Posts with tag: HMO licensing

New HMO licensing rules could impact London’s biggest rental market

Published On: October 13, 2021 at 8:40 am

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Research by central London estate agency Bective has revealed how new HMO licensing rules will impact London’s biggest rental market, Westminster.

The new rules came into force in Westminster at the end of August 2021. They state that shared houses or flats where 3 or more people from 2 or more households share facilities now require licensing as HMOs (houses in multiple occupation). This is in replace of the rule that stated an HMO license wasn’t mandatory until 5 or more people were sharing facilities.

Bective’s research highlights that Westminster is the largest private rental market in London, where private rental stock accounts for 27% of all dwellings. In Westminster, this number rises to 42% of dwellings, followed by the City of London (41%) and Kensington & Chelsea (37%).

Top 10 boroughs ranked top to bottom for private rent as % of total stock

LocationPrivate rental % of total stock
Westminster42.1%
City of London41.1%
Kensington and Chelsea37.2%
Newham36.0%
Tower Hamlets34.5%
Hammersmith and Fulham33.0%
Haringey32.7%
Wandsworth32.4%
Camden31.8%
Brent31.0%
London26.80%
Source – ons.gov.uk

Westminster also has the 6th largest number of existing HMOs (9,539) of all London boroughs, trumped only by Ealing (20,429), Brent (16,984), Lambeth (12,000), Tower Hamlets (10,000), and Enfield (10,000).

Over the past three years, Westminster has seen the 8th largest increase in the number of HMOs, up 19% between 2017 and 2020, behind Hillingdon (668%), the City of London (614%), Lambeth (532%), Tower Hamlets (67%), Newham (58%), Waltham Forest (53%), and Harrow (36%).

Total number of HMO properties in London boroughs in 2017 and 2020, ranked from biggest 3-year increase to smallest

LocationEstimate of total number of HMOs 2016 to 2017Estimate of total number of
HMOs 2019 to 2020
3 year change
Hillingdon6515,000668%
City of London14100614%
Lambeth1,90012,000532%
Tower Hamlets6,00010,00067%
Newham6,0009,50058%
Waltham Forest3,9005,95153%
Harrow8801,20036%
Westminster8,0009,53919%
Greenwich6,5007,50015%
Hackney4,2694,71710%
Brent16,00016,9846%
Hounslow1,8001,8503%
Havering2652671%
Sutton1,2001,2000%
Ealing20,42920,4290%
Kingston upon Thames4,8004,8000%
Barnet5,9305,9300%
Croydon3,0003,0000%
Camden8,0008,0000%
Kensington & Chelsea4,4344,000-10%
Bromley2,3002,074-10%
Bexley1,4001,200-14%
Redbridge5,0004,000-20%
Enfield14,20010,000-30%
Barking & Dagenham300192-36%
Haringey12,0006,000-50%
Hammersmith & Fulham6,6333,000-55%
Lewisham14,8106,000-59%
Southwark13,0005,020-61%
Merton5,5682,040-63%
Richmond upon Thames51097-81%
Wandsworth15,000820-95%
IslingtonN/A400 
London overall194,693172,810-11%
Sources – Gov.uk LA Housing Data,Gov.uk LA Housing Statistics

Westminster also ranks 12th in terms of current HMO numbers as a percentage of all rental stock (18%), a list that is topped by Ealing (53%), Brent (46%), and Enfield (32%).

HMOs as a percentage of private rental stock in top 20 London boroughs, ranked from largest percentage to smallest

LocationEstimate of private
rentals (2019)
Estimate of total number of HMOs 2019 to 2020HMOs as % of private rental stock
Ealing38,90420,42952.5%
Brent37,28316,98445.6%
Enfield31,05110,00032.2%
Greenwich25,1917,50029.8%
Kingston upon Thames16,3704,80029.3%
Lambeth42,24512,00028.4%
Tower Hamlets41,88510,00023.9%
Camden33,6258,00023.8%
Hillingdon22,0295,00022.7%
Newham42,1249,50022.6%
Waltham Forest28,0595,95121.2%
Westminster52,7919,53918.1%
Lewisham33,2776,00018.0%
Haringey35,7816,00016.8%
Redbridge26,3364,00015.2%
Southwark35,0395,02014.3%
Barnet42,2355,93014.0%
Hackney34,1004,71713.8%
Kensington and Chelsea32,6704,00012.2%
Hammersmith and Fulham29,3993,00010.2%
London overall963,794172,81017.9%
Sources – Gov.uk LA Housing Data,ONS

However, with these changes now in force, Bective points out it is likely the number of HMOs within the borough will now spike.

