HMO Regulations Archives

Marketing May 11, 2018 No Comments

Government urged to hold parliamentary debate on minimum room sizes

Letting agent groups are warning that the private rental sector is set to lose vital stock as the Government presses ahead with plans for minimum room sizes for Houses in Multiple Occupation.

The National Approved Lettings Scheme (NALS) and ARLA Propertymark have both said they understand the changes but have questioned whether they should go ahead.

HMO landlord Dhugal Clark has launched a petition calling for a parliamentary debate on minimum bedroom sizes that are set to be introduced in October through the the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018.

He warns that the changes – which sets a minimum bedroom size requirement at 6.51 square metres for a person aged ten years or over – will reduce the number of rooms available for tenants and mean those living in bigger properties will end up paying more council tax as well as higher rents.

David Cox, chief executive of ARLA Propertymark, said the proposals had been consulted on since 2016 and warned it was too late for a parliamentary debate but said the trade body has written to the previous housing ministers to question these changes.

He told EYE: “We have made verbal and written representations with the Government.

“We understand where the Government is coming from. They want everybody to live in good quality accommodation but a lot of older properties have boxrooms.

“There are always people willing to have a smaller room to save money on rent, this is going to take away those rooms and means the costs are shared by fewer people.

“People happy to live in a box room have to pay increased rent to live in a bigger room.

“Why does the Government feel it knows better than an individual making an informed decision based on the size of a room?”

Isobel Thomson, chief executive of NALS, added: “NALS would like to see more parliamentary debate over minimum room sizes in HMOs.

“While we understand Government’s aim is to improve some specific types of HMO accommodation in the sector, it’s important that common sense prevails. As it stands, the proposed changes will remove councils’ discretion to assess a property on its own merits, as they can now.

“This means we’ll lose much-needed accommodation from the PRS in what are otherwise decent and safe properties.”

Source: Property Industry Eye

Marketing May 3, 2018 No Comments

Make the most of HMO regulation changes

Regulatory changes have been a consistent characteristic of the buy-to-let market in recent years and 2018 is proving to be no different.

At the beginning of April, new minimum energy efficiency standards were introduced for privately rented property and the government is extending the scope of licensing for HMOs this October.

At present, a mandatory licence is required for properties with three or more storeys that are occupied by five or more people from two or more households. From 1st October, a licence will be needed for HMOs occupied by five or more people from two or more households, regardless of the number of storeys. The Residential Landlords Association claims this change means that an additional 177,000 HMOs will become subject to mandatory licencing, and there is no limit to the potential fine for renting out a qualifying HMO without a licence.

Licences are issued by the local council and valid for a maximum of five years. Landlords of licensed HMOs must make sure the house is suitable for the number of occupants and that the manager of the property – which could be the owner or an agent – is considered to be ‘fit and proper’. This excludes people with a criminal record or a previous breach of landlord laws or code of practice.

Owners must also send the council an updated gas safety certificate every year, install and maintain smoke alarms and provide safety certificates for all electrical appliances when requested, as well as any other conditions imposed by the local council.

In addition to these requirements, the government has also proposed a minimum room size for bedrooms in licensed HMOs. At the moment, some local authorities prescribe minimum room sizes, while others set out advisory standards, and this new approach will dispel confusion with a standard approach to all licensed HMOs.

Landlords must ensure the following:

• single bedroom to be used by one person over 10 years should not be less than 6.51m2
• double bedroom to be used by two people over 10 years should not be less than 10.22m2
• single bedroom to be used by one person under 10 years should not be less than 4.64m2.

Where there is a breach to these minimum bedroom sizes, local authorities may grant a period to rectify the situation, although this will not exceed 18 months.

So, there is plenty to think about for owners of HMOs in the coming months, and this provides you with a great opportunity to revisit your database of HMO clients to make them aware of the upcoming changes and their responsibilities.

Some may need to fund renovations to ensure they meet minimum standards and room dimensions and, even if no renovations are needed, this change in regulation provides you with a chance to make contact and discuss their other funding requirements.

Marketing April 30, 2018 No Comments

Massive extension to HMO licensing comes into force

CHANGES to Government rules mean a huge expansion in the number of HMOs requiring licences. Until this month an HMO (house in multiple occupation) only required a licence if it had three storeys and was occupied by five or more people, in two or more separate households while sharing kitchens/bathrooms.

The new regulations remove the three storey requirement, and Bournemouth council estimates it will have to license an additional 2,500 properties out of an estimated 3,000 previously unlicensable properties across the borough.

A report from the council’s private sector housing team to the communities scrutiny committee states that “2018/19 promises to be another exceptionally busy year”.

“The following key projects and service developments will be delivered,” the report says.

“The Extension to Mandatory HMO Licensing which could mean that the number of licensed HMOs will increase to approximately 2,500.

