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HMO licensing fees reviewed in preparation for changes in government legislation

Licensing fees paid by landlords who operate houses in multiple occupation in Cheshire East have been revised, to help ensure better living conditions and management standards.

Previously, the fee for a house in multiple occupation ( HMO ) licence in Cheshire East was set at £575 for a period of up to five years – regardless of how big the HMO was.

That charge has now been replaced by a scale of fees and charges, ranging from £430 for an initial licence for the smaller HMOsHMO , through to £760 for a renewal licence for up to five years for the largest.

The revised fees are in preparation for changes in government legislation which will come into effect in October 2018 and allow councils to bring HMOs under closer scrutiny.

At the moment, a HMO must be licensed if there are five or more occupants – living in two or more separate households – who are sharing amenities including a kitchen, bathroom or toilet and the property is set out over three or more storeys.

But from 1 October, the three-storey part of the criteria will be removed.

From the same date, councils will also be able to enforce mandatory conditions regulating the size and use of rooms as sleeping accommodation, as well as rules around waste management.

Operating without a licence is a criminal offence and the penalties include an unlimited fine. Other enforcement action for licensing offences includes banning landlords from operating and issuing civil penalties of up to £30,000.

Councillor Ainsley Arnold, Cheshire East Council cabinet member for housing, planning and regeneration, said: “Poor housing can impact on a person’s mental and physical health and mandatory licensing will be key in ensuring that landlords provide good quality, safe accommodation that is well managed.

“In Cheshire East, there are an estimated 600-650 HMOs and 51 meet the current definition for a mandatory licence. However, from October, it’s estimated that around 500 will require one.

“To make sure we can respond to the significant increase in HMOs needing a licence and safeguard those living in them, we have strengthened our resources and created additional posts.

“The licence fees and charges have also been reviewed to ensure that the full cost of processing an application, which varies according to the size of the HMO , is passed to the landlord as a valid cost of operating their business.”

As part of the changes, an initial one-year licence period has been put in place where a licence is required for a property or proposed landlord for the first time.

However, as an incentive to landlords and to support the council in managing the transition to the new regulations smoothly, those who submit a complete application by 15 August can receive an initial two-year licence.

Cllr Arnold said: “Unfortunately there are a minority of irresponsible landlords who are providing unsafe and poorly managed accommodation that falls well short of the standards we expect in Cheshire East.

“By putting in place a shorter initial licence period, it will give the council greater control and improved engagement with landlords to help ensure residents are safeguarded and that other issues such as waste management can be correctly addressed.”

Source: Cheshire East

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Goodbye HMOs, hello Flats?

There has been a trend for some time now for converting HMOs back in to single-let properties. Why?

Well, many landlords report that the HMO market in some cities and towns is completely saturated – and they are absolutely right.

For a long time now I have advised people to be very careful when acquiring or developing a HMO. It must be in the right area, there must be a constant demand, and the rental price of a room must be significantly higher than the rental price of a one bed flat.

If not, be warned that you may find yourself with a very difficult under-performing property investment. Add to this the increased regulation in the HMO market and hopefully you can see why investing in HMO’s could have had its day… Certainly outside of its traditional demand areas.

The HMO market has developed rapidly in the past decade and has served a market demand, but rest assured it is now under attack.

For evidence let’s just look at the student market. The institutional investor has entered the student market on a large scale, creating high spec purpose built blocks of rooms, supported by universities and preferred by parents – especially the parents of oversees students.

Consequently, the private landlord letting to students has found their market disrupted massively. In Hull and York this has led to an oversupply of nearly 300 student properties in each area, in turn to many landlords turning their properties back to standard residential lets.

Others have had no choice but to compete in the much more competitive ‘professional’ HMO market, targeting regular workers. This is creating on over-supply in this market too, driving down room rates. And when the room rates hit the same level as a one-bed flat rate… then suddenly tenants start to reconsider their position and letting preferences.

My view on this is relatively simple. HMO’s have their place in big cities, student areas and areas where there is an abundant supply of low income workers (look out for large distribution sheds and companies such as Amazon). When investing you need to choose your location wisely – and check for signs of saturation in the market. Look for Article 4s, get information from the council on multi-lets, and scour spare room and rent a room portals for the number of ads from an area, take-up and turnover of rooms.

For the savvy investor, though, this does represent an opportunity.

If you can identify areas with saturated HMO markets, then you can be certain that the demand for one-bed flats or studios will be there – and will be growing.

It’s worth looking at those areas and consider converting any existing HMOs into studio flats, or acquiring properties to develop into flats to serve the new market.

Source: Simple Landlords Insurance

Portsmouth
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Portsmouth HMO Investors To Be Fined For Rubbish Failures

House in multiple occupation (HMO) landlords could face fines of up to £5,000 if they fail to put out their rubbish correctly in Portsmouth.

