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New charges for houses in multiple occupation in Coventry – what it means

Action to tackle irresponsible landlords has half-succeeded at Coventry council after one of two schemes was passed by councillors.

A city-wide ‘additional licensing’ scheme was approved at full council on Tuesday, January 14, but ward-specific ‘selective licensing’ came to a halt after it was voted down to allow for further investigations.

The new additional licensing policy will focus on houses in multiple occupation (HMO).

The scheme is likely to impact a number of student homes, which the council hopes to reduce through the introduction of more purpose-built student blocks.

Under additional licensing, a landlord who has been operating an unlicensed HMO could pay £1,250 for a one-year licence; £1,055 could be charged for a one-year licence if they are not listed as part of the council’s ‘proactive enforcement regime’; £705 for a two-year licence; £640 for a five-year licence; and £545 for a renewal.

Selective licensing would have been in certain wards, although councillors voted it down after citing an upcoming selective licensing review from the government and ‘out-of-date’ data from a 2011 census which was used to determine the areas the new scheme would fall into.

In consultation, landlords also claimed it added ‘unnecessary financial burden’ and could lead to increased costs being passed onto tenants.

Both schemes were planned to hold landlords to account and help set and maintain minimum standards across the city.

Combined the schemes would have introduced fees potentially worth thousands of pounds on landlords.

Around a dozen councillors were forced to leave the meeting and not take part in the vote as they are landlords themselves.

Cabinet member responsible Cllr Tariq Khan said the selective licensing scheme will be revisited once the government’s review has been published, while his deputy Cllr David Welsh welcomed the new additional licensing.

Cllr Welsh said: “This is probably one of the biggest steps this council has taken to improve the quality of housing in many years.

“Members will be aware what HMOs have done to the quality of housing across the city and the issues they have created.

“I look forward to working with the good landlords we have in the city and I’m very aware there’s many who do take responsibility for the properties they own and manage them well.

“But this scheme will tackle those who fail to do this, people who seek to invest in the city in terms of owning a property but don’t want to be responsible for the state of the properties and the behaviour of the tenants within.

“This scheme will give the council power to put conditions on the licence in terms of the quality of accommodation and others that we have not been able to do until now. That will make a big difference.”

Additional licensing requires all owners of HMOs that are occupied by three or four tenants and all converted self-contained flats that are wholly tenanted to apply to the council for a HMO licence.

Selective licensing would have required owners of rented properties in designated areas to apply and pay for a property licence and pass a ‘fit and proper person’ test.

Additional licensing will come into force on May 4 for a period of five years.

By Tom Davis

Source: Coventry Telegraph

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HMO conversions for 3 to 6 people will require planning approval from June 2020

A citywide direction on houses in multiple occupation (HMO) will be introduced by Birmingham City Council from 8 June 2020.

The Article 4 direction will mean that planning approval is required for the conversion of a family house to an HMO accommodating between three and six people. Current planning rules only require planning approval for properties larger than this.

The direction will be supported by a proposed new planning policy set out within the Development Management in Birmingham document, which is subject to a six-week public consultation period from 9 January 2020. The consultation will close at 5pm on Friday 21st February 2020.

An existing direction for this purpose is already in force in Selly Oak, Harborne and Edgbaston and has been successful in limiting the growth of HMOs in those areas.

Ahead of the direction coming into force, landlords are being advised to declare existing HMOs to the council. Any existing HMOs declared after that date are likely to require a retrospective planning application or a certificate of lawful use, both of which will incur a charge. New HMOs created after 8 June 2020 will require a planning application.

Councillor Sharon Thompson, Cabinet Member for Homes and Neighbourhoods, said: “Shared accommodation or houses in multiple occupation provide an important way of meeting the city’s housing needs. However, high concentrations of HMOs can have a negative impact on the character of neighbourhoods and create unbalanced communities.

“This direction will enable the council to manage the growth of HMOs across the city more effectively as any new proposals will be assessed in line with planning policies.”

Further information about the city-wide direction and the process for declaring existing HMOs can be found at www.birmingham.gov.uk/hmoarticle4

By Kyle Moore

Source: Birmingham Updates

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Armley Park Road HMO application withdrawn

An application to convert a four-bedroomed house in Armley Park Road into a six-bedroomed house of multiple occupation (HMO) has been withdrawn, writes Keely Bannister.