“The Housing and Planning Act has come into force which will bring further significant changes to our enforcement powers with Banning Orders for rogue landlords.”

Until April, council figures show there were 601 licensable HMOs across Bournemouth and Poole, of which 529 were in Bournemouth.

Bournemouth estimated there were 3,000 non-licensable HMOs in the borough, however in the past officers have often stated that it can be difficult to keep track of unlicensed properties.

Of these, 1,800 were believed to house students.

The new regulations bring in mandatory conditions relating to minimum sleeping room sizes, maximum number of occupants and provision of refuse facilities.

Licenses last for five years.

The private sector housing team, which among its duties is charged with ensuring landlords maintain their properties in good condition, dealt with some 2,600 service requests over the past financial year, according to its annual report.

There were 786 complaints relating to such issues as damp, lack of heating, lack of fire safety and overcrowding.

The team also lodged 11 prosecutions, and by the end of the year had three successes, through which some £2,300 was collected in fines and costs.

Also, the borough’s team has carried out an inspection of the nine mobile home parks in the area to ensure compliance with licence conditions. Together these parks house some 500 mostly elderly people.

One site, which is not identified, was prosecuted for non-compliance and the council collected £850 in fines and costs.

Source: Bournemouth Echo

Marketing April 1, 2018 No Comments

What do the new HMO regulations mean for landlords?

Last year the UK government announced plans to review regulations surrounding Houses in Multiple Occupation (HMO) although this was delayed by the snap general election. However, on 23 February 2018 the government announced details of changes to HMO regulations which will come into effect on 1 October 2018. While many of the changes are subtle they will force many landlords to apply for HMO licences and potentially fund changes to their properties.

SUMMARY OF HMO REGULATORY CHANGES

As of 1 October 2018 the following changes to HMO regulations will apply:

Definition of an HMO property

At this moment in time an HMO property is defined as one which is occupied by five or more people, forming two or more separate households and comprises of three or more stories. The new definition is much simpler and any property occupied by five or more people forming two or more separate households will require an HMO licence.

Floor space requirements

While the vast majority of HMO landlords offer floor space which is more than adequate for single rooms and those sharing, there have been many cases of bad practice highlighted in the press. As a consequence, the new guidelines will recommend floor space of no less than 6.51 m² for a single tenant and 10.22 m² for two adults sharing. At this moment in time it is unclear when this guidance will become law.

Properties previously exempt from an HMO licence

There are many HMO properties in the UK which do not currently require a licence under the old HMO definition. Those that fall under the criteria for the new HMO definition from 1 October 2018 will need to apply for a licence from their local authority. It is also worth remembering that a licence is required for each individual property as opposed to individual landlords.

Impact on landlords

Until the new regulations are brought onto the statute books nothing is actually set in stone but the indications are that around 170,000 additional properties will be impacted by the new HMO regulations. This is on top of the existing 60,000 properties already under licence. Those who fail to comply with the new regulations will be open to potentially unlimited fines.

Additional funding requirements

There is some debate at this moment in time as to whether the minimum room requirements will be guidance or firm regulations when the changes come in on 1 October 2018. It is likely that many landlords will at some point need to make changes to the layout of their HMO properties. Depending upon the type of property this could have a serious impact upon long-term rental income as well as requiring additional capital to fund changes.

PLANNING FOR THE FUTURE

At this moment in time the HMO changes will only relate to England although it is highly likely that Scotland, Wales and Northern Ireland will adopt their own form of regulatory changes in due course. We know for a fact that the definition of HMOs which require a licence will change and at some point the minimum room size guidance will become law. There is still plenty of time for HMO landlords to review their own individual investments and consider how the changes will impact their assets and their income.

Source: Property Forum

Marketing March 19, 2018 No Comments

HMO minimum room sizes to come into force 1 October 2018

The Ministry of Housing, Community and Local Government has published the expected regulations confirming that from 1 October 2018 HMOs licensed in England under part 2 of the Housing Act 2004 will be required to have a floor area no-smaller than 6.51 square metres.

Licenses issued from 1 October will have to contain the following conditions:

to ensure that the floor area of any room in the HMO used as sleeping accommodation by one person aged over 10 years is not less than 6.51 square metres;
to ensure that the floor area of any room in the HMO used as sleeping accommodation by two persons aged over 10 years is not less than 10.22 square metres;
to ensure that the floor area of any room in the HMO used as sleeping accommodation by one person aged under 10 years is not less than 4.64 square metres;
to ensure that any room in the HMO with a floor area of less than 4.64 square metres is not used as sleeping accommodation.

Where a breach is found to exist, local authorities will be able to grant a period not exceeding 18 months to rectify the situation.

Additionally, a condition will be included to mandate that landlords of licensed HMOs comply with any relevant local authority waste scheme – although no further details or minimum requirements are specified.