Portsmouth City Council has decided that landlords will be fined for failing to put out rubbish correctly. The move was approved in a meeting this week and will affect any landlord who manages a HMO. The fines will be increased by more than 8,000 per cent from the previous cost of £80.

If residents are found to be leaving waste in their front gardens, streets or neighbour’s front gardens landlords and tenants will be penalised.

The council’s housing boss, Councillor Darren Sanders, said: ‘We do not have the cleanest streets in the country. They are good but they are not the cleanest. We have to use every power we can to make it cleaner. This is one way in which we can do this. It’s clear from the residents’ complaints that something needs to be done. £60 is not a deterrent. We have to send the message that we are serious.’

However, local landlords do not agree with the new strategy.

Speaking at the meeting Southsea-based landlord and letting agent, Alwin Oliver, said: ‘I think we both agree on what we want. For many students waste management is pretty low on their list of priorities. I think the city council is not nearly clear enough to tenants about what is appropriate and what is required. What is needed is a really clear message on the website. Removal of the waste isn’t the issue, it’s who pays to get rid of it. It’s not always the landlord’s fault. If we put rules about waste removal on the tenancy agreement I think we’ve done enough. And just to say the issue we get most often is end-of-tenancy waste.’

Source: Residential Landlord

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Landlord fined over £20,000 for not licensing HMO with fire hazards in Bath

A Bath landlord has been fined £24,000 after failing to licence and manage a House in Multiple Occupation, which council investigators found to be in poor condition and had fire hazards.

Allan Green, of Credenhill Road, London, was charged with failing to licence a House in Multiple Occupation (HMO), failing to comply with regulations related to the management of the HMO and failing to respond to a formal request for information.

Green was found guilty of all six offences by Bath Magistrates when the case was heard on 30th May.

He was fined £24,000, £4000 for each of the six offences, ordered to pay the prosecution costs of £1,860 and the victim surcharge of £170.

The court heard that Bath & North East Somerset Council started investigations following a complaint from a resident about the property.

Officers found the property should have been licensed as an HMO because it is within the council’s Additional Licensing area and was occupied by three unrelated tenants who were sharing one or more amenity.

The court heard that officers found the house to be in a poor condition with a number of fire hazards, particularly related to the means of escape from the building.

Green was asked to supply to the council the latest gas and electrical test certificates but failed to do so and contact details for the HMO manager were not displayed in a prominent position within the property.

The court heard the defendant also failed to co-operate with the council or respond to a formal request for information.

Council officers served schedules of works on Green but he failed to complete any of the remedial work and did not apply for an HMO licence.

Councillor Paul Myers, (Conservative Midsomer Norton Redfield) Cabinet Member for Economic and Community Regeneration, said: “Our Housing Service always works in partnership with landlords to improve housing standards wherever possible.

“Additional licensing helps to ensure that occupants of HMOs are able to live in safe and well-managed properties.

“Where landlords fail to licence their properties such as the case here, they are undermining the objectives of the Additional Licensing Scheme and are putting the safety of their tenants at risk.

“This case shows our message is clear – landlords and letting agents operating outside the law will not be tolerated by Bath & North East Somerset Council.”

For more information on the legal requirements for Houses in Multiple Occupation, visit: www.bathnes.gov.uk/hmos or contact the Housing Standard and Improvement team on 01225 39644.

People can also report an unlicensed HMO here by visiting: www.bathnes.gov.uk/reportunlicensedhmo

Source: Bath Echo

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Refinancing buy to let mortgages likely as HMO changes near

A buy to let mortgage firm says it’s likely that there will be a spike in refinancing enquiries as landlords meet a new deadline for HMOs.

A raft of changes come into effect in October, including:

– Introduction of minimum room sizes: rooms used for sleeping by one adult must be a minimum of 6.51 square metres; bedrooms shared by two adults must be at least 10.22 square metres;

– Bedrooms occupied by children of 10 years or younger must be at least 4.64 square metres;

– Local authorities have the discretion to increase minimum room sizes if they wish.

In addition:

– HMOs occupied by five or more people, must have an appropriate mandatory licence, regardless of how many storeys the property covers;

– Purpose-built flats with up to two flats in the block, require mandatory HMO licensing;

– Landlords must obtain a mandatory license if the property is occupied by persons living in two or more separate households.

Penalties for running an unlicensed HMO or for failing to meet the required licensing standards, set by the relevant local authority, could see landlords face unlimited fines.

But the implications of failing to meet local authority licensing standards on an HMO property could impact future funding claims Andrew Turner, chief executive at Commercial Trust Limited.

“More landlords will be required to bring their HMO properties up to local authority licensing standards. In scenarios where perhaps one bedroom in the property fails to meet minimum licensing standards, there could be future implications, if the landlord wants to remortgage the property.

