Local authorities, which have previously used the scheme to tackle problem areas within their boroughs, are now looking to follow the example of the London borough of Newham which bucked the trend by obligating all its private sector landlords to apply for licenses.
But Robert Bryant-Pearson, chief executive of Allied Surveyors, said that the lack of a single policy throughout the country makes it difficult for valuers to identify when a license is required and therefore assess what impact this may have on the value of the property.
He said: “The onus is on the valuer to find out what regulations are in that council and it is not always easy to know that. My concern is that valuers who are valuing out of area could get it wrong.”
Richard Sexton, director of business development at e.surv, agreed that the risk of overlooking the need for a license is very real.
He said: “It could easily be missed unless the lender specifically requests this. It is more likely that the conveyancer will pick up the requirement when doing the searches.”
The consequences of overlooking the requirement for a license can have repercussions for all professionals involved in the chain.
Paula Hebberd, solicitor at Moore Blatch, said that any property professional should be “alive” to the potential that a claim could be brought against them if they fail to identify that a license is required.
She said: “Failing to consider whether the property requires a selective license will result in the property professionals looking to apportion blame against any party involved in the valuation and sale of the property.”
It is anticipated by property experts that borough wide schemes will become more common throughout 2013.
David Lawrenson, Lettingfocus.com blogger and property expert, said he expects more local authorities to “jump on the bandwagon” and try and set up their own schemes.
He said: “However it is thought that if these schemes do become more widespread lenders may be reluctant to lend because they don’t understand it.”
RBS does not lend on buy-to-let properties which are subject to licensing schemes which, in a statement to Mortgage Introducer, it said has been its current policy for some time.
It is feared that if more lenders take this view it could have an impact on property prices in the short-term.
Speaking about Newham Bryant-Pearson added: “Residential investment property values in this borough could dip in the short term if lenders prove inflexible in their lending policies.”
Sexton also agreed that in the short-term values of properties affected by this scheme could dip.
He said: “It is a bit of a chicken and egg situation. If the schemes become more widespread and lenders decide to shun them the worse-case scenario is that these properties will be awarded a cash-value which is inevitably lower than the open market value.”
However not all surveyors share the view that the schemes will pose challenges which surveyors are not already well equipped to deal with.
Paul Cutbill, professional development manager at Countrywide, said: “Yes this scheme causes a challenge but no more than school catchment areas or properties with poor or good transport links.
“These anomalies have always been present it is just a different aspect of it.”
He added that valuers with local knowledge will know which properties on their patch are subject to licensing schemes.
Sexton, Cutbill and Bryant-Pearson all thought the introduction of schemes would have a positive effect on the quality of housing stock in the private rented sector and lenders should recognise the positive impacts of the scheme.
Cutbill said: “Lenders taking the RBS view of deciding to steer clear will be taking a slightly superficial view. Lenders which understand the market they are working in a bit better, the specialist buy-to-let lenders, will recognise that better regulated properties in that sector represent a lower risk.”
