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Why location is critical for the HMO market

Grant Hendry, director of sales at Foundation Home Loans, explores how HMO licensing, stock availability and cost varies from region to region and why a number of great HMO opportunities remain available to landlords in the current market.

The modern mortgage market is awash with complexity from a borrower, intermediary and lending standpoint. This is further exacerbated by additional financial pressures being felt by households across the UK – both owner occupied and rental – and some lingering uncertainty over the impact of recent events on interest rates and house prices.

Inevitably, increased living costs are leading to some people having reconsider their immediate homeownership aspirations and the demands of their current accommodation. For landlords, many have gone back to basics in terms of delving deeper into their yield, void and cost calculations. When it comes to yield, houses in multiple occupation (HMOs) have historically topped these charts and proved an attractive option for the more hands-on landlords who have the knowledge and experience to manage differing tenant and property demands.

This yield equation was evident in the most recent BVA BDRC Landlord Panel research for Q4 2022 which outlined that HMO properties went back to the top spot of the rental yield table. These were reported to be offering the strongest yield by property type, at 6.4% for the quarter, followed by multi-unit blocks at 6.2%.

Furthermore, the research also suggests that the proportion of gross rental income spent on maintenance and running costs of HMOs hit a low in Q4 at 26% from the high of 29% experienced in both Q1 and Q3. For the full picture, the proportion of gross rental income spent on maintenance and running costs of HMOs was recorded at 28% in Q2 2022 and 24% in Q4 2021.

Demand remains strong amongst landlords and tenants, meaning that this remains an area of lending in which we at Foundation Home Loans continue to see strong levels of business. Although, there are also an argument to be made that this is more down to our approach – we are one of only a few lenders which don’t load ICRs on such property types – rather than currently being the industry norm.

To find out more about how we can assist you with your HMO Mortgage please click here

With such strong yields, albeit with additional costs actuated, this means that the HMO market is flourishing right? Right?

It seems that location is critical for this particular market.

As outlined in recent market analysis by Sirius Property Finance, while a raft of regulations have led to increased tenant welfare, these have also contributed to a decline in HMO numbers.
Taking a trip back in time for a moment, October 2018 saw the UK government extend the mandatory licensing of HMOs to cover the vast majority of properties containing five or more people from two or more separate households. Previously, only properties with three or more storeys containing five or more people from two or more households required an HMO licence.

There can be no argument that improving the safety and living standards for tenants is a huge step in the right direction. However, this has also placed increased pressure on landlords with some opting to offload their HMO properties rather than dealing with the added costs.

As highlighted in the aforementioned Sirius analysis, this has led to the overall number of HMOs falling by -2.4% in the past year, but this drop is dwarfed by some incredible regional declines. The East Midlands was suggested to have recorded an annual HMO stock decline of -26.1%, the North East has seen HMO stock levels drop by 15.8%, while in the South East numbers are down -6.7%. However, these falls are not universal across all regions. Indeed, the likes of the West Midlands (16.9%) and Yorkshire & Humber (11.2%) recorded impressive annual stock growth over the past year.

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These figures demonstrate how HMO licensing, stock availability and cost varies from region to region and, as with any property investment, it’s vital that landlords do their due diligence before entering into this arena. However, a number of great HMO opportunities do remain available for those landlords who are looking to maximise yields and capitalise on rising levels of tenant demand.

There are also plenty of attractive options from an HMO product perspective. Especially from those lenders who are highly experienced in this type of lending, who are finely attuned to the needs of such landlords and have the underwriting capabilities to match their ever-changing needs.

By GRANT HENDRY

Source: Financial Reporter

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Truss to announce stamp duty cut – report

UK housebuilders rallied on Wednesday following a report that Friday’s mini-budget could include a plan to cut stamp duty.

According to The Times, prime minister Liz Truss will announce the move in the mini-budget in an attempt to drive economic growth. It was understood the PM and chancellor Kwasi Kwarteng have been working on the plans for more than a month.

Truss believes that cutting stamp duty will encourage economic growth by allowing more people to move and enabling first-time buyers to get on the property ladder, The Times said.

It cited two Whitehall sources as saying that cuts to stamp duty were the “rabbit” in the mini-budget, which the government is billing as a “growth plan”.

Under the current system, no stamp duty is paid on the first £125,000 of any property purchase. Between £125,001 and £250,000 stamp duty is levied at 2%, £250,001 and £925,000 at 5%, £925,001 and £1.5m at 10% and anything above £1.5m at 12%. For first-time buyers the threshold at which stamp duty is paid is £300,000.