Tom Dainty, Head of Lettings and Property Management at Bective, comments: “The impact of these new rules will be two-fold. Yes, it’s undeniable that additional HMO licensing and tighter scrutiny when dealing with rule-breakers will benefit tenants by raising the standard of living.

“But, at the same time, this increased scrutiny, along with the additional costs, might tempt landlords to up sticks from Westminster and find more profitable investments elsewhere.

“This exodus will be of detriment to tenants. Less landlords means less stock, and less stock means higher rent prices. With Westminster’s average rent already more than £2,600 a month, this could further price more tenants out of the borough.”

Thousands of Rented Homes Free to Operate Illegally, New Survey Reveals

Published On: October 9, 2018 at 9:28 am

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Tens of thousands of rented rooms and bedsits could continue to operate illegally for the next three years, in breach of new housing regulations introduced last week to crack down on rogue landlords, new research has revealed.

The Government has estimated that new rules governing dangerous and overcrowded properties, introduced on 1st October  will affect more than 100,000 private rental properties not currently licensed.

However, of 326 councils in England with responsibility for housing, only a handful have established the number of properties in their areas that currently meet new Houses in Multiple Occupation (HMO) regulations.

Several large metropolitan authorities including in London, Manchester, Leeds, Newcastle, Bristol and Norwich said they were unaware of how many properties in their areas were operating in breach of the regulations.

The National Association of Landlords (NLA) has been contacted by several members who tried to apply for licenses, but their local authority purported not to know anything about the changes or didn’t have a system in place to process their applications.

The regulations are intended to allow councils to crack down on landlords renting out substandard and overcrowded homes. Licensing requirements cover issues such as emergency lighting, soundproofing and fire proofing and they also set new minimum sizes for bedrooms.

They require properties with five or more occupants in two or more households to be licensed, including houses converted into bedsits where tenants share toilets and cooking facilities. Any such property that does not have an HMO license is operating illegally and the landlord could face a fine of up to £30,000.

A 2008 Government report estimated there were 56,000 HMOs licensed under the previous definition, those of three storeys or higher.

They 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 have given local authorities up to three years to identify them.

Research carried out by Doncaster-based Touchstone, a company that runs property investment courses across the UK, has revealed massive gaps in local authorities’ knowledge of where these properties are and who owns them. Most are relying on landlords to submit license 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 license.

Only 14 said they had conducted research to establish how many of those properties were in a condition where they could expect to be granted a license.

It is estimated the HMO changes will cost buy-to-let landlords £79m, according to research carried out by the Centre for Economics and Business Research.

 

New HMO regulations mean that more landlords could require a license for their properties

Touchstone CEO Paul Smith commented: “It’s clear the Government has passed legislation without any clear idea about the scale of the issue and we could be sleepwalking into a housing disaster,” said Smith.

“We’re aware of one local authority with 1800 properties classed as HMOs and privately it told us that only around 40% will meet the new regulations. If that’s happening across the country, we could be looking at a major problem.”

Smith said many landlords, faced with paying an average of £1,027 for HMO licenses as well as the cost of upgrading, may simply sell-up, exacerbating an already chronic shortage of homes in some areas.

The buy-to-let market is already slowing down following the recent introduction of a 3% residential property levy on landlords, the ending of mortgage interest tax relief and new stress tests for home loans.

“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,” he said.

“Clearly properties cannot continue to operate illegally and so the human cost of this is potentially thousands of people being made homeless.”

Of the councils that responded to the FoI request by Touchstone, only 14 had carried out research to establish how many properties in their area were likely to be affected by the changes as well as into how many were likely to be granted a license.

Manchester City Council estimated it had 5000 properties in its area now classed as HMOs, but it hadn’t researched how many were in a condition to meet the new regulations.

North Somerset Council said it had 2940 properties affected, Peterborough and Bournemouth put the number at up to 2500 while Cambridge, York and Hull city councils estimated they had more than 1000 HMOs. None was able to say how many were currently operating illegally.

Leeds, Bristol and Norwich were among the majority of authorities who 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 NLA, remarked: “This is an unacceptable failing on the part of the Ministry of Housing, Communities and Local Government, which should have ensured all local authorities were up to speed with the changes. It’s disappointing that more consideration hasn’t been made for the significance of this change and the challenges local authorities face in implementing it.