According to a notice issued by Leeds City Council, the application was withdrawn following an e-mail from Michael Sunderland from DMS Architecture Ltd, who is the development’s agent.

Details of the e-mail has not been made publicly available.

Mr Carpenter lodged the application with Leeds City Council in July, with the notice to withdraw being placed in December.

The proposed development would have involved the lowering of the properties basement floor and the conversion of this space from storage into a living room and en-suite bedroom.

The ground floor living room would also have been converted into a bedroom.

As reported previously in The Dispatch, objections were lodged against the application with other residents on the street stating that the property was being “kept in a state of disrepair” and that the road is “already packed full of cars” which “packing in more renting tenants” wouldn’t improve.

Consultation was sought from the Canal and River Trust, who had no comment to make and the council’s Highways Team, who had no objection to the application, subject to a number of conditions around cycle and bin storage being met.

Source: West Leeds Dispatch

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Bid to turn Wrexham town centre house into HMO refused over parking issues

A bid to create a house in multiple occupation (HMO) near Wrexham town centre has been thrown out because of fears it will added to parking issues.

Proposals to turn a three-bedroom house on Oxford Street, which is close to Eagles Meadow shopping centre, into five bedsits were originally submitted in October.

Objections were raised ahead of the application being considered by councillors on Monday as a result of the lack of parking spaces on the road.

Local councillor Adrienne Jeorrett said the situation had become so bad that one resident who lives on the street was forced to return their disability car.

Addressing Wrexham Council’s planning committee, she said: “Whilst I accept the need for low cost housing, it’s a great disappointment to me that in 2019 adults are having to live in one room with a long term impact on health and wellbeing.

“In Oxford Street and the surrounding roads parking is a major problem for residents. This proposed HMO will add to that problem.

“To say that Oxford Street is near town does not mean that residents work in town.

“It does not mean that someone does not need a car, especially if they work somewhere where public transport no longer reaches.

“One resident in this street has already had to send back a disability car because they couldn’t park in the street.”

The local authority’s chief planning officer had recommended the scheme should be given the go ahead.

In a report, Lawrence Isted disputed claims that it would make the parking situation worse as the property was located close to the town’s bus and railway stations.

But the council’s highways department backed refusal because of the “significant” demand for parking in the area.

Highway development control engineer Peter Douthwaite said: “We’ve looked at it and the proposal is deemed to be increasing the level of parking requirement in an area already suffering from parking problems.

“We think it should be refused due to lack of parking provision.”

Councillors unanimously voted to reject the proposals at the end of the debate.

By Liam Randall

Source: Wrexham

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Plans to increase capacity of HMO refused amid parking and litter concerns

Plans to increase the capacity of a house in multiple occupation (HMO) on the outskirts of Wrexham town centre have been rejected because of concerns over parking and litter.

An application was entered in May to increase the amount of residents able to live at a property on Beechley Road in Hightown from six to eight.

It came as owner Andrew Shield said he wanted to allow couples to live in two of the rooms to meet the demand for accommodation in the area.

The scheme was given the backing of Wrexham Council’s chief planning officer ahead of a meeting on Monday to decide the plans.

However, members of the local authority’s planning committee refused permission after being told about the lack of parking and issues with overspilling bins on the street, which is already home to several HMOs.

Speaking at Wrexham’s Guildhall, local councillor Graham Rogers said: “The proposed development would result in an over-concentration to the detriment of the social fabric of the area.

“Beechley Road currently has six HMOs within a 50-metre radius, and I consider the likelihood that the proposed suggestion to increase from six to eight occupants will result in an increase in parking demands.

“For those reasons I am requesting that the approval be refused for the proposed development, which does not make adequate provision for the parking of vehicles.

“The current HMO on Beechley Road carries an increase in the amount of refuse with bins being overused, resulting in litter over spilling onto the footpaths and carriageway. On most weekends I’m having to clear litter with the aid of the community payback team.”

Members of the Beechley Road Residents’ Association also wrote to planning committee members to highlight issues with noise from the HMO properties.

It came after they previously campaigned against a separate bedsit application on the same street.

The latest scheme was recommended for approval by the council’s chief planning officer, who said it was unlikely to lead to an increased demand for parking spaces.

