HMO Regulations Archives

Marketing March 27, 2019 No Comments

Introduction of new licensing scheme for Houses in Multiple Occupation

A new licensing scheme aimed at improving conditions for occupiers and addressing issues that can affect neighbourhoods will be introduced for Houses in Multiple Occupation (HMO’s) from 1 April 2019.

It will require landlords to meet important quality and safety standards before an HMO is let.

This regulatory regime will also be linked to planning, ensuring that the concentration of HMOs is managed.

Belfast City Council will manage the licensing scheme on behalf of all local authorities in Northern Ireland. More information is available on their website at www.belfastcity.gov.uk/nihmo.

Belfast City Council will also launch an advertising campaign to include online, radio and newspapers, to ensure landlords and tenants are aware of the change in responsibilities. It is intended that all local councils will share this messaging and information widely.

The licensing scheme will be managed by the NI HMO Unit based in Belfast City Council; they will process applications and enforce the regulations across NI, ensuring the terms and conditions of the licences are complied with by landlords.

The decision on whether to award a licence will be the responsibility of the local council in which the HMO is located.

The new system will work more effectively because HMO regulation will be linked to other critical functions, such as planning, building control and environmental health, all of which are under the responsibility of district councils.

David Polley from the Department for Communities said, “From 1 April 2019 Councils will be responsible for HMO regulation carrying out checks and inspections to ensure that the property is suitable for the specified maximum number of persons intending to occupy it.

“This is about improving the quality of this type of private rented accommodation and is something which should be welcomed by landlords, those living in HMOs and those living around them.

“Well managed multi-occupancy houses are an important part of the housing market in Northern Ireland. New licensing arrangements will mean councils will be expected to work with landlords and owners of HMOs to ensure flats and houses are safe and well maintained,” he added.

Source: Newry Times

Marketing March 21, 2019 No Comments

Landlords warned of £30k licensing fines

Landlords who run houses of multiple occupation without a licence could now be fined up to £30,000.

Marketing March 15, 2019 No Comments

Haringey Council additional HMO licensing

Between 11 December 2017 and 5 March 2018 Haringey consulted on a borough wide Additional Licensing Scheme for Houses in Multiple Occupation (HMO). As with most other new schemes Landlords will be required to have a licence if they rent to three or more people from two or more households starting 27th May 2019.

The the Council say the schemes “have been designed to improve the condition of private rented homes, reduce anti-social behaviour and support landlords by providing guidance and support.”

The proposal is to introduce:

A borough wide Additional Licensing Scheme for Houses in Multiple Occupation (HMO) and a Selective Licensing Scheme applying to all private rented properties in 29 defined areas across the borough

“We’re committed to providing residents who wish to rent in Haringey with good quality, safe accommodation which is managed by responsible landlords or letting agents. This means working with landlords to create a more professional rented sector, and tackling those who mistreat or fail to provide a good, safe home to their tenants.

“To help achieve this, we have introduced licensing for all Houses in Multiple Occupation (HMO) so that more landlords will have to hold a license before they can let out their homes. These licenses require landlords to keep their homes in good condition and ensure high standards of management, or risk enforcement from the council.

“On 12 February 2019 Haringey Council designated the whole borough subject to additional HMO Licensing. The scheme becomes operative on 27 May 2019 – anyone found to be operating an unlicensed HMO after this date will be committing an offence and will face enforcement action.”

For the Haringey licencing page click here

“How can I apply

We are currently working on introducing an online licence application and payment system. This is currently not available, so applicants will need to complete a paper application form until further notice.

All the information you need to apply for an Additional HMO Licence can be found on the Apply for a HMO licence page.

What is the cost of Licensing

The Licensing Fees have been amended and will now be taken in two stages.

A £500 fee will be paid on application a further £600 fee will be taken before your licence is issued
The total fee for licensing an HMO is £1,100

Further charges and discounts may apply to your application. See the Information on HMO licence fees and licence periods (PDF, 54KB) for further information.

Apply early and receive a discounted early bird licence fee

A financial incentive is available for compliant landlords – apply for an Additional HMO Licence before 27 May 2019 and pay a discounted Licence fee payment of £500.”

Source: Property118

Marketing December 26, 2018 No Comments

Government announce new room size guidance

Houses in Multiple Occupation and residential property licensing reform Guidance for Local Housing Authorities Click here

“3. 4 What is the minimum sleeping room size?

