Merton Council in south London has taken long-term control of 18 rental properties after accusing their landlord of persistently failing to comply with its selective licensing scheme. The move, one of the first of its kind in the UK, will see the council redirect rent payments to fund property management while leaving the landlord liable for the mortgages.
Council invokes rare enforcement powers
The homes were originally placed under a one-year Interim Management Order in August 2024, following tenant complaints about repairs and management standards. After the landlord failed to respond to repeated licensing notices and inspections, the council escalated to a Final Management Order — giving it up to five years of control over the properties.
In its statement, the council said: “With still no reasonable prospect of the rental homes being licensed soon, the council has now made a Final Management Order. Merton Council will direct the tenants’ rental income into ensuring the management of the properties is to the standard we expect for tenants.”
While councils have had the legal ability to impose such orders under the Housing Act 2004, they are rarely used at this scale. The move signals a tougher stance on landlords who fall foul of licensing rules, raising concerns across the private rented sector.
Landlords question proportionality of action
The National Residential Landlords Association (NRLA) has repeatedly criticised licensing schemes as overly bureaucratic, warning that compliance costs and inconsistent enforcement risk driving responsible landlords out of the sector.
NRLA chief executive Ben Beadle has argued: “We all want safe housing, but blanket licensing schemes often punish compliant landlords while doing little to root out genuine rogues. Councils need to focus on targeted enforcement, not one-size-fits-all approaches that drain resources and create uncertainty for investors.”
Landlords also note that the seizure of rent income — while mortgage obligations remain with the owner—creates additional financial pressure. One south London landlord told us privately: “The principle of raising standards is fair, but if councils can simply step in and redirect income, it sets a worrying precedent. Good landlords could be caught out by admin mistakes or disputes over paperwork.”
Wider implications for private rental market
The council defended its actions as necessary to protect tenants. A spokesperson said: “This sends a clear message to rogue landlords: we will clamp down on those who are not meeting their legal obligations. Everyone deserves to live in decent housing, and we know there are many good landlords in Merton. But a handful are flouting responsibilities, particularly towards vulnerable tenants.”
The move comes as councils across England step up licensing enforcement, with many boroughs expanding selective and additional schemes. For landlords, it underlines the importance of staying compliant, but also raises questions about the fairness and proportionality of enforcement mechanisms.
Editor’s view
This case may be a turning point. While no landlord should ignore licensing rules or tenant repairs, the use of Final Management Orders at this scale could reshape the relationship between councils and landlords. If widely adopted, it risks adding another layer of uncertainty for investors already grappling with the Renters Rights Bill, tax changes and regulatory costs.