In his report Lawrence Isted said: “I have considered the concerns of the residents in regard to parking and noise nuisance.

“With regard to parking, I appreciate that there are a significant number of vehicles that park on the carriageway with no provision for parking on site.

“Highways have no objections to the proposed development on the grounds that the proposed development is unlikely to result in parking demand compared with its current residential use.

“Noise nuisance can be addressed by public protection.”

Despite his recommendation, councillors chose to refuse permission because of the impact on parking with 15 votes against the plans and two abstentions.

By Liam Randall

Source: Wrexham

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Plans for shared house in Brighton attract opposition

Neighbours have the support of their area’s councillors in opposing plans for a shared house.

St Peter’s and North Laine councillors Pete West and Lizzie Deane sent a joint letter against plans to turn a four-bedroom house into a five-bedroom shared house or HMO (house in multiple occupation) in Crescent Road.

The plans are recommended for approval when they go before Brighton and Hove City Council’s Planning Committee next week.

In their 25 letters of objection, neighbours raised concerns about the number of shared houses in the Roundhill area, as well as noise from the roof terrace and the loss of a family home.

Crescent Road is in an area where limits are placed on new HMOs.

No more than 10 per cent of homes within a 50-metre radius of any proposed HMO should already be a shared house.

Calculations by the council show that there are 84 properties within 50 metres and seven of these are shared houses, under the limit.

One anonymous neighbour’s objection said: “The property is in a conservation area and adding more residents and a roof terrace would detract from the character of the area, which is one of single dwelling houses. The conversion to HMO does nothing to enhance the conservation area.

“Many family homes in Brighton have been lost to similar HMO conversion, and this would reduce the supply of much-needed family homes.”

Another objection said: “Crescent Road is already oversubscribed with HMOs.

“The proposed roof terrace is inappropriate and not in keeping with the conservation area. It also constitutes a noise nuisance to the neighbours and surrounding area.”

Councillor West wrote: “The HMO density in Crescent Road is already approaching saturation and this HMO cannot therefore be permitted.

“I note it has been pointed out that not all existing HMOs in Crescent Road have been recognised on the map.

“Questions have also been raised over the adequacy of provision for refuse storage and impact on parking and traffic in the area.

“I believe this proposal will adversely affect the Conservation Area, have a detrimental effect on property value, impact residential amenity by increasing noise (and) represent overdevelopment.”

The Roundhill Society also objected, saying: “Numbers 26 (and) 28a Crescent Road already are operating as HMOs.

“If 22 Crescent Road is allowed, then the family living in 24 Crescent Road will be ‘sandwiched’ within a row of HMOs with all the noise and negative impact on family life (that) a large student occupied house would have.

“This would be entirely inappropriate. The density of HMOs in this area is already excessive.”

The Planning Committee is due to meet next Wednesday (6 November) at Hove Town Hall. The meeting is scheduled to start at 2pm and should be open to the public.

By Sarah Booker-Lewis

Source: Brighton And Hove News

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Five reasons to consider including an HMO property in a portfolio

It’s hard to think of a time when landlords have faced such an uncertain playing field as today.

A raft of regulation and taxation changes have had a significant impact on bottom lines, whilst the market has slowed as we wait and see what the impact of Brexit will be.

Unsurprisingly then, landlords have been looking for alternative ways to increase yields as well as diversify their portfolio to minimise any potential risk.

For many, HMOs have been one such way.

The number of landlords who have gone down this route already speaks for itself: the BVA BDRC’s latest survey shows that one in five landlords now have an HMO property in their portfolio.

Knowing this, it’s highly likely that brokers will be facing an increase in enquiries from landlords considering diversifying into HMOs and wanting to know the considerations to factor in.

Higher yields

The well-publicised advantage of HMOs is that rental yields are often higher than for a typical rental property.

The same BVA BDRC research suggests the average yield for an HMO is one-fifth higher.

For example, a landlord taking in nearly £12,800 in rent each year for an HMO, compared to £10,750 for a standard property.

Before we get carried away, we should remember that costs are also likely to be higher than a standard rental property.

An HMO license can range considerably from under £100 to over £1,000 depending on the property location.

Work may be needed on the property to ensure that it is compliant with regulation.