“HMO licensing was originally introduced to address fire safety in properties with three or more floors. Smaller HMOs don’t have the same issues, so it’s difficult to see what the Government aims to achieve with this blanket approach.

“Some landlords will have to reduce the number of rooms they let as smaller rooms may not meet the new minimum room sizes. They also must cover the increased costs and so are likely to pass these on to tenants. This alone won’t see landlords leave the market, but when combined with the other regulatory changes, the costs are affecting the viability of running lettings businesses.”

He added: “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.”

Landlord Ordered to Repay £39,000 in Housing Benefit

Published On: January 6, 2017 at 11:12 am

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Landlord Ordered to Repay £39,000 in Housing Benefit

Landlord Ordered to Repay £39,000 in Housing Benefit

A buy-to-let landlord who failed to obtain a license for a House in Multiple Occupation (HMO) in London has been ordered to repay £39,000 in housing benefit, following action taken by Islington Council.

The council ordered Landhouse Ltd, which rented out the HMO, to repay the money it had paid in housing benefit, after the firm admitted to letting the property without the correct HMO license.

Islington Council’s environmental health officers had conducted an inspection of the property, finding it to be overcrowded and badly managed. In addition, fire hazards were uncovered throughout the property.

In a hearing at the Property Chamber – the First-tier Tribunal for London Residential Property – the landlord was ordered to pay £14,140 in fines and costs, as well as repay the council £39,022.52 in the housing benefit claimed during the period when the property was rented without a license.

Landhouse Ltd has now applied for a license, but is still liable to repay the benefit, which will be returned to a central Government housing benefit consolidation fund.

Councillor Diarmaid Ward, Islington Council’s Executive Member for Housing and Development, comments on the case: “More and more people rent privately in Islington, and we’re committed to helping make sure they have decent homes to live in. We will take action when landlords do not keep within the law, and, as this case shows, the costs can be very significant.”

If you rent out a HMO, be aware that you are required to obtain a license from the local council. The Government has made it incredibly easy for landlords to gain a license for their property – simply enter the postcode of the property you require a license for at: https://www.gov.uk/house-in-multiple-occupation-licence

To avoid facing hefty fines and even imprisonment, remember to stick to the law governing the private rental sector. Signing up for free access to our handy guides will ensure that you have all the information you need: /guides/

HMO Landlord Ordered to Pay £29,000 for Failing to License

Published On: January 19, 2016 at 12:42 pm

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A landlord in Leicester has been ordered to pay around £29,000 in fines and court costs after renting out a House in Multiple Occupation (HMO) without a license.

HMO Landlord Ordered to Pay £29,000 for Failing to License

HMO Landlord Ordered to Pay £29,000 for Failing to License

Samsud Wadi, of Evington, appeared before Leicester Crown Court on Thursday 14th January for a series of offences relating to the management of the property that he owned and failed to license.

The court was told that Wadi’s HMO, at 14 Humberstone Drive, contained eight bedsits over three storeys with some shared facilities, meaning that it should have been licensed as a HMO.

Wadi, 40, was informed that he required a HMO license in April 2015, but he did not act upon the advice.

On 10th December, he pleaded guilty to the offences before Leicester Magistrates’ Court. However, the case was referred to the crown court, as it has greater sentencing powers.

Leicester Crown Court fined Wadi £12,000 for operating an unlicensed HMO and fined him a total of £13,000 for breaching five HMO management regulations. Additionally, he was ordered to pay £3,700 in prosecution costs.

The Assistant City Mayor for Neighbourhood Services at Leicester City Council, Councillor Kirk Master, comments: “Licensing regulations for HMOs are there to protect the rights of tenants, and landlords have an obligation to ensure their properties are correctly licensed.

“In this instance, that was not done, despite the landlord being advised that he needed to do so, leaving us with no option but to take legal action against him.”1 

If you own a property that is rented to five or more people that form more than one household, is at least three storeys high and contains shared facilities (such as a bathroom or kitchen), then you must apply for a HMO license.

Don’t be caught out! Check LandlordNews.co.uk for all the landlord law you need to know.

1 https://www.leicester.gov.uk/news/news-story-details?nId=88535

 

 

 

 

Landlord Fined £70,000 for Breaching HMO Regulations

Published On: November 22, 2015 at 12:43 pm

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A landlord in west London has been fined over £70,000 for breaching House in Multiple Occupation (HMO) regulations.

