New HMO Licensing Rules Expected in Spring 2018

New House in Multiple Occupation (HMO) licensing rules are expected to be introduced in spring 2018. The laws could require landlords to carry out restructuring work on their properties or face heavy fines.

New HMO Licensing Rules Expected in Spring 2018

Landlords who own HMOs will require new licences under the rules. 60,000 HMOs across the UK already require a licence, but it is estimated that a further 174,000 properties will be subject to mandatory licensing changes aimed at improving housing conditions.

The new licensing rules will impose minimum standards on room sizes, storage facilities and waste disposal for all HMOs, including conversions and properties of multiple use.

The legislation will also scrap the requirement that all HMOs have at least three storeys in order to fall within the scope of the licensing.

Under the plans, local councils will also be granted additional powers to adjust the benchmarks and licensing fees if they see fit. However, some property owners believe that regions outside London won’t be affected, because the new standards are already being met. This raises concerns that more needs to be done by the Government to dispel this myth and inform all HMO landlords of the impending changes.

If you fail to comply with the new licensing rules, you could find yourself with rooms that you can no longer let, undersized living areas and a serious gap in your rental income.

The new regulations are likely to pile pressure on landlords, who already face a number of new financial headwinds, such as the higher rate of Stamp Duty and cuts to mortgage interest tax relief.

The legislation was initially due to be introduced in spring this year, but was delayed due to the snap General Election. This is good news for landlords, however, as it allows a grace period to catch up with the new licensing rules, which are expected to be brought in in April 2018.

The following are the main changes under the Government’s new licensing rules for HMOs to be aware of:

• Removal of the three-storey rule
• Incorporate flats that are situated above or below commercial premises
• A new minimum size requirement of 6.52m², which is in line with the current standard for overcrowding. This size is likely to be 10m² for HMOs in which all tenants have their own bathrooms, but share other facilities, such as a kitchen

Other proposals include:

• A fit and proper person test for landlords looking to obtain a licence
• A requirement for landlords to provide sufficient storage facilities to deal with the holding and disposal of all household waste

Are you prepared for the changes?