The minimum sleeping room floor area sizes (subject to the measurement restrictions detailed in the paragraphs below) to be imposed as conditions of Part 2 licences are:
• 6.51m square for one person over 10 years of age
• 10.22m square for two persons over 10 years

The minimum size for sleeping accommodation does not apply to charities providing night shelters or temporary accommodation for people suffering or recovering from drug or alcohol abuse or mental disorders.

The Mandatory Conditions Regulations 2018 amend Schedule 4 of the Act, introducing the following new conditions:
•Mandatory national minimum sleeping room sizes (See paras 3.3 – 3.10); and
• Waste disposal provision requirements (See paras 3.11). 15
• 4.64m square for one child under the age of 10 years

It will also be a mandatory condition that any room of less than 4.64m square may not be used as sleeping accommodation and the landlord will need to notify the local housing authority of any room in the HMO with a floor area of less than 4.64m square. The measurement is one of wall to wall floor area where the ceiling height is greater than 1.5m. No part of a room should be included in the measurement where the ceiling height is less than 1.5m.”

RLA: Landlords are today welcoming new guidance for councils on room sizes in rented homes.

The guidance addresses concerns raised by the Residential Landlords Association (RLA) that recent changes to room size regulations could have led to landlords being in breach of the law where a pregnant tenant gave birth.

Since October this year, rooms used for sleeping by one person over 10-years-old have had to be at least 6.51 square metres, and those slept in by two people over 10-years-old will have had to at least 10.22 square metres. Rooms slept in by children of 10 years and younger have had to be at least 4.64 square metres.

Whilst the RLA believes that tenants should never face the dangers of overcrowded 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. A landlord who sought to evict in this scenario would be carrying out unlawful discrimination.

Following extensive discussions with the Government, newly published guidance makes clear that this will not happen. It notes that in instances where a tenant has given birth to a child since moving into a House of Multiple Occupation (HMO), that there is an expectation that local authorities will not be acting in the public interest if they commence a prosecution.

David 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 alike.”

Source: Property118

Marketing December 8, 2018 No Comments

Local authorities still unsure how many HMOs should be licensed under new rules

New analysis claims to highlight how unprepared local councils are for the extra regulations on HMO licensing.

A freedom of information request by Simple Landlords Insurance to 90 local authorities found that 65 (72%) had no idea how many unlicensed HMOs there may be in their area, while 29 (32%) had no idea how many properties should come in under the new regulatory scheme.

Since 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.

The research also found 31 (34%) councils out of the 90 had not prosecuted any landlords for infractions of existing rules in the past two years.

There were only 103 HMO licences rejected at application over the past 12 months, with a total of 18,881 licenses granted.

It echoes similar data from property investment firm Touchstone that found only a minority of local councils had an idea of how many properties would need to be licensed under the new rules.

Housing minister Heather Wheeler said at the time of the changes in October that the new rules would increase the number of mandatory HMO licensed properties in England from 60,000 to an estimated 220,000 properties.

However, Richard Truman, head of operations at Simple Landlords Insurance, said this research shows local authorities are hamstrung in their efforts to apply the new legislation, due to a combination of poor intelligence about housing stock and stretched resources.

He said: “Earlier this year, we found that 85% of landlords we spoke to weren’t aware of the looming HMO regulations. A month on from their implementation, we wanted to find out exactly what those landlords are facing on the ground.

“The changes may be well-meaning, but a failure to support local authorities to communicate about them and enforce them is bad news – for good landlords and for tenants.”

Source: Property Industry Eye

Marketing December 7, 2018 No Comments

Is the government’s HMO legislation failing?

New figures obtained by Simple Landlords Insurance appear to show that government plans to protect tenants from poor living conditions through the expansion of mandatory HMO licensing look set to fall way short of their ambition.

According to the data, the majority of local authorities don’t know how many unlicensed HMOs are in their area – let alone where they are – leaving them ill-equipped to seek those who break the rules or take advantage of new enforcement powers.

The findings reveal that the rules are “practically unenforceable”, according to one HMO licensing expert, with the government’s recent commitment of £2m of additional funding to help implement the scheme unlikely to have any real impact.

The freedom of information requests returned by 90 local authorities have shown that two thirds (65/90) of local authorities have no idea how many landlords are breaking HMO licensing rules, nearly one third (29/90) have no idea how many properties should come in under the new regulatory scheme and over a third (31/90) did not prosecute any landlords for infractions of existing rules in the last two years.