During the pandemic, then chancellor Rishi Sunak lifted the stamp duty threshold to £500,000.

At 0910 BST, Persimmon shares were up 5.4%, while Taylor Wimpey and Barratt were up 4% and Berkeley was 3.5% firmer. On the FTSE 250, Redrow was 5.6% higher, while Bellway and Crest Nicholson were up 3.6% and 3.4%, respectively.

Tom Bill, head of UK residential research at Knight Frank, said: “Nobody can accuse the new government of lacking an economic vision. If its low-tax approach extends to stamp duty, recent history tells us it will trigger higher levels of demand in the housing market at a time when mortgages are getting more expensive, which will support social mobility.

To find out more about how we can assist you with your HMO Mortgage please click here

“Prices could move higher in the short term if supply initially struggles to keep up but more balanced conditions will return provided the cut is immediate and permanent.”

Neil Wilson, chief market analyst at Markets.com, referred to the potential stamp duty cut as “the old Tory trick of juicing the housing market in its heartlands to boost confidence (wealth effect) whilst doing not a lot for housing supply”.

“I’m not for concreting over the green belt at all, but there will be questions about the economic soundness of this policy, as there always is. However, with interest rates rising so quickly, an offset to the cost of buying a home would grease the wheels of the market -without higher rates could cause the housing market to seize up.”

He added: “Clearly a stamp duty cut is good news for housebuilders who can expect higher selling prices as a result.”

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, argued that a stamp duty cut could do more harm than good.

“Buyers are unlikely to be unhappy at the prospect of a tax cut, but if the government chooses to cut Stamp Duty in an effort to stimulate the housing market, there’s a risk it could do more harm than good.

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“It’s easy to see why the government is concerned about the housing market. We’ve seen demand fall consistently since May, when rocketing bills, rising house prices and ever-increasing interest rates started to take a toll on buyer enthusiasm. There’s a risk that if rate rises accelerate, pressure on buyers could reach a tipping point, where demand dries up.

“We know from very recent experience that a Stamp Duty holiday can stimulate demand. However, the only reason these holidays work is because people feel they have a small window of opportunity to take advantage, otherwise they’ll miss out. The point at which they think they can just wait for the next one, they will start to become less effective.

“Even if it does stimulate demand, it overlooks the fact that the real brake on the property market is a severe shortage of supply. With an average of 36 properties on each agent’s books, we’re still close to an all-time low in the availability of property for sale. Driving demand without addressing supply would risk more buyers chasing a tiny number of properties, which would push prices up.

“By ramping up prices at a time of rising mortgage rates, the end result would be higher monthly mortgage costs, which would be increasingly unaffordable. And the Stamp Duty holiday wouldn’t help on this front. This in itself could be enough to put buyers off, and if it deters enough of them, it could end up having the opposite impact to the one that’s intended.”

By Michele Maatouk

Source: Sharecast

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New crackdown approved to tackle substandard HMOs in Dudley

A new crackdown on substandard HMOs has been approved in Dudley to stop rogue landlords who cram tenants into overcrowded homes.

Councillors say they need to “make sure that new homes in Dudley Borough meet a certain standard of quality for the good of the people who live in them”.

Developers looking to turn a property into an HMO (house in multiple occupation) for up to six people will now have to apply to Dudley Council for planning permission under the new ‘Article 4 Direction’ passed this week.

While HMOs help to meet a specific housing need, especially for those on a low income, there are concerns that high concentrations in certain areas are harming their character, putting pressure on infrastructure and diminishing community relations.

It is claimed the main issues with HMOs revolve around anti-social behaviour, noise, inadequate living conditions, litter and parking issues.

To find out more about how we can assist you with your HMO Mortgage please click here

Evidence provided by West Midlands Police and the council’s anti-social behaviour team found a correlation between HMOs and increased crime and drug offence levels.

The ‘Article 4 Direction’ has now been rubber-stamped after a six-week consultation period. Councillors say the new legislation will allow the council to keep tabs on the standards of homes across the borough.

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Councillor Simon Phipps, cabinet member for regeneration and enterprise, said: “We need to make sure that new homes in Dudley Borough meet a certain standard of quality for the good of the people who live in them and other residents in the local area.

“It’s clear from the evidence gathered that the unchecked creation of small HMOs using permitted development rights undermines our ability to properly plan developments in our neighbourhoods.

