Mandatory HMO licensing set to be extended

The Department for Communities and Local Government has now ended its consultation on HMO and residential licensing reforms, which ended yesterday.

This consultation encouraged buy-to-let landlords to air their opinions on the proposed alterations. It came before plans to make numerous changes though secondary legislation, in order to raise the number of properties in England subject to mandatory licensing.

HMO Proposals

Proposed alterations to HMO licensing include:

• Removal of the story rules, so all properties, regardless of floors, with five or more people from two or more households, are in scope. This will allow local authorities to combat poor living standards, migration and other issues seen in smaller properties.

• Extension of mandatory licensing to flats both above and below business premises, regardless of the number of storeys.

• Introduce a minimum room sixe of 6.52sqm in line with the Housing Act 1985 in order to close a loophole created which allows some landlords to let rooms too small for tenants to occupy.

Fines

Under the proposals, which could come into force early next year, a landlord that fails to obtain a licence will be liable to pay an unlimited fine.

Housing and planning Gavin Barwell, noted: ‘In order to build a country that truly works for everyone we must ensure that everyone has somewhere safe and secure to live. These measures will give councils the powers they need to tackle poor-quality rental homes in their area.’[1]

‘By driving out rogue landlords that flout the rules of business, we are raising standards and giving tenants the protection they need,’ he added.[1]

Licensing

It is forecasted that the proposals will bring a further 174,000 HMOs in line with mandatory licensing.

However, David Cox, managing director of the Association of Residential Letting Agents, has lambasted the amendments.

Cox noted: ‘Landlord licensing doesn’t work. Councils already have a wide variety of powers to prosecute for poor property conditions and bad management practices, with penalties ranging from fines to seizure of property and even imprisonment.’[1]

‘But councils don’t have the resources to undertake effective enforcement action. Imposing more burdens on councils will not mean improved standards and better conditions for tenants – it will merely mean more laws that are not being enforced.’[1]

Continuing, Cox said: ‘Further, we have to consider the unintended consequences of minimum room sizes. Some people are happy to take small rooms to keep their costs down. If these rooms are no longer available, where are people supposed to live?’[1]

‘What’s more, if a small room in a property can no longer be let out, the costs of that room will be spread across the other tenants living in the property; pushing up their rents. A habitable room is essential but a one-size-fits-all policy doesn’t always work,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/12/government-set-to-extend-mandatory-licensing-of-hmos-in-england