There were only 103 HMO licences rejected at application over the last 12 months, versus a total of 18,881 licenses granted.

Houses in Multiple Occupation (HMOs) containing five or more people in two or more households with shared facilities such as a kitchen, bathroom or toilet must be licensed.

To gain a license, landlords must now pass a ‘fit and proper’ test as well as providing proof of compliance with fire safety regulations and provide tenants with a written statement of the terms of their occupancy. The rules were widened on 1 October, removing a minimum three storeys high requirement whilst new conditions on minimum room size and waste collection were imposed.

The known unknowns

The government’s Housing Minister Heather Wheeler MP claimed the new rules would increase the number of mandatory HMO licenced properties in England from 60,000 to an estimated 220,000 properties.

However, this new research shows local authorities are hamstrung in their efforts to apply the new legislation – due to a combination of poor intelligence about housing stock and stretched resources.

Carl Agar, founder of The Home Safe Scheme and managing director of property management company Big Red House, says: “It’s a big worry that local authorities don’t seem to have the resources available to manage this new workload. And the new rules are going to be practically impossible to enforce. The government is essentially relying on honest landlords coming forward to apply for a licence – leaving the so-called rogue or down-right criminal landlords that really need to be identified – out of scope. The £2m promised support is literally a drop in the ocean.”

Cities overwhelmed

Amongst the local authorities that have the intelligence and data to make a prediction about how many more HMOs would need a license, cities unsurprisingly show a major hike.

Liverpool City Council had 1,195 HMOs with a mandatory license before 1 October, and expects that 5,000 will require licensing. Birmingham expects numbers to swell from 1,853 to 4,000 and Southampton expects the numbers will increase from 551 to 2500.

Many London boroughs had no idea at all how many additional HMOs would come under scope, whilst those that did are expecting a huge jump – in Greenwich from 147 to 3,250 HMOs under scope.

66% of the local authorities who responded were able to estimate how many HMOs were likely to require a mandatory license from 1 October, and the average increase recorded was 227%.

Carl adds: “Many local authorities are now faced with at least twice as many licences to process and check with the same amount of human resource – leaving even less time for enforcement. The major conurbations will be swamped.”

Mystery housing stock

Environmental Health Officer and Chair of the National HMO Network Paul Fitzgerald, explains: “Most local authorities simply do not fully understand the housing stock in their area, and they are kidding themselves if they claim that they do.

Trying to identify an HMO from scratch is an incredibly challenging job, made harder by the failure to join up systems like council tax and benefits registers, and immigration databases. Those who are determined to break the law do not apply for a licence in the first place.

Once they have been identified, dealing with criminal HMO landlords will be yet another problem. Pursuing a prosecution – or applying for a banning order – takes time, stretches resources and is not guaranteed. Many local authorities will opt for issuing fines, but there’s no guarantee that these will be paid without going to court, and that’s another resource and cost-heavy process.”

The bottom line” sums up Carl Agar “is that the Housing Act, in its current form, is no longer fit for purpose and the government need to prioritise helping local authorities know who is renting property in their areas and what type of properties are being let. A central government funded national register would be a major step forward.”

Richard Truman, Head of Operations at Simple Landlords Insurance commented: “Earlier this year, we found that 85% of landlords we spoke to weren’t aware of the looming HMO regulations. A month on from their implementation, we wanted to find out exactly what those landlords are facing on the ground.

The changes may be well-meaning, but a failure to support local authorities to communicate about them and enforce them is bad news – for good landlords and for tenants.

We want to see the emerging class of professional landlords supported by central government and local authorities, and that can clearly only be achieved with more effective regulation and resource.”

Source: Property Reporter

Marketing November 5, 2018 No Comments

Advisers urged to help landlords with HMO licencing changes

Advisers need to help landlords who may be receiving letters from lenders about their mortgages due to HMO licencing changes, two lenders urged at FSE Midlands in Coventry today.

The changes are thought to mean 177,000 properties now require a HMO license.

David Whittaker (pictured), managing director of Keystone Property Finance, and Adrian Moloney, sales director at OneSavings Bank, highlighted how some landlords are already receiving letters from their buy-to-let lenders regarding properties which may now require a license.

Whittaker said: “Landlords are punch-drunk from the regulatory changes of the last few years.

“This is the law of unintended consequences in full effect and you would expect some common sense from lenders.

