Agents and landlords ‘could be in trouble’ as most councils fail to understand new HMO rules

A series of Freedom of Information requests has found that only a minority of local authorities have established the number of properties that need to be licensed under new HMO rules.

Even fewer councils – only a tiny handful – know whether the properties would meet licensing conditions, for example, as to fire safety and new minimum room size requirements.

As a result, thousands of HMOs could be illegal, exposing landlords and agents to fines and other penalties, and inability to serve Section 21 notices.

Tenants meanwhile could face losing their homes.

From October 1, the old HMO rules changed, and now apply to properties of any height where there are five or more sharers in two or more households.

Previously, only properties of three storeys or more were covered.

A 2008 Government report estimated there were 56,000 HMOs licensed under the old regime.

These will automatically be passported over to the new arrangements, but the Government estimates a total of 160,000 properties could be covered by the new regulations and has given local authorities up to three years to identify them.

Research carried out by Doncaster-based property investment firm Touchstone suggests that many councils will need all of this time, while meanwhile a large number of HMOs are illegal.

The research has apparently revealed massive gaps in local authorities’ knowledge of where these properties are and who owns them.

Most, it is claimed, are relying on landlords to submit licence applications.

Of the 238 authorities that responded to a Freedom of Information request, sent at the start of September, asking how prepared they were for the changes, 93 said they had carried out research to establish how many properties in their area require an HMO licence.

However, only 14 had conducted research to establish how many of those properties were in a condition where they could expect to be granted an HMO licence.

Touchstone CEO Paul Smith said that the Government had passed legislation without any clear idea as to the sale of the issue.

He said: “We’re aware of one local authority with 1,800 properties classed as HMOs and privately it told us that only around 40% will meet the [HMO standards required in] the new regulations.

“If that’s happening across the country, we could be looking at a major problem.
“Ministers have estimated 160,000 properties could be affected but I would be interested to know how they arrived at that figure as most local authorities have not conducted any research.”

Responses to the Freedom of Information requests showed that while Manchester City Council estimated it now has 5,000 HMO properties, it hasn’t researched how many will meet licensing standards.

North Somerset Council said it had 2,940 properties affected, Peterborough and Bournemouth put their numbers at up to 2,500 while Cambridge, York and Hull city councils estimated they had more than 1,000 HMOs.

None was able to say how many were currently operating illegally.

Leeds, Bristol, and Norwich were among the majority of authorities which said they had not carried out any research to establish how many properties in their area might be affected or how many might pass or fail.

Richard Lambert, CEO of the National Landlords Association, had already said that landlords enquiring about licences were being given wrong answers by local councils which appeared to know nothing of the changes.

He now says: “This is an unacceptable failing on the part of the Ministry of Housing, Communities and Local Government.

“We‘re also concerned that local authorities appear unprepared for the changes and have, anecdotally, heard that landlords may be being given advice which could put them at risk of breaking the law.

“Our advice to all landlords is to check if your property falls under the new regulations, and if your local authority does not yet have a process in place, make sure you apply using the existing mandatory HMO licensing scheme and receive an acknowledgement of your application.”

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10 Comments

  1. Deltic2130

    Ludicrously, one HMO of professionals I own has seen one room fall slightly short of room size restrictions, meaning a doctor from the nearby hospital has had to be evicted after 3 years, despite the fact he loves the room which is extremely convenient for his shift work (he also has a permanent home elsewhere). A second room is under discussion but it looks like the second doctor will also have to go, so two rooms stand empty when local professionals want them. If the house then ceases to be a viable investment, the whole lot will have to go! My local authority recognises the stupidity of this but says it can do nothing about it.

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    1. Richard Tacagni

      Under the new rules, your local council can allow up to 18 months for the tenant to be evicted or the room made larger.

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  2. Property Money Tree

    When I read the new legislation, I thought HMOs now cover any situation where there are more than 2 people (3 or more) from more than 1 household (2 or more).  It used to be 5 or more before 1/10.  But then I might be wrong…

     

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    1. qweasdzxc

      The definition of an HMO is broadly as you have given it (resident landlords complicate things). The Housing Act 2004 created this definition and since this came into force, ALL HMOs have had to comply with various standards. Previously an HMO with 5+ people and 3+ stories had to be licenced. From 1st October the number of stories requirement has been removed so any HMO with 5+ people now has to be licenced.

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  3. Headache

    I have a situation which is live at the moment. Three people living in a property who are unrelated. The Fire Brigade visit and tell me that it’s a HMO and one of the tenants must leave. The tenants then went to the council who told them it was not a HMO. I checked out the government website and there answer is very clearly yes it does constitute a HMO.
    So here is my question: Does two sisters and a friend living in a house together constitute a HMO regardless of size or storeys to the property?Yes or No.

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    1. Property Money Tree

      …Headache, unfortunately, yes.  You have more than 2 people from more than 1 household sharing facilities.  I did a 3 min video on the topic “What is a HMO?” in Sept, as I suspected there’d be a lot of confusion, and I was hoping to assist.  You can watch it at https://youtu.be/VMY_Rk0b6Mg

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      1. Property Money Tree

        …on YouTube.  There are others on there too, but if you want to watch mine, you’d have to add “Property Money Tree” in with “What’s a HMO?” To get to mine – I’m a YT nobody haha

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      2. Headache

        Hi many thanks for the YouTube clears up everything

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    2. jeremy1960

      Yes Headache, it is an HMO, doesn’t fall under mandatory licensing but you need to check whether your council operates additional licensing scheme.

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  4. Richard Tacagni

    I was surprised to read the suggestion councils have three years to identify licensable but unlicensed HMOs. I would be interested to know the source of this information as I don’t believe this is the case.

    Landlords and agents must apply now if they let out properties that require licensing, or risk facing enforcement action.

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