“Our plan will create consistency in the planning system so all HMOs must go through the scrutiny of a planning application before they are created. But we won’t just stop at this measure, because the emerging Black Country Plan will also introduce new policies to make sure new homes are better quality and do not detract from the wider local area.”

By Josh Horritt

Source: Express & Star

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HMO Property Investment Services in the UK: What You Need to Know

If you’re looking for information on HMO property investment services in the UK, you’ve come to the right place. In this blog post, we’ll discuss what HMO investment services are, and how they can help you achieve your financial goals. We’ll also provide a list of resources where you can learn more about HMO investing and find professionals who can help you get started.

What is a HMO investment?

A HMO investment is a type of property investment that allows you to purchase multiple properties under one roof. This type of investment can be beneficial for both investors and tenants, as it provides a way to reduce costs and increase profits. When done correctly, investing in a HMO can provide a steady stream of income and long-term capital growth.

Is HMO a good investment?

HMO property investments can be an excellent way to generate income and grow your wealth over time. However, there are some risks associated with this type of investment, so it’s important to do your research before getting started. If you’re ready to learn more about HMO investing, we recommend checking out the resources below.

What is a good ROI for HMO?

There is no definitive answer when it comes to what a good ROI for HMOs is, as it will vary depending on a number of factors. However, many investors aim for a minimum return of 15% per year. To learn more about how to achieve this, we recommend speaking with a professional HMO investment advisor.

To find out more about how we can assist you with your HMO Mortgage please click here

Where can I find HMO investment properties?

There are a number of ways to find HMO investment properties, including online listings, estate agents, and word-of-mouth. We recommend speaking with a professional HMO investment advisor in the area you want to purchase in to learn more about the best way to find properties that fit your needs.

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Things to consider when buying a HMO

HMOs, like any other financial investment, have advantages and disadvantages. It’s important to evaluate these factors and decide whether it’s the right option for you.

Pros

  • Strong rental yield when compared with buy-to-let
  • Lower risk of rental voids
  • As the rent is shared among several tenants, the impact of overdue payments is reduced.
  • If the location is right, tenant demand for low-cost housing is high.

Cons

  • Managing the property can be more difficult
  • Start-up costs can be higher if conversion is needed
  • Running costs can be higher
  • Arranging HMO finance can be tougher
  • What are regulations of HMOs?

HMOs must adhere to stricter rules and standards than Buy-to-Lets in general, especially when it comes to fire safety and planning permission. As a result, you’ll also find that the fines for non-compliance are greater. Speak to a good estate agent who specialises in HMO like Mistoria Group who are HMO experts and have helped many landlords successfully let these properties across the UK.

By LINDSEY BENSON

Source: News Anyway

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First time Bridging Loan – Heavy HMO Refurb – Case Study

The Client

We recently were successful in assisting a First time Landlord client in purchasing a standard 3 bed Victorian terrace. Their goal was to turn the property into 6 bed HMO by extending to the rear and converting the loft space.

The client only had enough funds to cover the initial deposit, stamp duty, fees, and the initial tranche for phase one of the works.

The Property

Since the property was to be heavily refurbished and developed, obtaining a traditional mortgage for such a property development is just not possible. Typically, lenders will only lend you the money to buy the property, meaning you wouldn’t be able to carry the conversation. Plus, with such significant works being carried out lenders would have major concerns about their security, probability of the works completing and future value.

Contact us today to discuss Bridging Loans and how we can assist you.

This is where a Bridging Loan works perfectly and really adds value.

Most Bridging Lenders can lend up to 70/75% net of fees to help buy the property, based on its current value, pre conversion. In addition to this, they can also lend a further sum of money to assist the completion of the major building works. Typically, a facility of up to 70% of the Gross Development Value is available.  (GDV = value of the property after the works have been complete).

In this clients’ particular scenario the property was purchased for £345,000. After the works were completed, the property was worth £650,000.

Note – 100% LTV for bridging finance is available if you have additional security in the background.

To add even more difficulties to the equation, the client had never completed such a development / refurb project before, nor had any building or landlord experience. Most bridging finance lenders would require you to have some exposure in this type of environment.

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The Resolution

Despite the limitations, we were able to secure the client a competitive deal that enabled to them to complete the transaction and finish off all the works needed.

However, it doesn’t end there… Like any form of finance, bridging loans also need to be paid back, usually within 12 months.

