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Government extends mandatory licensing of HMO's

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Published: 03/01/2017   Last Updated: 03/01/2017  
Tags: HMO Licensing 2016

Government extends mandatory licensing of HMO's - announced December 2016

The government have ended a consultation on Houses In Multiple Occupation (HMO) reforms on the 12th December 2016.

The consultation came ahead of proposals to extend licensing laws to increase the volume of HMO's that will require mandatory licensing.

The results of the consultation, have confirmed the following will be passed through secondary legislation

- there will be a removal of the storey rule. Previously a HMO license was required if the property had 3 storeys or more (with 5 ore more unrelated sharers from 2 or more households). Going forwards, 2 storey semi detached properties, and flats will become licensable if let in this way to multiple non family occupants
- set a minimum room size of 6.52m squared in line with the existing overcrowding standard

Other intended consequences include:

- improved storage a and disposal facilities for this type of let
- there may be an application of the 'fit and proper person test' for HMO landlords (The Housing and Planning Act 2016)

In  order to obtain a license, landlords will be required to provide a number of costly measures that will need to be taken, mostly to improve fire safety conditions, which often include the following installations:

- fire doors
- emergency lighting
- interlinked smoke detectors
- hard wired wire alarm system
- fire blankets
- additional cooking facilities
- additional washing facilities
- additional refuse facilities

It is expected that the changes will apply from early 2018. Fines for non compliance are unlimited. The measures are designed to provide safe accommodation in higher risk homes, protect tenants, and to improve standards.

The changes come after a difficult year for landlords following a raft of legislative changes relating to tax.

David Cox, Managing Director of ARLA has hit back at the proposals, raising some stark realities of the changes.

He said: “Landlord licensing doesn’t work.
“Councils already have a wide variety of powers to prosecute for poor property conditions and bad management practices, with penalties ranging from fines to seizure of property and even imprisonment.
“But councils don’t have the resources to undertake effective enforcement action. Imposing more burdens on councils will not mean improved standards and better conditions for tenants – it will merely mean more laws that are not being enforced.
“Further, we have to consider the unintended consequences of minimum room sizes.
“Some people are happy to take small rooms to keep their costs down. If these rooms are no longer available, where are people supposed to live?
“What’s more, if a small room in a property can no longer be let out, the costs of that room will be spread across the other tenants living in the property; pushing up their rents.
“A habitable room is essential but a one-size-fits-all policy doesn’t always work.”
You can read the full consultation paper here.

Here at Dwell Leeds we specialise in managing HMO's in Leeds. HMO's offer the highest returns of any residential lets to landlords. Successful HMO landlords outsource the increased management and regulation requirements to us to create a fantastic passive income. If you would like to learn more get in touch today.