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Government to review selective licensing as it unveils new guidance for HMO properties

The Government has announced a review into selective licensing to assess how well it is working.

The review will seek evidence from local authorities and bodies representing landlords, tenants and housing professionals, with findings reported next year.

A Government statement said: “In areas where selective licensing applies, landlords must apply for a licence if they want to rent out a property. This means the council can check whether they are a ‘fit or proper person’ to be a landlord, as well as making other stipulations concerning management of the property and appropriate safety measures.

“The review will see independent commissioners gather evidence from local authorities and bodies representing landlords, tenants and housing professionals.

“The review’s findings will be reported in spring 2019. There will be an update on progress in autumn this year.”

It comes as the Government set out guidance for the extension of mandatory licensing of Houses in Multiple Occupation and the introduction of minimum room size requirements.

Local authorities have been told to start making landlords aware of the regulations – being introduced on October 1 – and existing licence holders will need to be given extra time to make their properties compliant when they come to renew their licence after deadline.

Currently, HMO landlords require a licence if letting properties that are three or more storeys and occupied by five or more people from at least two separate households.

From October 1, the licensing rules will be extended to HMO properties of all sizes, including two-storey houses and bungalows.

Government guidance published yesterday said: “Local housing authorities have a duty to effectively implement mandatory licensing in their district.

“This means that they must promote licensing in their area and accept and process applications before October 1st 2018.

“We expect local housing authorities to have the framework in place to process and issue licences in advance of this date and to encourage early applications from landlords who are due to become subject to mandatory licensing. Local housing authorities must also ensure that all applications for licences are determined within a reasonable time.”

The guidance also details rules on minimum bedroom size requirements for HMOs, with a fine of up to £30,000 for those who fail to comply.

The minimum sleeping room sizes are:

· 6.51 m2 for one person over ten years of age

· 10.22m2 for two persons over ten years of age

· 4.64 m2 for one child under the age of ten years.

Any area of the room in which the ceiling height is less than 1.5m cannot be counted towards the minimum room size, the Government said.

Local housing authorities are also required to impose conditions specifying the maximum number of people aged over and under ten who may occupy specified rooms provided in HMOs for sleeping accommodation.

Existing licence holders will have to comply with the new minimum room size requirements from when an existing licence is renewed after October 2018.

If a landlord is not compliant at the time of renewal a local authority must give them up to 18 months to make changes.

Commenting on the announcements, David Cox, chief executive of ARLA Propertymark, said: “Licencing doesn’t work, and it never has done. The Government’s aims are laudable; we’re all striving for the same end goal of improving the private rental sector for consumers, but these policies are impractical.

“Licensing means councils spend all their time administering schemes, rather than enforcing against rogue, criminal landlords – a fact which has been proven time and time again over the last decade. Implementing standards for minimum bedroom sizes means small, cheap bedrooms will be taken off the market at a time when there’s an acute housing shortage.

“This will increase costs for other tenants living in the property, and means those who need or want these small, cheap bedrooms will be left without anywhere to live.

“The announcement, coupled with the gradual removal of mortgage interest relief, new energy standards for landlords, and the ever-increasing fees for these schemes, means landlords are being hit from every side.

“At a time when the Government is concerned with rising rent costs, all its policies are just increasing costs for landlords, fostering a private rented sector where financial burdens due to ever-changing legislations will keep rising.”

Source: Property Industry Eye