Landlord Fined £70,000 for Breaching HMO Regulations

Landlord Fined £70,000 for Breaching HMO Regulations

Ealing London Borough Council brought the case against Balwinder Singh Kahlon. He was charged for 18 offences of failing to comply with the Management of Houses in Multiple Occupation (England) Regulations 2006 (Section 234(3) and (5) of the Housing Act 2004 and one offence breaching Section 72(2) of the Housing Act 2004. He pleaded guilty to all of the offences.

The 19 fines totalled £69,100 and Kahlon was also ordered to pay council costs of 33,180.43 and a victim surcharge of £120, making the total £72,400.43.

The breaches regard the management of a property on East Avenue, Southall. They were uncovered after an unannounced inspection of the home in January by regulatory services officers.

The licensed HMO for ten people in seven households was found to have numerous serious management breaches, including a blocked escape route, dirty and unmaintained bathrooms and kitchens, unclean communal areas and poor maintenance of the emergency lighting.

A warrant was granted to enter the property. When officers arrived in February, they found 20 people living there, including two babies, making up ten households. Some individuals were living in windowless rooms, unsuitable for residential occupation.

Kahlon had ignored the terms and conditions of his HMO license by overcrowding the property with double the number of tenants he was allowed to house. The council brought the prosecution against him for offences relating to his failure to comply with management regulations of the HMO and one for allowing more occupants or households to live in the property than permitted by the license.

Councillor Jasbir Anand, Cabinet Member for Housing at Ealing Council, says: “We make every effort to ensure residents in the borough have decent living standards and are well protected from greedy slum landlords. Mr. Kahlon showed scant regard for his license conditions and endangered the lives of his tenants in order to make as much money as he could. I have nothing but contempt for his actions and welcome this substantial fine that has been imposed on him, which I hope will be a considerable deterrent to other unscrupulous individuals.”1

The court has enforced a collection order for the fine, demanding Kahlon to pay £25,000 by 27th November and the remaining balance within three months, by 26th February 2016.

1 https://www.landlordtoday.co.uk/breaking-news/2015/11/southall-landlord-fined-70k-for-hmo-regulation-breaches

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mandatory HMO Licensing to be Extended

Published On: November 9, 2015 at 4:10 pm

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The compulsory House in Multiple Occupation (HMO) licensing scheme is set to be extended to include two-storey homes and bungalows. It will also enforce a minimum bedroom size rule.

The new regime means that from next year, all HMOs in England with five or more occupants would be included in the mandatory licensing scheme.

Mandatory HMO Licensing to be Extended

Mandatory HMO Licensing to be Extended

The crackdown on single-storey properties is set to combat beds in sheds. The minimum bedroom size would be 6.5 square metres.

The proposal also suggests that some blocks of flats should be classed as HMOs if they have been converted to a poor standard.

At present, the obligatory scheme applies to shared rental properties of three or more storeys, occupied by five or more renters that do not form a single household.

A new consultation on the matter has opened, which proposes an extension to the mandatory scheme throughout England. It would still stick to the five or more tenants and at least two households rules.

The technical discussion document relates to comments made by the Prime Minister in May, when he announced a new mandatory licensing scheme.

The paper, released by the Department for Communities and Local Government, claims that some landlords are not just failing to operate their HMOs properly, but are exploiting renters, “and often the public purse through housing benefit, by renting substandard, overcrowded and dangerous accommodation to vulnerable tenants”.

It notes that not all local authorities have introduced their own additional licensing schemes.

It states: “Many landlords and agents do an excellent job in managing their HMOs to high professional standards, but that is far from universal.”

It adds that it has become “an increasing priority to ensure smaller HMOs are adequately protected and properly managed”.

Currently, landlords are exempt from selective licensing schemes if they let to family members. However, the Government plans to remove this exemption, as it believes it has been abused.

The document says that local authorities have spent time and money trying to establish the identities of various tenants.

The consultation closes on 18th December 2015, with the changes set to be introduced next year.

Meanwhile, local authorities are planning to introduce their own additional licensing schemes, including those that encompass large areas or even the whole city or borough, covering all rental properties.

The latest scheme is in the London Borough of Hammersmith & Fulham, which plans to introduce licensing to all private rental homes in one fifth of the borough.

In Blackpool, the first five prosecutions have been brought against landlords that have failed to apply for licenses.

The new consultation document can be found here: https://www.gov.uk/government/consultations/extending-mandatory-licensing-of-houses-in-multiple-occupation-and-related-reforms