The full draft SI may be found here: The Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018

Source: Landlords

Marketing March 16, 2018 No Comments

More landlords will be caught in HMO licensing net

Updated government rules are set to draw thousands more buy-to-let landlords into the HMO licensing net and failure to comply could see them subjected to unlimited fines.

In early March, the Government introduced the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018 (2018/221) (LHMO 2018), which comes into effect from October 1, 2018.

Houses in multiple occupation (HMOs), are defined by the Government as “a property rented out by at least 3 people who are not from 1 ‘household’ (eg a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’.”

The Residential Landlords Association recently predicted that as many as an additional 177,000 homes could be subject to HMO licensing and 16% of landlords currently rent to people in HMOs.

Current rules

At present, landlords operating an HMO, are subject to the Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006 (2006/371), which is applied in certain regions of England and Wales.

Under the present rules, landlords must have a licence if renting out a large HMO. This is defined as five or more people who form more than one household, is at least three storeys high and tenants share toilet, bathroom or kitchen facilities.

However, some local councils still demand a licence even if the property is smaller and rented to fewer people.

At the moment, HMO licensing is limited to specific local authorities, so whether a landlord’s property is subject to one, depends on its location. Landlords can check whether their local council requires an HMO licence on a relevant property, by visiting the following page https://www.gov.uk/house-in-multiple-occupation-licence

The new rules

Under the new rules, licensing will apply to HMOs occupied by five or more people, irrespective of the number of storeys. Also, HMO licensing will apply to purpose-built flats where there are up to two flats in the block.

A licence is valid for five years and a separate licence must apply to each HMO property.

There will be transitional provisions for HMOs that are already licensed under the selective licensing provisions, which will last for six months, but which will be subject to mandatory licensing from 1 October 2018.

Licence requirements

In order to operate a licenced HMO, landlords must comply with a number of standards:

the house must be suitable for the number of occupants;
whoever manages the property – whether that is the landlord or an agent, must be considered ‘fit and proper’ and must have no criminal record or history of breaching landlord laws of code of practice;
the local council must be sent an updated gas safety certificate annually;
the landlord must install and maintain smoke alarms;
the landlord must provide safety certificates for all electrical appliances within the property when requested.

Comment

Jorden Abbs, director of operations at Commercial Trust Limited commented: “It is imperative that landlords check whether their property is classified as an HMO requiring a licence by October 1, or they risk falling foul of the updated laws.

“This extension of the HMO laws will place further pressure on landlords and local authorities, but can also be viewed as a further initiative aimed at raising standards within the private rental sector.

“We have not, as yet, received any comment from lenders as to whether this will affect existing borrowers, although realistically we can expect a couple of potential outcomes.

“Lenders who currently offer mortgages to HMOs that are not currently licensed, but will be under the new rules, can either change their criteria to accommodate these properties and continue to transact; or they will not and at renewal the borrower will have to look elsewhere.

Source: Mortgage Finance Gazette

Marketing March 2, 2018 No Comments

New HMO rules for landlords set to take effect from October 2018

The government will implement new regulations for houses in multiple occupation (HMOs) from 1 October 2018 after a mandatory HMO licensing extension was confirmed in Parliament last week, which spells big changes for some landlords.

It has been more than two years since the issue of mandatory licensing for HMO properties was discussed by the government, and a date has now been set for the new rules to come into effect. It will mean that mandatory conditions and licences will apply to all HMOs that fall under the stated criteria, and the landlords who own them, further tightening up the market and minimising the number of unfit properties and rogue landlords in operation.

What are the licensing changes?

The new mandatory licensing policy from October 2018 will apply to HMOs that are occupied by five or more people, comprising individuals living in two or more separate households – frequently but not exclusive to groups of cohabiting adults – regardless of the number of storeys. The property is also classed as an HMO if it is not made up of self-contained flats, the people who live there treat it as their main residence, and two or more of the occupying households share one or more of the basic amenities. More detailed information can be found here.

Owners of properties that fall under the above criteria will need to obtain licences when the new regulations take effect, which is expected to bring an additional 177,000 HMOs under the mandatory licensing scheme in England. Where selective or additional schemes are already in place for landlords, which accounts for about 20,000 HMOs, the new scheme will replace existing licences.

Current licensing rules already apply to large HMOs, where five or more people rent rooms in the property from more than one household, if the building is more than three storeys high.

What if landlords don’t comply?

The Ministry of Housing, Communities and Local Government has confirmed that landlords are legally required to submit their applications for mandatory HMO licensing by the deadline of 1 October 2018, with no allowance for a grace period after this date. The government is expected to publish guidance in the coming months on the issue to make local authorities aware of the obligation, but landlords who fail to apply for the correct licence will be in breach of the law.

Will there be any other changes?