“Lenders should say that, as long as there are no changes to the property or that the landlord doesn’t want a further advance, that they can keep the loan.”

Before the Budget there was a suggestion that landlords might be able to get capital gains tax relief if they sold their properties to long-standing tenants.

Both Whittaker and Moloney were not surprised that this didn’t happen.

Whittaker said: “It was never going to fly. Anything that would line the pockets of landlords is not going to happen.

“HMRC and the Chancellor see the landlord community as a group that traditionally hasn’t paid its wedge.

“Landlords do not draw any empathy in the corridors of Whitehall.”

Moloney said: “If your investment is good why would you get rid of it?

“Sales of property investments have not been really picked up in the main by first-time buyers anyway, they’ve been picked up by other landlords.”

Source: Mortgage Introducer

Marketing October 11, 2018 No Comments

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.”

Source: Property Industry Eye

Marketing October 2, 2018 No Comments

New HMO and Section 21 rules start today

Landlords and agents should be aware of important changes to the rules covering HMOs (house of multiple occupation) and issuing Section 21 notices, which come into force from today.

New HMO rules

From today, all landlords, or managing agents, of properties which have five or more occupiers who form two or more households will need to have, or have applied for, a mandatory HMO license.

If you have a property with five or more occupiers who do not form just one household, and this includes children, regardless of the number of storeys the property has, you need an HMO license issued by your local authority.

There is no grace period and the penalties for not complying can be severe: up to a £30,000 fine, a First Tier Property Tribunal Rent Repayment Order and a Banning Order, and a criminal record.

Some landlords may need to make structural alterations or improvements to safety standards to comply with the new minimum room sizes in HMOs.

New section 21 rules

From today, all landlords in England with Assured Shorthold Tenancies (ASTs), regardless of their start date, will need to comply with the requirements of the Deregulation Act 2015 as to when and how a landlord can serve a Section 21 Notice, which enables them to terminate a tenancy agreement.

When issuing a Section 21 Notice of Possession, landlords will now be required to use Form 6A.

The form, prescribed by government, combines the two previous types of Notices into a single Notice for both periodic and fixed-term tenancies. Therefore, landlords should stop using their old Notices from today.

In addition, under the Deregulation Act 2015, landlords wishing to issue their tenants with a Section 21 Notice should ensure they have shared the ‘How to rent: the checklist for renting in England’ guide with tenants; make sure the property has an up to date Gas Safety Certificate and the tenants have seen it.

Landlords must also publish the property’s Energy Performance Certificate (except when the property isn’t required to have one); inform tenants which scheme their deposit is protected in; where the property is licensed, provide a copy of the licence to all of the tenants.

Source: Simple Landlords Insurance

Marketing October 1, 2018 No Comments

New regulations for landlords in 2018: HMO licences, eviction changes, mortgage relief cuts and more

October sees the introduction of yet more new rules for landlords to keep on top of.

Recent years have seen a host of changes for landlords to deal with, a succession of policy tweaks that risk making their portfolio more complicated to administer and even less profitable.

Generally these changes are limited to the start of a new tax year, but next month will see the introduction of new rules covering houses in multiple occupation (HMO) and evictions.

Here’s what you need to know.

Licensing for HMOs

From 1st October, there will be a significant change to the licensing of houses in multiple occupation (HMOs) for landlords.

Currently, you only have to get a licence if the property has at least three storeys and is being occupied by five or more individuals, who are not all related to each other.

In addition, some local authorities can require licences for HMO properties in specific areas, even if they don’t tick either of those boxes.

Licencing is about to become far more widespread though, as the minimum property size is being removed. As a result, any HMO properties with five or more occupants will require a licence.

You’ll need to get a move on too as you need to have applied for your licence before 1st October, otherwise you’ll be classed as renting the property out illegally.

Minimum room sizes for HMOs

The changes to licences aren’t the only development for HMO landlords to be aware of. There will also be minimum room sizes for any room being used as a bedroom.

The minimum sizes are:

4.64㎡ for any room in which one child under the age of 10 sleeps
6.51㎡ for any room in which one person over the age of 10 sleeps
10.22㎡ for any room in which two people over the age of 10 sleep

Any rooms that are smaller than 4.64㎡ cannot be used as a bedroom. In fact, if there is any room within the HMO that is smaller than that, irrespective of how it’s being used, the landlord will have to inform the local housing authority.