Typically, there are two repayment strategies for bridging finance:

  • Sale of the asset, OR
  • Refinance the loan onto a traditional term mortgage

In this client’s scenario the exit plan was to refinance as they wanted to benefit from the rental income.

This posed another problem however, as the client was considered a first-time landlord, having never let a property before. On top this the tenancy was for an HMO and the property was to be owned/let via a Limited Company.

The majority of Buy to Let lenders will not lend to applicants looking to arrange a HMO having never had any Landlord experience before, as they consider this type of buy to let very specialist and high risk. However, this wasn’t an issue for us, we were able to source a competitive HMO Mortgage deal for the client enabling them to pay off the bridging loan within the loan term and achieve their HMO landlord dreams.

To know more and speak to one of our Bridging Finance Expertscall us now on 03303 112 646. You can also fill in this short online form to get started. Our team of Bridging Loan Experts will get back to you straight away.

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Back to basics – why the increase in interest in HMOs and MUFBs

Houses in multiple occupation (HMOs) have become much more popular over the past few years.

So what exactly are HMOs, how do they vary from multi-unit freehold blocks (MUFBs) and why should you be interested in them?

The definition of an HMO as defined by the government is: ‘A property rented out by at least three people who are not from one ‘household’ (for example a family) but share facilities like the bathroom and kitchen.’

In comparison an MUFB is multiple, separate, independent residential units held under a single title.

So a unit of self-contained accommodation to put it clearly, this means it has its own bathroom and toilet and a kitchen or cooking area for the exclusive use of the individual or household living there.

If the individual or household needs to leave the unit or flat to get to the bathroom or kitchen, then it is not self-contained.

Examples of an MUFB include: purpose-built blocks of flats, houses converted into flats or it can be a number of houses all held under one freehold title.

It is also important to note that properties which do not fall within any particular use class for the purposes of planning permission are classified as ‘sui generis.’

This is Latin for ‘of its own kind’ and means that more bespoke and local rules will exist. Buildings falling under sui generis include HMOs with seven or more bedrooms.

There are many advantages to the landlord or investor in investing in an HMO, for a start the yields are higher.

To find out more about how we can assist you with your HMO Mortgage please click here

By having multiple different tenants each paying rents then the yields are a lot higher and present a lower risk as the chance of void periods where the property is completely empty is much lower than it is when renting a property to a single family or household.

Demand for HMOs is high at the moment too. Students are one of the biggest drivers of demand of HMOs as this provides affordable – and arguably more sociable – accommodation, something in high demand at this time of lock down.

But HMOs are no longer just the domain of students; as single-household accommodation becomes less affordable, the demand for HMO accommodation is rising, which is good for investors looking to expand into this area.

There are things to be aware of with HMOs however. If the property is let to five or more tenants from more than one household, and some or all the tenants share toilet, bathroom or kitchen facilities, then it is mandatory for the landlord to hold a licence.

This licence is granted by the local authority that the property sits in. In addition, different local authorities can require additional licensing, so it’s imperative for the landlord to know its local authority’s position before investing in the property.

The sort of things that a local authority will look for in order to grant a licence is floor area. There are strict rules on how big a bedroom needs to be based on how many people are sleeping in it.

There will also be additional rules around fire safety, with fire doors, fire extinguishers and sometimes and additional fire escape being mandatory.

Article 4 direction

Landlords also need to be aware of what is called ‘Article 4’. Article 4 direction is a statement made under the Town and Country Planning Acts.

The ‘direction’ removes all or some of the permitted development rights on a site.

Existing HMO’s rented prior to the planning requirement coming into place automatically qualify, however any gap in HMO rental means you lose Article 4 permission.

Therefore a landlord who purchases a property to convert to an HMO has to be aware of any current or potential Article 4 directives.

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Particularly when purchasing, for example, a three bedroomed property to convert into an HMO where they may not be aware that Article 4 will then apply.

It is only very rarely that a council gives Article 4 retrospectively either, so brokers can play a valuable role by flagging this up to their clients.

This also occurs with ‘sui generis’ properties. Any landlord who purchases a six-bedroomed dwelling who wants to make it larger and add an extra room or more will have to get local authority planning for sui generis use – even if the property already has Article 4 permissions.

Finally, the type of valuation that an investor needs to have also depends on the size of the property.

For an HMO with up to six bedrooms, the investor will need an investment valuation. If they then own seven or more properties they will need a ‘red book’ commercial valuation.

