows, good progress has been made under the existing scheme regarding property condition and resolving housing hazards. However, without renewal, there is a significant risk that standards will deteriorate, and previous gains will be lost.
6.4 North Yorkshire Homelessness and Rough Sleeping Strategy
In recent years, there has been an increasing reliance on the use of private rented housing for discharging our homelessness duties, making is increasingly important that the council is able to offer private rented accommodation that is safe, in good condition and properly managed. A high number of households placed in the private rented sector also need to be situated close to local amenities, which makes central Scarborough an ideal location. Selective Licensing helps to ensure that, within the designated areas, the council are only placing households in properties which have been licensed and inspected, providing suitable, sustainable homes for vulnerable residents.
7.0 ALTERNATIVE OPTIONS CONSIDERED
7.1 The council must also consider whether there are any other courses of action available that would achieve the same objective/s as those proposed as part of the scheme, without the need for the designations to be made. Alternative options include:
7.2 Option A: There is the option to allow Selective Licensing in the Scarborough South area to expire. This would allow private landlords to operate without license conditions in the area, and most properties would not be re-inspected unless a complaint was raised. This could however result in a large proportion of genuine issues not being addressed and is therefore not recommended. In-line with the Council’s commitments, there is a need to ensure that private rented homes are appropriately managed and regulated.
7.3 Option B: Instead, the council could look to undertake landlord accreditation and training. However, from previous experience, only a small proportion of private landlords operating throughout North Yorkshire are likely to come forward for formal accreditation, and few consistently attend landlord forums. These also tend to be landlords who are already managing their properties appropriately. Therefore, the vast majority of landlords the Council want to target do not benefit from these schemes.
7.4 Option C: The council can also use more significant enforcement tools against individual properties and their owners, where properties are having a serious negative impact on the community and all other options have been exhausted. However, these options are very resource-intensive in terms of officer time and knowledge, legal assistance and financial risk. The use of significant enforcement powers should also only ever be a last resort, meaning they would not address the scale of the issues in the private rented sector.
7.5 Option D: Another alternative is to rely on the impact of the new Renter’s Rights Act, which makes fundamental changes to the Private Rented Sector, improving overall condition and providing the Council with additional enforcement and investigation powers when it comes to unlawful landlord behaviour. However, this still relies on tenants being prepared to complain, and in areas where affordable accommodation is scarce i.e. throughout North Yorkshire, tenants are generally less likely to come forward, for fear of jeopardising their housing situation. Instead, it is likely that the creation of a new Private Rented Sector database (introduced as part of the Act) will improve our intelligence in this area and support licensing schemes, helping to target unlicenced properties and conduct compliance checks.
8.0 IMPACT ON OTHER SERVICES/ORGANISATIONS
8.1 The renewal of Selective Licensing in the Weaponness and Ramshill ward of Scarborough is intended to help contribute to tackling issues of poor property conditions and incidents of ASB in a planned preventative way, by uplifting standards of housing management and reducing demand on services such as the Police and Fire Service.
8.2 Renewing SL3 will however result in an increased workload for the Council’s Housing Renewals team - most notably Private Housing Standards, as properties will need to be reinspected and licensing renewed. The licensing fee is expected to fund the additional burden of this work, but it is acknowledged this team are already under significant pressure due to the increased resource required as part of the Renter’s Rights Act.
9.0 FINANCIAL IMPLICATIONS
9.1 On initial designation, it was estimated that the cost of administrating the SL3 scheme would be in the region of £345K over the 5-year period (based on granting 550 licences). To meet the scheme running costs, Scarborough Borough Council agreed a £550 charge for a single-unit property with a single license, with an additional £100 per property for landlords with multiple-unit properties (so, if a landlord owns four flats in the block, then the total licence fee will be £850 - £550 for the first flat and £300 for the other three). This would result in one license for a landlord who owns the freehold, but individual licenses where they do not. The Council also offered a discount to landlords registered with certain accredited organisations, and a multiple property discount. In the first three months of designation, they also offered an ‘Early Bird Discount’ to those who applied within this initial period.
9.2 Upon review, the estimated cost of administrating the scheme’s renewal should be in the region of £420K over the 5-year period. This estimate is based on the number of licences to be issued in the Selective Licensing area (528 in the current scheme, plus an amount for the extension onto Valley Road and Esplanade Gardens) and the level of resources required to deliver renewal. In order to meet the scheme running costs, the Council will be looking at a cost in the region of £750 for a single-unit property with a single license, with an additional £150 per property for landlords with multiple-unit properties (so, if a landlord owns four flats in the block, then the total licence fee will be £1,200 - £750 for the first flat and £450 for the other three). Modelling has also had to account for a £100 discount for landlords who are renewing a license when the details are to remain unchanged (the same property with the same landlord). This is likely to be a large proportion of the renewal applications, which has a financial impact on fee income generated. Based on the above, the administration of the scheme is expected to be cost neutral for the Council.
9.3 To note - both the Scarborough North and Scarborough Central designations have been cost neutral in practice, with the license fees proving sufficient to cover the costs of the scheme, including the staffing required.
10.0 LEGAL IMPLICATIONS
10.1 The Housing Act 2004 and 2024’s associated guidance document ‘Selective Licensing in the Private Rented Sector: A guide for Local Authorities’ sets out the procedural steps that need to be followed prior to any potential designation.
10.2 Should approval be forthcoming, and officers are instructed to begin the process of renewing the Scarborough South scheme, there are certain markers we must achieve, including undertaking a full and comprehensive consultation and the issuing of a public notice of designation. The designation will come into force at least three months after the issue of that notice and unless revoked it will remain in force for a period of five years from that date.
