What do you know about the rules regarding houses in multiple occupation (HMOs) and the licensing systems in place across England? Whether you’re new to that part of the property sector or you want to keep update on the latest changes, you may be interested in an upcoming event in Manchester.
The Manchester City Council has planned a couple of HMO drop-in events for private landlords and letting agents, due to take place over the next few days.
One of the events will be held at Moss Side Powerhouse Library on Thursday 16th May between 3PM–7PM. The other will be held at Abraham Moss Library on Wednesday 22nd May between 2PM–7PM. These sessions have been planned in order to help HMO landlords and letting agents understand new rules and changes that have been introduced to HMO licensing.
It was 1st October last year that HMO rules were changed, so that properties let to five or more individuals from different families who are sharing amenities must have a licence. This is necessary for them to continue operating and to comply with legislation.
An estimated 160,000 let properties have been affected by the introduction of these new rules put in place to govern HMOs. The rules have also set a specification for room sizes in the properties. Bedrooms in HMOs are now required to be at least 4.64sqm for children aged ten or younger. For a single adult the bedroom must be a minimum of 6.51sqm, and for two adults sharing it must be 10.22sqm.
The minimum room size rule will not affect most landlords. Its main aim is to clamp down on rogue landlords who are overcrowding their properties, forcing tenants to live in unsuitable conditions. Housing too many people in one room or not providing a big enough space is a big issue in the private rental sector (PRS) and a breach of health and safety standards.
If you are unsure whether you require an HMO licence for your property, get in touch with your local authority for clarification.
Manchester City Council HMO drop-in events:
Thursday 16th May, 3PM–7PM, Moss Side Powerhouse Library, 140 Raby Street, Moss Side M14 4SL
Another rogue landlord has been fined for failure to license their house in multiple occupation (HMO).
Mohammed Saleh Ahmed, a London landlord in the borough of Tower Hamlets, has been issued a £4,000 fine, including costs of over £5,000, after failing to obtain the necessary licence for his HMO.
Landlords must license their let if it is occupied by at least three tenants from two or more separate households, sharing facilities, such as a bathroom and kitchen.
This form of licencing has been put in place as a way of bringing safer housing to the private rental sector (PRS). An effort is being made to improve HMOs in the UK, with the introduction of such schemes.
John Biggs, Mayor of Tower Hamlets, commented: “This case sends out a message to show that the council can and will enforce against landlords who fail to register their properties and that they face serious penalties for failing to do so. This prosecution action and the new scheme shows we are taking action to protect tenants and support standards for renters in the private rented sector.”
Councillor Sirajul Islam Deputy Mayor for Housing and Statutory Deputy Mayor, said:“The council cares about renters and will insist that landlords get the necessary licensing that protects both landlord and tenants. Housing is at such a premium in the borough that shared overcrowded flats used by multiple tenants are common. The scheme is essential in protecting health and safety for tenants and has real teeth.”
As this case shows, it can be expensive to get caught with an unlicensed HMO. It may be an extra cost for buy-to-let investors, but the licence does last five years. Specifically for a licence in Tower Hamlets, you would be looking at a fee of £520, which is one of the lowest in London.
This documenton the GOV.UK website provides full guidance for HMO landlords.
Just a few months later, we also had the extension of licensing for HMO properties. Previously, homes only required a licence if they were occupied by five or more individuals and the property was over at least three storeys. However, the property size clause was removed, meaning any HMO with five occupants needs a licence.
LendInvest welcomed both the EPC and HMO licence changes, for the simple reason that both will lead to the raising of standards within the rental market. There is no reason for tenants to have to get by in cold, non-energy efficient homes, nor should they be stuck in overly cramped, poor-quality HMOs. The private rental sector plays a key part in providing for national housing needs, and it can only properly fulfil this function by operating responsibly and professionally.
While it may have been difficult for some landlords to adjust to the ever-shifting requirements they face, the truth is that these sorts of changes will ensure that the properties available to tenants in the future are of a much higher quality, and encourage landlords to treat their rental properties in a more professional manner.
The impact so far
The EPC changes may have had a somewhat limited impact thus far, simply because they only apply to new tenancies. This is being extended to all tenancies from 2023, however, so the full impact is really still to come.
There is some evidence that increasing numbers of properties that you might class as doer-uppers are going onto the market because the owner is a landlord of a property that doesn’t meet the EPC requirements – opting to sell up rather than do up.
With the adjustments to the HMO requirements, we have already seen a host of fines levied by local authorities, with those penalties running into the tens of thousands in some cases.
As such, these legislation changes may not simply drive up standards among rental properties, but also push out some of those non-professional landlords for whom property was simply a lucrative sideline.
The EPC and HMO requirements will simply continue this trend, leading to a rental market dominated by professional landlords who see property as their sole business.
Local authorities need more help
There is no doubt that these legislative changes are aimed at increasing the professionalism of the rental sector, delivering a higher quality of property for tenants across the country, and that’s an attitude that LendInvest strongly supports.
But, if they are to deliver lasting change, legislation is not enough. Local authorities need to be provided with adequate resources to ensure they are able to properly monitor the HMO situation in their area and ensure that requirements are being met.