“Investors looking to remortgage may find that a lender will only base rental stress calculations on rental income from the bedrooms that do meet local licensing rules. That could make obtaining the required level of financing a lot tougher.”

Source: Letting Agent Today

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“Over concentration of HMOs within the immediate locality” sees plans for former office space refused

Plans to convert “dilapidated” and “eyesore” office space in Wrexham into a HMO have been refused.

The application for Unit C on Maesgwyn Road had been submitted to Wrexham Council in April 2018.

Previously the offices were home to the Wrexham tram depot before being used as a bus depot. In recent years it has been used as a garage and repair shop. However they have since been vacant for a number of years and have been subject to vandalism

Under the plans put forward to Wrexham Council it had been proposed the office space was converted into a six bedroomed House of Multiple Occupancy (HMO).

In the initial application documents, the applicants stated: “We feel this planning application should be looked favourably upon as the intention to provide additional accommodation within the town centre ideally suited to young professional’s seeking work or employment in the area.

“The building is prominent to existing dwellings and is currently in a dilapidated state where vandals have targeted windows and walls within the building.

“At present the building is an eyesore to local residents, by allowing this conversion to take place the building will be revamped and be a secure building ensuring vandalism won’t occur.

“By allowing us to convert the existing offices to provide a HMO we are retaining the existing characteristics of the building, reducing its impact on the current parking arrangements and ensuring parking issues aren’t magnified should the unit be refurbished as an office.”

However a delegated decision made by the council’s head of environment and planning has seen the application refused due to an “increase in the over concentration of HMOs” in the area.

A decision notice published by the head of environment and planning states: “The proposed development would increase the over concentration of HMOs within the immediate locality to the detriment of the social fabric of the area and the amenity of the existing residents.

“Adequate onsite private open space is not provided which would be to the detriment of the future occupiers of the development and to allow the development would be contrary to Policy H4 c) and d) of the adopted Wrexham Unitary Development Plan and Local Planning Guidance Note No. 5 “Houses in Multiple Occupation”.

Source: Wrexham

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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

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HMO licensing guidance for local authorities – and landlords

The Ministry of Housing, Communities & Local Government has today issued the document “Houses in multiple occupation and residential property licensing reform: guidance for local housing authorities.”
The guidance has been produced for local housing authorities, but is also intended to be of use for landlords.

Click Here to read the full document.

From 1 October 2018 any landlord who lets a property to five or more people from two or more separate households must be licensed by their local housing authority

This document has been prepared as a guide for local housing authorities to help them understand how to implement the reforms to houses in multiple occupation (HMO)licensing.

Under the Housing Act 2004, larger that are 3 or more storeys and occupied by 5 or more persons forming at least 2 separate households are required to be licensed.

With effect from 1 October 2018 mandatory licensing of will be extended so that smaller properties used as in England which house 5 people or more in 2 or more separate households will in many cases require a licence.

New mandatory conditions to be included in licences have also been introduced, prescribing national minimum sizes for rooms used as sleeping accommodation and requiring landlords to adhere to council refuse schemes.

Housing minister, Heather Wheeler MP, said: “Everyone deserves a decent and safe place to live.

“Today’s new guidance for landlords will further protect private renters against bad and overcrowded conditions and poor management practice.”

Source: Property118

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City Council seeks views on proposed new landlord licensing scheme

Consultation on a new licensing scheme for landlords renting out shared houses is running until 20 July 2018 and the City Council is urging residents, tenants, landlords and letting agents to have their say on the proposals.

An Additional Licensing for Houses in Multiple Occupation (HMOs) was introduced in parts of Nottingham in 2014 to help ensure safe and decent standards in these homes and contribute to raising the standards of private rented homes in the city overall.

The current five-year scheme will soon end, so the council is consulting on proposals for a new scheme, which would run for a further five years from January 2019.

Additional Licensing is a scheme that applies to privately rented Houses in Multiple Occupation (HMO) or shared houses. All kinds of people live in HMOs, but they are mostly associated with students and younger people.

The scheme requires a licence to be held for smaller HMO properties in certain areas of the city where between three and five people who aren’t related live together and share facilities like bathrooms and kitchens. Larger HMO properties shared by five or more people will be covered by a different scheme – Mandatory licensing, which is a national scheme, covering the whole city. Landlords are required to apply for a licence, which can last up to five years, for each HMO property they rent out in the area covered by the scheme.

The new Additional Licensing scheme is proposed to cover all or parts of the following wards: Arboretum, Berridge, Bridge, Dales, Dunkirk and Lenton, Mapperley, Radford and Park, Sherwood, St Ann’s and Wollaton East and Lenton Abbey.