10.3 Selective Licensing legislation in England changed in 2024, with councils no longer needing approval from the Secretary of State to introduce what were considered large schemes. However, new requirements instead include:
· Local housing authorities in mayoral strategic authority areas are requested to include their mayor in the consultation process on the proposed designation. They are expected to consider any representations made, whilst retaining the final decision-making process themselves.
· They must provide MHCLG with data on their selective licensing schemes upon the commencement and completion of the scheme.
· They must also publish on their website the outcome of any selective licensing review(s) undertaken pursuant to their legal duty under s.84(3) of the 2004 Act to review the operation of the schemes.
11.0 EQUALITIES IMPLICATIONS
11.1 The SL3 scheme is active in an area of poor property condition and high levels of deprivation - all factors that may disproportionately affect people with protected characteristics, such as ethnic minority households, disabled tenants, migrants, and low-income families. As the data shows, designation has had a positive impact on improve housing conditions and safety for tenants in the designation area. By trying to uplift and regenerate the area, NYC is complying with the Public Sector Equality Duty, trying to advance equality of opportunity. See Appendix D.
12.0 CLIMATE CHANGE IMPLICATIONS
12.1 North Yorkshire’s Climate Change Strategy recognises the link between fuel poverty, energy consumption and emissions, understanding that by improving the insulation of homes and making them more energy efficient, we can reduce the number of residents living in fuel poverty and thereby reduce carbon emissions. Licensing contributes to this process by imposing energy efficiency standards in the private rented sector within the schemes designation, helping to reduce overall energy consumption and carbon emissions in North Yorkshire. See Appendix E.
13.0 POLICY IMPLICATIONS
13.1 A Selective Licensing Policy was approved by North Yorkshire Council in January 2024 – specifically relating to the Scarborough South and Scarborough Town schemes (the only licensing schemes currently active throughout North Yorkshire). This policy will be reviewed as part of renewing the SL3 scheme to ensure it remains for purpose, and to reflect changes made to Government guidance in December 2024.
14.0 RISK MANAGEMENT IMPLICATIONS
14.1 Compliance risks – a renewed scheme must still satisfy the Housing Act 2004 conditions, which is why the evidence base has been updated. We have also included the required 10-week consultation period andcontinue to use selective licensing as one of many tools available to the council in trying to uplift and regenerate the Scarborough town area.
14.2 Operational risk – the private housing standards team are already under pressure, and a renewed scheme still requires sustained enforcement, inspections, and back-office support. Under resourcing can lead to non-delivery of scheme objectives, undermining the justification for renewal, meaning it is important that the right fee is charged to sustain the functioning of the scheme.
14.3 Reputational risk – renewals can face stronger resistance than first-time designations, especially if compliant landlords feel they are being penalised. It is therefore important that we communicate effectively with landlords and managing agents and are clear about the benefits renewal can bring. Officers explain that often, visible improvements are within the properties rather than externally visible, which can frustrate the community who feel there has been little change since designation began. As part of the consultation, we will aim to share several case studies to share what is happening ‘behind front doors’ and highlight the positive impact the scheme has been able to make.
15.0 HUMAN RESOURCES IMPLICATIONS
15.1 Renewing the scheme would not have any direct Human Resources implications. Existing staff in the Service would be able to remain in post and continue delivering the current service, with no anticipated changes to roles, terms and conditions, or the staffing structure. Because the licensing scheme is intended to cover administration costs, any further resource needs would be considered in line with the costings.
16.0 COMMUNITY SAFETY IMPLICATIONS
16.1 The renewal of SL3 scheme should impact positively on the sustainability of the local community within the designated area. The purpose of the scheme is to help uplift the area and reduce incidents of nuisance associated with poorly managed privately rented properties, including crime and anti-social behaviour.
17.0 CONCLUSIONS
17.1 The evaluation of the SL3 scheme demonstrates that designation has delivered clear and measurable benefits - it has enabled the Council to identify and address a substantial number of serious housing hazards, improve property conditions, and engage directly with landlords who may otherwise have remained outside regulatory reach. It also does not suggest that designation has negatively affected the local housing market, and concerns raised previously by landlords have not materialised in a way that outweighs the benefits to tenant safety and neighbourhood stability. While challenges remain, particularly around persistent levels of ASB and the fragility of progress, evidence indicates that these issues are best met through continued intervention rather than withdrawal of the framework that has supported improvement to date.
18.0 REASONS FOR RECOMMENDATIONS
18.1 Considering the above, there is robust justification for seeking renewal and extension of the Scarborough South Selective Licensing designation. Proceeding to public consultation will allow affected parties to contribute their views and will ensure that any future scheme reflects the needs of the community. The outcomes of this consultation will be essential in informing the Council’s final decision on the designated area.
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RECOMMENDATIONS
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i) For Members to approve, in principle, renewal and extension of the Scarborough South Selective Licensing designation, subject to a further report following conclusion of the consultation.
ii) For Members to approve the Public Consultation Plan for renewal of the Scarborough South Selective Licensing designation, developed as part of the Business Case for renewal. |
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APPENDICES:
Appendix A - Map of SL3 and list of streets
Appendix B - SL3 Evaluation
Appendix C - SL3 Business Case
Appendix D – Equalities Impact Assessment
Appendix E – Climate Change Impact Assessment
BACKGROUND DOCUMENTS:
Selective Licensing in the Private Rented Sector: A guide for Local Authorities
Selective licensing in the private rented sector: a guide for local authorities - GOV.UK
Nic Harne
Corporate Director – Community Development
County Hall
Northallerton
23/06/2026
Report Author – Hannah Lawty (Senior Housing Strategy Officer)
Presenter of Report – Lynn Williams (Head of Housing Renewals)
Note: Members are invited to contact the author in advance of the meeting with any detailed queries or questions.