There are some doubts that this will happen, though. A month after the new rules were introduced, a landlord insurance provider submitted Freedom of Information requests to a host of local authorities in densely populated areas.
It found that as many as two-thirds of authorities had no idea how many unlicensed HMOs were operating in the area, while a third were unsure how many properties now fell within the scope of the legislation and so required a licence.
While the Government has promised a £2m fund for councils to use on enforcement work, there is a danger that this will be spread so thinly across England that it will really make very little difference to already stretched local authority teams.
Clearly more needs to be done. If we are to drive up standards in the rental market, then it’s not acceptable for HMO enforcement to be subject to effectively a postcode lottery.
Haringey Borough Council has approved plans for borough-wide additional HMO licensing, to take effect from 27th May 2019.
The plans will affect private landlords of Houses in Multiple Occupation (HMOs) that are occupied by three or four people forming two or more households.
Landlords with HMOs housing five or more people forming two or more households are already required to hold a mandatory HMO licence, following changes from 1st October 2018, which removed previous storey requirements.
The additional HMO licensing fee will cost £1,100 per property and will take a split fee approach, in line with recent case law. Landlords will face an upfront payment of £500, with the additional £600 being paid before the licence is issued. The council has confirmed that landlords who make an application before 27th May 2019 will be eligible for a discounted licence fee of £500.
The decision follows a 12-week consultation, which took place from 12th December 2017 to 5th March 2018. The council said that, by identifying landlords though issuing licences, it would be able to identify who was responsible for poor property management.
A summary of the 607 questionnaire responses from the consultation found that 77% of private tenants were in favour of additional HMO licensing, as were 45% of landlords and managing agents.
Despite a hike in rent prices or potential reduction in housing stock being the most cited reasons for not supporting the additional HMO licensing, and 51% of landlords confirming that licence fees were unreasonable, 63% of renters still felt that they were reasonable.
Councillor Emine Ibrahim notes: “This additional HMO licencing scheme will help ensure all HMOs in our borough are safe, well maintained and managed effectively. HMO landlords will now be required to licence their properties with the council, and those applying for the licence early will get a discounted fee.”
Landlords with HMOs in the borough are advised to apply for their licences by 26th May 2019, in order to qualify for the discounted fee of £500.
An Ilford landlord has been fined for converting a property to a House in Multiple Occupation (HMO), without the required permission.
An investigation into the property in Barking, owned by a landlord from Ilford, has revealed that the three-bedroom property, which he purchased in 2015, is being used as a HMO let, without the correct HMO documents.
After building work began on the property, despite landlord and homeowner Siddarth Mahajan not having planning permission, officers from Barking and Dagenham Council became suspicious.
Cllr Margaret Mullane, cabinet member for environment and community safety, said: “This dishonest landlord repeatedly refused to comply with the law and we pursued all the legal avenues that were available to us to ensure that he was brought to justice.
“We will continue to crack down on rogue landlords to improve standards and to ensure tenants have a decent home.”
Mahajan tried to claim that he was exempt from enforcement action, as he had proof that the property had already been a HMO for longer than ten years. The documents he presented appeared to show that its HMO status went as far back as 2008, but the council’s investigation team revealed it all to be a forgery.
At a later date, it was then discovered that Mahajan had also converted two more properties in the Barking area, also without planning permission. Again, the documents that claimed that the properties had already been in use as HMOs for many years, were in fact forgeries.
Overall, Mahajan has been found guilty on two counts of perverting the course of justice and three counts of using copies of forged documents. This has resulted in a sentence of 8 months imprisonment.
Further information on HMOs and the licensing required can be found in this guide by Just Landlords, the Landlord Insurance provider. If you are unsure about whether or not your let requires a HMO licence, you should check with your local council.
Landlords have been welcoming the new guidance for councils on the minimum room size regulations for rented homes.
The guidance on Houses in Multiple Occupation (HMOs) and residential property licensing reforms was published by the Ministry of Housing, Communities and Local Government. It states that a licence holder would be committing an offence if, without reasonable excuse, they breach the licence by:
knowingly permitting the HMO to be
occupied by more persons or households than is authorised by the licence;
failing to comply with a condition of
the licence such as a prohibition against occupation as sleeping accommodation.
Whilst the RLA believes that tenants should never face
overcrowded or substandard accommodation, it was concerned that the
changes could have seen councils required to take action against landlords
where a tenant gave birth and as a result there were two people in a room
sized for one.
If they sought to evict during this scenario, they’d be carrying
out unlawful discrimination, and the new guidance sets out guidelines to make
clear that this will not happen. For example, in section 3.6, the guidance
notes: “We would expect that in common with general prosecuting functions, a
local housing authority should only proceed with a prosecution if it is in the
public interest to do so.”
Plus, the guidance also notes, that: “A reasonable period for
compliance must be allowed in certain circumstances (see 3.7 and 3.8)”. The
maximum period for landlords to comply with regulations that councils can
specify is 18 months, however this can be shortened depending on the
Smith, Policy Director for the RLA, said: “We warmly welcome this new
guidance. It reflects considerable work between the RLA and the Government in
addressing serious concerns about the consequences of the room size changes.
“The Government has clearly listened to our concerns and this
document should provide much greater assurances to landlords and tenants