Implementing a minimum room size rule has been part of the talks, and more specific details on this are still to be announced. The minimum sizes will apply to rooms that are slept in, and local authorities will be required to enforce this by specifying appropriate rooms in HMOs, and the number of people allowed to occupy them. If the conditions are breached, the local authority will issue a warning to the landlord to remedy the situation, after which point legal action can be taken.

Another condition of the licences will relate to refuse disposal and storage facilities, with minimum numbers of bins and storage facilities for waste expected to be set out by the government.

Marketing February 24, 2018 No Comments

New HMO Regulations for Mandatory Licensing – Effective 1st Oct 2018

Statutory Instruments
2018 No. 221

Housing, England
The Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018

Made

20th February 2018

Laid before Parliament

23rd February 2018

Coming into force

1st October 2018

The Secretary of State makes the following Order in exercise of the powers conferred by sections 55(3) and 250(2)(a) and (b) of the Housing Act 2004(1).
Citation and Commencement

1.—(1) This Order may be cited as the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018.

(2) This Order comes into force on 1st October 2018.
Application

2. This Order applies in relation to an HMO in England(2).
Interpretation

3. In this Order “the Act” means the Housing Act 2004.
Description of HMOs prescribed by the Secretary of State

4. An HMO is of a prescribed description for the purpose of section 55(2)(a) of the Act if it—

(a)is occupied by five or more persons;

(b)is occupied by persons living in two or more separate households; and

(c)meets—

(i)the standard test under section 254(2) of the Act;

(ii)the self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats; or

(iii)the converted building test under section 254(4) of the Act.
Transitional Provision

5.—(1) A licence issued under Part 3 of the Act has effect as if issued under Part 2 of the Act in respect of an HMO that—

(a)is licensed under Part 3 prior to 1st October 2018, and

(b)is required to be licensed under Part 2 from that date.
Revocation

6. The Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006(3) is revoked.
Review

7.—(1) The Secretary of State must from time to time—

(a)carry out a review of the regulatory provision contained in this Order, and

(b)publish a report setting out the conclusions of the review.

(2) The first report must be published before 6th April 2023.

(3) Subsequent reports must be published at intervals not exceeding five years.

(4) Section 30(4) of the Small Business, Enterprise and Employment Act 2015 requires that a report published under this article must, in particular—

(a)set out the objectives intended to be achieved by the regulatory provision referred to in paragraph 1(a),

(b)assess the extent to which those objectives are achieved,

(c)assess whether those objectives remain appropriate, and

(d)if those objectives remain appropriate, assess the extent to which they could be achieved in another way which involves less onerous regulatory provision.

(5) In this article, “regulatory provision” has the same meaning as in sections 28 to 32 of the Small Business, Enterprise and Employment Act 2015(4).

Signed by authority of the Secretary of State for Housing, Communities and Local Government

Heather Wheeler

Parliamentary Under Secretary of State

Ministry of Housing, Communities and Local Government

20th February 2018

EXPLANATORY NOTE

(This note is not part of the Order)

This Order prescribes a description of a house in multiple occupation (“HMO”) to which Part 2 of the Housing Act 2004 (“the Act”) applies. Under section 61(1) of the Act every HMO to which Part 2 of the Act applies must be licensed unless it is subject to either a temporary exemption notice under section 62 of the Act or an interim or final management order under Chapter 1 of Part 4 of the Act.

The Order applies to HMOs in England but does not apply to converted blocks of flats, to which section 257 of the Act applies. These are buildings that have been converted into and consist of self-contained flats where the building work undertaken in connection with the conversion did not comply with the appropriate building standards and still does not comply with them, and less than two-thirds of the self-contained flats are owner-occupied.

Article 1 makes a commencement provision.

Article 4 prescribes a description of HMOs for the purpose of section 55(2)(a) of the Act. The standard test relates to HMOs which comprise of one or more units of living accommodation which do not consist of a self-contained flat or flats. The self-contained flat test relates to HMOs which comprise of a self-contained, purpose-built flat situated in a block comprising of no more than two self- contained flats (whether or not the block also contains non-residential premises). The converted building test relates to HMOs which are converted buildings.

Article 5 makes a transitional provision.

Article 6 revokes The Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006 which this Order replaces.

Article 7 makes provision for the review of these Regulations at the end of the period of 5 years beginning with the date on which they come into force.

An impact assessment has been prepared in relation to this Order. The assessment will be placed in the Library of each House of Parliament and made available on www.gov.uk. Copies may be obtained from the Ministry of Housing, Communities and Local Government, 2 Marsham Street, London, SW1P 4DF.
(1)

2004 c.34. For the definition of appropriate national authority see section 261(1) of the Act.
(2)

For the meaning of HMO see sections 77 and 254 to 259 of the Act.
(3)

S.I 2006/371
(4)

2015 c. 26. See section 32.

Source: Legislation.gov.uk

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