While a number of lenders will lend on HMOs, MUFBs and those falling into the sui generis category, the criteria will differ from lender to lender.

Different lenders will lend on HMOs with different room numbers, for example Landbay will lend on a property with up to 12 bedrooms, but others will not go up that high.

Finally, lenders will typically look at how much experience a borrower has in letting out that size of property.

Most lenders will expect the borrow to have experience of letting a similar sized property, so don’t expect your client to be able to go from renting out a couple of standard, single household residential properties to an HMO with 12 rooms.

Demand for flexible accommodation is on the rise in the UK and with HMOs no longer seen as simply a residence for students, they can be a sound investment, delivering higher yields.

HMO’s stand strong against market fluctuations and can deliver a consistent demand.

Just ensure your client is aware of the rules, regulations and tax policies when expanding into this arena.

By Paul Brett

Source: Mortgage Introducer

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Plans submitted to create new five-bedroom HMO in Connah’s Quay

Plans have been submitted which could see a three-bedroom house in Flintshire converted into five bedsits.

The application would see the use of the property on Howard Street in Connahs Quay change to become a house in multiple occupation (HMO).

A letter submitted on behalf of the landlord states the proposals have been put forward due to the need for small housing units in the area.

Although concerns have previously been raised in Flintshire regarding the impact of HMOs, planning consultant Adrian Thompson said the development would make “efficient use” of the house.

He said: “The change in use safeguards the living conditions of neighbours and the character of the area.

“Granting permission will not lead to proliferation of HMOs in the area, because this is the only known HMO on Howard Street, and the nearest known HMOs are on another street. It is a semi-detached property.

“The original internal layout has been retained, with the first floor as it was and on the ground floor the lounge and sitting room re-purposed as bedrooms.

“The ground floor retains the kitchen, dining room, a downstairs toilet and a shower room.”
Questions have been raised in the past by councillors regarding the living standards provided to tenants in HMOs.

According to the documents, the smallest bedroom at the property measures 8.2 square metres, which is below the amount suggested by Flintshire Council in an advice note to developers.

But as the guidance has yet to be adopted formally, Mr Thompson said the indication that living quarters should measure at least ten square metres would carry little weight.

Comments are currently being invited on the application via the local authority’s website.
Planning officials are aiming to make a decision towards the end of June, but timescales are currently delayed due to the coronavirus pandemic.

By Liam Randall

Source: Deeside

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Increased HMO charges ‘should not be passed onto students’ says Fife Council

There is no need for any increase in charges for HMO (house of multiple occupancy) licenses to be passed on to students who are concerned about rent rises, Fife Council has reiterated.

Every HMO needs a licence to make sure health and safety standards are met for residents. The council has recently updated the charging structure for licenses, bringing it into line with other local authorities, and making sure the increasing costs of administering the system were not passed on to taxpayers. Fees have not been increased since 2006.

John Mills, Fife Council’s head of housing services, said: “Any suggestion that the council is somehow responsible for a rise in student rents is just scaremongering.

“Based on current figures, the University charges £21,000 for an individual student over three years. Our HMO fee for one student in that time (in an HMO of five people) is under £300. My understanding is that St Andrews University charges one of the highest residential fees in Scotland. There has to be some perspective here.”

Mr Mills added: “The new charging structure now covers the full cost of the HMO licensing service, including administration, property inspections and verification, democracy and compliance costs. We’ve moved from a flat-based fee structure to one that takes account of the number of occupants in an HMO, and the resources spent on each application through a sliding scale of charges.

“There should be no suggestion that this will lead to rent rises for students. Any rises in rent are at the discretion of the University, and there is nothing to suggest that a rise in the fees the council charges for HMO licenses should be passed on to students. Any charges are a very small proportion of the rental income received by HMO owners.

“I would urge any parents or students who are concerned about a potential rise in rents to raise this directly with the University, as the organisation deciding how much should be charged for student housing.”

Source: Scottish Housing News

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Councillors aim to examine Wrexham’s licensing of houses in multiple occupation to review local standards

Calls for councillors to scrutinise the licensing of houses in multiple occupation (HMOs) across Wrexham have been made.

A topic request form signed by Holt councillor Michael Morris and Smithfield councillor Adrienne Jeorrett has been submitted for consideration by members of the homes and environment scrutiny committee.

It states that: “For some time members have expressed concern over the quality, appropriateness and size of accommodation which is offered to individuals residing in houses in multiple occupation (HMOs) and which is controlled by the licensing regime rather than through the planning process.”