This could involve ensuring bedrooms are a minimum size, providing the right number and location of bathrooms or even extending the kitchen worktop.

Day to day, the potential higher turnover of tenants and more intensive use also means higher costs in terms of maintenance.

It’s important to do your sums but if costs can be kept reasonably low, yields can still be good.

Rental voids have less impact

Letting each room individually, inevitably involves more work at the start due to vetting each individual tenant when they move in but careful investigation at the start will pay off when it comes to them moving out.

When a tenant moves out of a single let property, there’s a total loss of income but with a multi-let property, the remaining rooms remain tenanted therefore limiting total impact.

Less exposure to arrears

The same ‘eggs in multiple baskets’ logic applies to arrears. Having several sources of income – with tenants paying smaller monthly rents for a room within a property – a landlord is less exposed if a tenant falls behind on their rent.

In the current economic climate, with fears of a downturn post-Brexit and potential job losses being bandied around, this potential benefit might sit well with some landlords.

Tax advantages

One difference between HMOs and single-let properties is the potential to claim income tax relief on qualifying items.

This applies to the costs associated within the communal areas, which are treated as an expense of the rental business.

Normal rental losses are only rolled forward for offset against future rental properties.

However, capital allowances can be offset against non-property income to generate tax rebates, which could add up to a significant amount.

However it’s important not to advise on any tax related questions yourself, always point your clients towards a professional tax adviser.

There is a need for flexible, affordable housing

Keeping costs affordable for your target audience is particularly important as you want to try and attract long term tenants rather than a series of short-term lets.

Renting is popular with students, young professionals, mobile workers and single people so keep this mind.

The private rented sector as a whole has doubled since 2000, and now accounts for one fifth of all homes in Great Britain.

With the rising cost of living, particularly in cities, combined with population growth and a shortage of affordable housing, HMOs or “house shares” could help to fix the problems we face in the housing market.

HMOs offer a far cheaper alternative to renting an entire property by enabling tenants to split household bills, while allowing them the privacy of their own bedroom.

In this shifting market, brokers’ advice is likely to be valued even more by landlords. This area of the market requires brokers to stay one step ahead, always on the lookout for any regulatory changes and trends.

By Adrian Moloney

Source: Mortgage Introducer

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Objections To Turn Former Scarborough Care Home Into HMO

A proposal to turn a former care home in Scarborough into a House of Multiple Occupancy (HMO) has provoked reaction from local residents.

More than 70 people have objected to plans from Artz Ltd to convert Harewood House at 47 West Street into a property to house up to 30 people.

The objectors are concerned about the number of HMOs in the area and also about the increase in parking and traffic it could bring.

Fantasia Leisure Ltd, which would manage the HMO if it were to be granted permission, says in its supporting information that overseas workers would be housed in the building.

It adds:

“Fantasia currently is inundated with inquiries for working people from overseas looking for accommodation in Scarborough.”

The company added that it had recently been asked if it could find accommodation for 200 workers in the area.

A number of the objectors, in their letters to the council, bring up the case of the Breece, a former hotel in West Street that later became an HMO.

In 2014 a court ordered the closure of the Breece following more than 50 anti-social behavior complaints and allegations of stabbings and rape at the premises.

One objector wrote:

“The Breece was a sizeable HMO and subsequent amendments were made to the relevant section of the Local Plan to provide powers to restrict the size of HMOs and control their location to avoid ‘clustering’.

It was deemed appropriate that the maximum number [of occupants] should be 10. The proposed number of occupants for Harewood House greatly exceeds this number.

Furthermore, such a development would greatly increase the number of HMO buildings and occupants in this area. The proposed site is close to three existing HMOs, the largest of which has made an application to significantly increase its numbers.”

Scarborough Civic Society has also objected to the plans, saying that, if granted, the number of tenants in HMOs in the area would double. It adds that it would also detract from the character of the Conservation Area.

The Harewood House care home closed in 2017 and despite two auctions being held no buyer has yet been found to take over the property.

By Carl Gavaghan

Source: Yorkshire Coast Radio

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Huge number of HMOs have no licence and are illegal, says new research

There is a non-compliance rate of 75% in unlicensed HMOs in London.