New eviction rules

One of the ways that a landlord can take back possession of a rental property is by issuing them with a Section 21 notice. The landlord doesn’t have to give a reason for claiming back possession but must provide the tenant with at least two months’ notice.

The Deregulation Act 2015 changed the way that a Section 21 notice can be used to bring some tenancies to an end, though this was limited to tenancies agreed on or after 1 October 2015.

However, from 1st October 2018, this is being extended to all tenancies.

So what’s changing? For starters, a Section 21 notice cannot be issued during the first four months of a tenancy (though this doesn’t apply if a tenancy has been renewed).

In addition, the notice is only valid for six months from the date on which it was issued. If you don’t follow up with possession proceedings within that six month period, you’ll have to issue another Section 21 notice.

The big change though is over ‘revenge evictions’.

Essentially, if a tenant makes a legitimate complaint about something to do with a property, such as repairs that are needed, and they aren’t dealt with then the tenant can take the issue to the local housing authority.

If the council then issues an improvement notice or emergency work notice ordering the improvements to be carried out, then you will need to act on that before issuing a Section 21 notice. Otherwise, your notice will be invalid.

So those are the key changes you need to be aware of for October. Now let’s look a little further back at the other changes that have already happened in 2018.

Ongoing changes to mortgage interest relief

Before April 2017 it was possible for landlords to deduct the interest they paid on their mortgages from their taxable income – which meant they paid tax on their profits rather than their turnover.

However, the Government decided to change the rules on that, amid concerns that buy-to-let landlords gained tax benefits that homeowners couldn’t, giving them an unfair advantage. That all began changing in the last year.

From April last year, landlords were only able to claim relief on 75% of their mortgage interest. From April this year, that fell to 50% and it’s going to keep galling until it reaches 0% in 2020.

At that point, it will be replaced by a tax credit equivalent to 20% of mortgage interest.

Changes to energy efficiency measures

New rules mean that from April this year new tenancies and renewals need to be at least rated E on their Energy Performance Certificates.

This rule will be rolled out across all tenancies over the next two years and landlords who don’t meet the requirements could face fines of up to £5,000.

Most rental homes will easily comply with this new rule as the vast majority of recently built homes will easily meet that efficiency rating.

However, an estimated 330,000 rented homes were below this standard when the rule was implemented in April, according to Which?.

While listed properties may be exempt, landlords of non-listed but older and structurally less efficient homes may need to worry.

The Rogue Landlord Database goes live

It’s finally happened; after many pledges from Government, it has finally set up a national database of ‘rogue’ landlords to share with Local Authorities.

The Ministry of Housing, Communities and Local Government has created the database, which will include landlords who have a conviction for offences such as letting overcrowded properties, unlawful eviction and gas safety offences.

Its plan is that councils will be able to share data with each other more easily so they can monitor problem landlords more closely.

However, the list will not be made public and, because of that, the scheme has received some serious criticism.

David Cox, chief executive of the Association of Residential Letting Agents (ARLA) says that it was a good idea but has been poorly executed.

“When this legislation was first announced, we were wildly supportive – anything which will help eradicate bad letting agents and landlords has our full support,” he explained.

“However, the outcome is disappointing. The database won’t be public, which means no one will be able to see it and therefore letting agents and landlords who are on the list can continue operating with impunity.

“This appears to be a pointless exercise; if the list were made public – like the equivalent for estate agents – rogue agents and landlords would leave the market for good.”

Letting fees ban

It’s not part of the 2018 tax year changes, but it’s possible it will come into force at some point in the next seven months, along with limits on deposits.

If the new legislation was put through, tenants could not be charged high fees just to apply to rent a new home. Some tenants are even charged high fees just to renew their tenancies each year.

The ban may not directly affect most landlords but many letting agents and industry commentators have suggested that it will mean a hike in prices for them as their agents recoup their lost profits.

What else could be coming?

Landlords might be getting tired of the political spotlight but with more and more people renting, especially younger people, mainstream politicians are increasingly recognising there’s a public appetite for housing reform.

So there’s likely to be more changes even before the next tax year. There has been talk of a new Ombudsman that could deliver binding resolutions to owner/tenant disputes.

There’s likely to be a new code of practice introduced to increase greater fairness for renters and the Draft Tenant Fees Bill could well mean that rental deposits are capped at six weeks’-worth of rent.

Source: Love Money

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