The current licensing scheme has had a positive impact on problems associated with HMOs since its introduction in 2014, such as gas, electric and fire safety, overcrowding and insufficient facilities, poor internal and external property conditions as well as issues of noise nuisance and waste management.

Over half of the HMOs that applied to the scheme since 2014 did not meet the required standards at first inspection. However, the council has worked with landlords to improve the conditions and management of their properties with almost 3,500 certificates being issued for compliance with the required standards to date. This, along with the scheme still receiving 25 applications a month in its fifth year, shows that the scheme is effective but there is still work to be done to fully engage landlords and maintain improvements.

Councillor Jane Urquhart, the City Council’s Portfolio Holder for Planning and Housing said: “This scheme, along with others, is a major part of our plans to improve all types of private rented housing in the city.

“Not only does the scheme help to improve poorer standards of accommodation, it means tenants know what is expected of their landlord in terms of the management of their home. It also helps us to tackle rogue and bad landlords by providing a clear set of guidelines which all landlords need to meet,and helps prevent bad landlords cutting corners or ‘undercutting’ good ones, creating a level playing field for all.

“We are encouraging landlords, managing agents, residents and tenants to have their say on these proposals to help us shape the new scheme.”

A consultation on the new scheme began on 1 May 2018 and is running until 20 July 2018. To find out more information and have your say on the current proposals visit: http://www.nottinghamcity.gov.uk/additionalhmo.

Source: West Bridgford Wire

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Firms on HMO register named after Freedom of Information challenge

FIRMS and organisations responsible for hundreds of multiple-occupancy homes across Northern Ireland have been named for the first time after a year-long Freedom of Information challenge.

For more than a decade the Housing Executive (NIHE) has maintained a list of the properties in the north registered as Houses of Multiple Occupancy (HMO).

The published HMO register lists information including the addresses of the properties, but does not show who is in charge of them.

However, NIHE has now disclosed the more than 200 public organisations in charge of HMOs – naming them in respect of each property.

It reveals firms and organisations control almost a quarter of all HMOs in Northern Ireland.

HMOs are generally properties let to three or more people from two or more different families.

Of the 5,790 HMOs registered in the north, companies and organisations are responsible for 1,341 which represents almost 11,000 permitted occupants.

Choice Housing has the most HMOs with 202 properties holding 1,402 people, followed by JHT UUJ Ltd with 118 properties covering 590 occupants, and Queen’s University Belfast with 111 properties and 2,100 occupants.

The details were disclosed to The Irish News following a complaint in June last year to the Information Commissioner’s Office (ICO).

NIHE had refused to disclose details in relation to all properties on the HMO register.

However, following discussions with the ICO, the housing body agreed to release information on HMOs run by firms and organisations and withhold details of HMOs run by individuals.

Nicola McCrudden, director of the Chartered Institute of Housing (CIH), welcomed the publication of the list.

“HMOs are generally a more affordable housing option for a variety of groups including students and migrant workers. They also tend to house some of the most vulnerable in society with multiple needs beyond housing,” she said.

“Due to the shared nature of this housing, HMOs are considered to be higher risk and regulation is necessary to ensure residents’ homes are safe.”

Ms McCrudden said they “welcome this transparency” for firms, but said extending it to individual landlords remains divisive.

She said social housing landlords are regulated and their names are publicly available, and “given that the private rented sector is now larger there is a clear argument that transparency should be extended”.

But she added: “Making individual landlords’ contact details publicly available is a contentious issue.

“We recognise the safety concerns expressed by some landlords, particularly those with larger portfolios.

“However, this must be balanced against the needs of tenants who may not have their landlords’ contact details.

“The HMO Act 2016 is yet to be implemented due to no Executive in place, but is intended as an update on the management and regulation of HMOs including mandatory licensing – whether or not ownership details will appear public register remains unclear.”

———–

:: The 15 firms and organisations in charge of the most HMOs in Northern Ireland

Company – Number of properties – Number of permitted occupants

1. Choice Housing Ireland Ltd – 202 – 1,402

2. JHT UUJ Ltd – 118 – 590

3. Queen’s University Belfast – 111 – 2,100

4. University Partnership Programme – 65 – 412

5. University of Ulster – 60 – 402

6. SOBE Developments Ltd – 52 – 231

7. Triangle Housing Association Ltd – 43 – 214

8. Lanyon Jersey Propco Ltd – 42 – 322

9. Silverline Developments Ltd – 40 – 164

10. Croob Properties Ltd – 30 – 282

11. Apex Housing Association Ltd – 29 – 517

12. Radius Housing Ltd – 26 – 376

13. Nexus Property Services, Rentals and Management – 18 – 93

14. Craigowen Housing Association Ltd – 17 – 177

15. Oakdene Properties Limited – 17 – 90

Source: Irish News