New HMO rules expected in October amid warning that complexity of licensing is driving landlords out

The Government is planning to introduce an extension to rules on Houses in Multiple Occupation (HMOs) in October, according to Housing Minister Dominic Raab.

The Government set out its proposals last year, which involve mandatory licensing for properties — regardless of height — that are occupied by five or more people from two or more households.

Currently, HMOs that must be mandatorily licensed are of three or more storeys.

The new rules still have to be approved by Parliament, but in response to a question in Parliament by Liberal Democrat MP Wera Hobhouse, Raab set out a timetable for their introduction.

He said: “The Government proposes to extend the scope of mandatory houses in multiple occupation (HMO) licensing, so that a licence is required for HMOs with five or more occupiers.

“We published our response to our HMO reforms consultation in December 2017, and we plan to lay the necessary regulations before Parliament shortly with a view to bringing them into force (subject to approval) in October 2018.”

New rules will also come into force setting minimum size requirements for bedrooms in HMOs. As part of the licensing requirements, local councils will be able to make sure that only rooms meeting the standard are used for sleeping.

Rooms used for sleeping by one adult will have to be no smaller than 6.51 sqm and those slept in by two adults will have to be no smaller than 10.22 sqm. Rooms slept in by children of ten years and younger will have to be no smaller than 4.64 sqm.

Meanwhile, the National Approved Letting Scheme (NALS) has warned that more and more landlords will leave the private rented sector (PRS) as they struggle with rising costs and the complexity of licensing schemes.

NALS yesterday revealed findings that licensing fees can be vastly different depending on locations, with London boroughs charging significantly different fees.

It said that following the Government’s decision to widen the mandatory HMO licensing scheme to another 160,000 properties across England, the issue of fees was even more important because increasing costs could also drive rents up across the country.

NALS research, conducted by London Property Licensing, shows that in 2017, licensing fees for a three-storey HHMO with five unrelated occupants can range from £125 (City of London Corporation) to £2,500 (Lewisham Council).

It found that in 23 of London’s 33 boroughs licensing fees are over £1,000 for a similar sized property. Overall, average fees have climbed every year since 2014 and the average cost has risen by 12.9% in 2016/17 and a further 5% this year (standing at £1,119).

There are now 29 separate additional and selective licensing schemes in operation across London with more schemes on the way, which means that landlords can potentially face licensing their properties through different schemes in different parts of the city, NALS said.

Isobel Thomson, NALS chief executive, said: “We should be clear: licensing HMOs helps protect tenants and drives up standards in the PRS.

“At the same time, the maze of licensing schemes operating in the capital is a huge financial and administrative burden on landlords, with some councils seeing them as a new revenue stream.

“With landlords under pressure from a host of regulatory changes, this increased burden is likely to push them out of PRS exactly at a time when they have a key role to play in providing much-needed housing.”

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One Comment

  1. Will

    More about money making than anything else!

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