Research conducted by the private consultancy London Property Licensing for trade body safeagent – formerly NALS – has found over 130,000 unlicensed properties which should be licensed under mandatory, selective or licensing schemes.

The research, carried out through Freedom of Information requests, found there are over 310,000 private rented properties in London that require licensing.

However, non-compliance in the capital is rife.

Licence applications have been submitted for only 25% of the 138,500 private rented properties that require licensing.

Without a licence application submitted, these properties are being operated illegally and landlords and/or agents can face prosecution or a civil penalty of up to £30,000.

The landlord can also be ordered to repay up to 12 months rent.

Since October 2018, the mandatory HMO licensing scheme has applied to most HMOs shared by five or more people whereas it was previously restricted to properties three or more storeys in height.

In some boroughs, additional licensing schemes have extended licensing to properties rented to just three or four unrelated people.

The picture for selective licensing is markedly different, according to the research.

These schemes extend licensing to all private rented properties including single family lets within a certain geographical area.

Licence applications have been submitted for 85% of the 173,000 private rented properties that require licensing under selective licensing schemes in London– a non-compliance rate of 15%.

Added to the confusion over licensable properties, many London boroughs are struggling to process over 24,000 licence applications.

Currently, about 40% of boroughs still rely on paper applications.

Safeagent is calling for a simpler, more streamlined licensing process.

Safeagent CEO Isobel Thomson said: “The results of the survey are concerning.

“Consumers are not being well served and indeed many are being placed at risk through this mish-mash of licensing schemes.

“Right now, the system isn’t fit for purpose and councils are drowning in paperwork.

“Landlords needing property licences are either deliberately evading the schemes or are in the dark concerning their legal responsibilities, and tenants are being placed at risk.

“If the compliance rate for HMO licensing schemes is only 25%, how can these schemes be effective?

“Isn’t it time we went back to the drawing board to come up with a simple, streamlined system that works for all?”

By ROSALIND RENSHAW

Source: Property Industry Eye

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Tenants in flat-shares lose their living rooms as landlords make the most of space

Tenants in shared houses are facing the end of the sitting room for Generation Rent, as landlords increasingly convert every possible space into bedrooms.

According to The Times, analysis of room rentals on house and flat sharing portals found that just one third of properties have communal space.

In London, only one-tenth of flat-shares have communal space such as a lounge.

The Times says that even upmarket properties in exclusive postcodes are being turned into bedsits, with landlords turning reception rooms into bedrooms.

The Times also says that some conversions result in tiny bedrooms, and that some conversions ignore Building Regulations and are potentially unsafe.

It also says that illegal bedsits are being advertised with impunity online, including on one property website that has received taxpayer funding to help it grow.

The Times also says that some bedsits are in HMO properties which should be licensed, but are not, pointing out that licensing is mandatory for rental properties with five or more unrelated sharers.

The paper analysed 100 rooms offered in five-bedroom properties on the most popular house-share website and found that only 12% were registered as approved HMOs.

Susie Crolla, of the Guild of Letting & Management, described the figures as “shocking but not that surprising”.

The Times says that the biggest website, Spareroom, does not routinely check whether its rooms are legally compliant or are in a property with an HMO licence.

However Spareroom told the paper that checking every property is not straightforward because there is no central database and each council holds the information differently.

The Times investigation also highlights Spotahome, whose chief operating officer is a founder of Uber.

The Times says: “The website does not allow prospective tenants to view rooms, instead posting pictures and videos online. Nor does it check whether homes have a licence.

“In one case, it was listing a 49 sq m, two-bed flat that had been converted into a five-bed. Every bedroom was smaller than the minimum allowed. One was 4.92 sq m, little bigger than a double bed. The illegal conversion had been visited and ‘approved’ by a Spotahome checker.

“In 2015, the taxpayer-backed British Business Bank invested £17.5m in a venture capital fund called Passion Capital, which used part of the money to invest in Spotahome.com.”

The Times also quotes an un-named traditional letting agent who said he had reported half a dozen unlicensed HMOs to several councils six months ago but had heard nothing back.

He said: “These homes are not difficult to spot, they are brazenly advertised online. The failure of councils to enforce the rules is allowing these landlords to get away with it and is making the job of diligent agents much harder.”

By ROSALIND RENSHAW

Source: Property Industry Eye