A London borough has just confirmed it is paying a private company more than £14.7 million across two separate contracts to help introduce a new landlord licensing regime, a disclosure that raises fresh questions about how councils fund and staff the enforcement of private rented sector standards. The story broke in south London, but the pattern behind it, of local authorities reaching for outside contractors to process licences and carry out inspections, is already visible in Kent, and landlords here would be wise to take note.
A six-figure contract, then some
From Friday this week, Croydon Council is introducing selective licensing in 14 wards, whilst additional HMO licensing will apply across the borough to houses in multiple occupation with three or four people from two or more households, with larger HMOs with five or more people already covered by mandatory HMO licensing. The council says the intention is straightforward: the schemes will set clear standards for landlords and give the council a better understanding of privately rented homes across Croydon, helping to identify where improvements are needed.
What makes this rollout unusual is who is doing the legwork. The council has appointed a private firm, The Oyster Partnership, to help facilitate the regime, with the firm handling applications, checking documents, answering questions and carrying out inspections where required. The price tag is substantial: there are two contracts with Oyster, the first costing the council £6,301,350 including VAT, and the second costing £8,483,904 including VAT. That is over £14.7 million in public money routed to a recruitment and property consultancy whose own website describes its work as partnering with "Developers, Investors, REITs, Consultancies and the Public Sector to deliver the best people to fulfil your ambitions".
Croydon insists it hasn't handed over the keys entirely. The council maintains it will remain responsible for the schemes and will make the final decisions on licences, and it will be responsible for enforcement. Executive Mayor Jason Perry framed the arrangement as landlord-friendly, saying the new schemes "will help us raise standards for residents, whilst giving landlords clear information about what is expected of them and support through the application process". An Oyster spokesperson added that "our role is to make the application process clear and straightforward".
A borough with previous form
Croydon isn't new to this. A licensing scheme ran there previously, and critics have questioned its record. Analysis cited by local commentators noted the previous scheme banked substantial fee income, with the council banking £6million in fees from landlords despite conducting few effective enforcement inspections, completing 3,473 inspections of private housing in 2016-2017, and bringing just a single prosecution in 2017. A follow-up bid to widen the scheme also stumbled: the previous Council applied for a licensing scheme in 2020, which was not approved by the Secretary of State. The 2026 version has also drawn criticism over which wards were chosen, with objectors arguing the selection created a postcode lottery across the borough. The scale of the private rented sector there explains the council's appetite for more oversight: nationally the private rented sector makes up 19% of the total housing stock in England, but 31.2% of Croydon's housing stock is privately rented.
The pattern is already in Kent
None of this is confined to south London. Medway Council has been running its own parallel process, and it has reached for outside help too. Cabinet papers show Medway sought approval to formally commence consultation for an Additional Licensing Scheme in Chatham Central & Brompton, Fort Pitt, Gillingham North, Gillingham South, Luton and Watling, and a Selective Licensing Scheme in those wards plus Strood North & Frindsbury. To run that consultation, the authority appointed Transform UK, an independent business management company, to support the consultation, echoing Croydon's decision to bring in outside capacity rather than manage everything in-house.
The evidence base Medway compiled paints a picture of a rental stock under strain. Research cited in coverage of the proposals found that 22% of shared-amenity HMOs in Medway contain at least one serious hazard, including issues such as mould, electrical faults, and fire safety concerns, while over a five-year period the council received 339 complaints related to HMOs and 101 reports of anti-social behaviour, against an estimated 1,018 HMOs in the Medway Towns, with 658 located within the affected wards. Following its cabinet meeting, reports indicate the scheme has been approved, with implementation no less than three months after the decision date. For landlords with property in Chatham, Gillingham, Strood or the surrounding wards, the direction of travel now looks settled rather than hypothetical.
Why this matters beyond Medway
The wider trigger for all this activity sits in Whitehall, not the town hall. A regulatory change at the end of 2024 removed the central cap on how much of a borough could be brought under selective licensing, and a single deregulation in December 2024, the Selective Licensing General Approval 2024, removed the central-government approval that had capped how much of an area a council could license, and councils have moved quickly to designate new schemes. Kent authorities beyond Medway are watching this space closely, and the appetite for expansion shows no sign of slowing.
The financial stakes for landlords who get it wrong have also risen. Under current rules, operating an unlicensed property that requires one can lead to civil penalties of up to £40,000 per offence, increased from £30,000 on 1 May 2026 under the Renters' Rights Act 2025, or prosecution, and Rent Repayment Orders of up to 24 months' rent. Letting agents aren't shielded either: letting agents can be fined in their own right for properties they manage, and councils increasingly use data matching between council tax and tenancy data to identify unlicensed properties.
What Kent landlords should take from this
The lesson for Kent isn't that private contractors are inherently a problem. Processing thousands of licence applications is genuinely resource-intensive, and councils have limited in-house capacity to do it quickly. But the scale of the money changing hands in Croydon, and the questionable enforcement record of its previous scheme, should temper any assumption that a bigger contract automatically means better outcomes for tenants or a smoother process for landlords. Medway's own use of an outside consultancy for its consultation suggests this is becoming standard practice rather than a one-off.
For landlords with property in or near Medway's designated wards, the sensible move now is to start gathering the paperwork, gas certificates, EPCs, management arrangements, before any application window opens, rather than scrambling once a scheme goes live. Whether outsourcing the administrative side of licensing genuinely improves standards for tenants, or simply shifts cost and complexity around without adding capacity where it matters most, is the question councils across Kent will eventually have to answer for themselves.