Such concerns over the size of accommodation and amenity space provided in some HMO proposals have been raised numerous times over the years by councillors and planning committee members.

Speaking about plans to convert a property on the outskirts of the town into a HMO last December, Cllr Jeorrett said it was a “great disappointment that adults are having to live in one room with a long term impact on health and wellbeing.”

As part of the work looking into the licensing of HMOs, it is suggested that scrutiny “undertake a review of how the current standards were arrived at” and if they are nationally prescribed or determined locally.

It also proposes that the committee:

– Compare with other Local Authorities to establish if our standards are more or less generous than others and if they need reviewing.
– Consider the issue of bed spaces versus bedrooms and occupancy numbers.
– Consider how to ensure that HMOs offer a reasonable standard of accommodation by providing rooms of an adequate size for the number of occupants and reasonable communal living areas/ circulation space.
– Establish if there need to have differing standards for the various types of HMO eg. those that primarily house contractors who are working in the area and those that are conventionally let to tenants – (the former having a much greater parking need)
– Possibly look at a “Landlords Charter” on how they will deal with complaints

It is hoped that the scrutiny committee will help “remove the tensions between determining planning applications and and the licensing regime for HMOs” – along with “ensuring a better quality of accommodation for the tenants” and “reducing the tensions with the adjoining community neighbours”.

It is estimated that the topic will take four months to be examined by scrutiny members.

Previously in 2017 we have reported how there has been concerns that there is a lack of staff due to council cuts for inspections, as well as the implication there could well be a large number of unregistered HMO’s out there.

At the time we reported, “Detail was given to the meeting over the five year inspection periods, with an officer explaining that although the five years is the maximum mandatory inspection period, HMOs that are of concern could be inspected much more regularly such as six monthly. Lead Member for Housing, Cllr D J Griffiths, did point out that it was a chicken and egg situation at times as without investigating properties the council would not know of any issues to deal with, but without the staff to do so then investigations may not be as frequent” and “More detail was given on work done to locate unregistered HMOs, including: “There are probably more HMOs than are legally registered, but it is finding them is the challenge. We look at various sources, council tax bills, housing benefit information, or even looking on the internet to see what is to let locally.”

Source: Wrexham

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Edinburgh landlord stripped of HMO licence but maintains Airbnb listing

An Edinburgh landlord has been stripped of his HMO licence after he caused flooding to a neighbour’s property, but he has been allowed to continue to use the property as an Airbnb.

Edinburgh City Council’s licensing sub-committee refused Mr Tahir Ali’s renewed HMO application for his flat on Clerk Street after councillors heard complaints over flooding and anti-social behaviour, all whilst building work was carried out on the property without proper permissions.

Catherine Scanlin, the council’s licensing manager, told councillors that the objection, by Graham Muir, was due to a “breakdown in the relationship with the owner of the property” and that there “seems to be a history of flooding into another property”.

Mr Muir, who runs a laundry cafe below the flat, said that as many as 11 people stayed in the flat at any one time, despite having a capacity of just five.

It was also confirmed by building standards officers that en-suite showers had been installed in the flat “without permission” after a building warrant application was refused.

Mr Muir told the Edinburgh Evening News: “The shop has been flooded on a number of occasions. The ceiling caved in and it’s now propped up with scaffolding. It’s a complete disaster. There are people coming and going all the time, there are junkies that get in. He refuses to help – he’s just not bothered. He’s not a responsible person – it’s a ghost hostel.”

A ghost hostel or hotel is where an unsupervised property has each room let out individually without adhering to regulations required by law.

Mr Ali argued that Mr Muir “has had it in for me since day one” and insists on “sticking his nose into everybody else’s business except his own”.

Mr Ali did admit that he shouldn’t have carried out the work on his property without securing permission. He said: “Applications have been submitted. In hindsight I should have waited but because the workmen were in place, I carried on. Nothing is illegal, everything is above board. I offered to do his ceiling up and he said he didn’t want my ‘cowboys’ going in there.”

He added: “It’s not a hostel, it’s a HMO – it always has been. The current situation is that it’s let as an Airbnb holiday let. There have never been 11 people, not to my knowledge – and I manage the premises.”

The property currently has one permanent resident, while the remainder is let out as Airbnb-style short term lets.

Licensing officials told Mr Ali that he does not need any planning permission to operate as an Airbnb.

Source: Scottish Housing News