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Concerns residents would be ‘crammed’ into proposed HMO

Concerns have been raised over plans for up to eight people to live in a small terraced house in Wrexham.

An application has been entered to convert the property on Park Street in Rhosddu into a five-bedroom house in multiple occupation (HMO).

Objections have been raised by several neighbours who fear that tenants would be ‘crammed in’ and may include substance abusers.

Wrexham Council’s highways department said it was also against the scheme because it did not include enough parking spaces.

However, the authority’s head of environment and planning has backed the proposals for approval.
In a report, Lawrence Isted said: “I am satisfied that this proposal would not result in an over concentration of HMOs in the immediate locality.

“The site is also in a highly sustainable location within easy reach of all public transport options and in an area where reliance upon the motor car should not be encouraged

“Licensed HMOs are subject to conditions that require landlords to take all reasonable steps for the satisfactory management and maintenance of good physical standards of HMOs.

“There are also conditions requiring the licence holder to prevent anti-social behaviour.

“There are no planning or housing regulatory reasons why a HMO proposal should be refused on the grounds of any particular type of person occupying the property.”

Mr Isted said he acknowledged concerns about the impact of traffic on the narrow one way street.

Due to its restricted width, he said cars often resort to driving along the footpath.

However, he added that most people who use the road show caution.

The proposals will be considered by Wrexham Council’s planning committee on Monday 7 January.

Source: Wrexham

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Government announce new room size guidance

Houses in Multiple Occupation and residential property licensing reform Guidance for Local Housing Authorities Click here

“3. 4 What is the minimum sleeping room size?

The minimum sleeping room floor area sizes (subject to the measurement restrictions detailed in the paragraphs below) to be imposed as conditions of Part 2 licences are:
• 6.51m square for one person over 10 years of age
• 10.22m square for two persons over 10 years

The minimum size for sleeping accommodation does not apply to charities providing night shelters or temporary accommodation for people suffering or recovering from drug or alcohol abuse or mental disorders.

The Mandatory Conditions Regulations 2018 amend Schedule 4 of the Act, introducing the following new conditions:
•Mandatory national minimum sleeping room sizes (See paras 3.3 – 3.10); and
• Waste disposal provision requirements (See paras 3.11). 15
• 4.64m square for one child under the age of 10 years

It will also be a mandatory condition that any room of less than 4.64m square may not be used as sleeping accommodation and the landlord will need to notify the local housing authority of any room in the HMO with a floor area of less than 4.64m square. The measurement is one of wall to wall floor area where the ceiling height is greater than 1.5m. No part of a room should be included in the measurement where the ceiling height is less than 1.5m.”

RLA: Landlords are today welcoming new guidance for councils on room sizes in rented homes.

The guidance addresses concerns raised by the Residential Landlords Association (RLA) that recent changes to room size regulations could have led to landlords being in breach of the law where a pregnant tenant gave birth.

Since October this year, rooms used for sleeping by one person over 10-years-old have had to be at least  6.51 square metres, and those slept in by two people over 10-years-old will have had to at least 10.22 square metres. Rooms slept in by children of 10 years and younger have had to be at least 4.64 square metres.

Whilst the RLA believes that tenants should never face the dangers of overcrowded accommodation, it was concerned that the changes could have seen councils required to take action against landlords where a tenant gave birth and as a result there were two people in a room sized for one. A landlord who sought to evict in this scenario would be carrying out unlawful discrimination.

Following extensive discussions with the Government, newly published guidance makes clear that this will not happen. It notes that in instances where a tenant has given birth to a child since moving into a House of Multiple Occupation (HMO),  that there is an expectation that local authorities will not be acting in the public interest if they commence a prosecution.

David Smith, Policy Director for the RLA said: “We warmly welcome this new guidance. It reflects considerable work between the RLA and the Government in addressing serious concerns about the consequences of the room size changes.

“The Government has clearly listened to our concerns and this document should provide much greater assurances to landlords and tenants alike.”

Source: Property118

letting Flintshire HMO landlord
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‘Cost-cutting with a view to profit’: Letting firm fined for string of faults at HMOs

A letting company has been fined over a string of defects at its shared accommodation for vulnerable adults.

Salop Lets, based in Madeley, Telford, has been ordered to pay more than £43,000 after pleading guilty to 24 offences under the Housing Act 2004.

The company had previously tried to blame the problems on its tenants – vulnerable adults who lived in three houses of multiple occupation in Hurleybrook Way, Leegomery.

The defects included broken and damaged fire doors and incomplete and missing safety certification for the the fire alarm systems, Telford Magistrates Court head.

General faults such as broken showers, damaged kitchen units and broken or missing lighting units were also found, as well as emergency fire alarms and lighting being connected to a pre-paid metered electricity supply, meaning when the meter ran out, the emergency systems did not work.

The issues were brought to light following an inspection from environmental health and a fire safety officer from Shropshire Fire and Rescue Service.

An initial complaint was made back in February.

The court heard improvement notices had been served to ensure the properties were brought up to the required standard, but the work was either done to a poor standard or not at all.

In one instance the company installed a second-hand fire door claiming it to be new.

Prosecuting, Sarah Morgan, said: “Very little work was done during the operation of the improvement notices.

“I would draw your attention to the past history of the company and consider that they were cost-cutting with a view to profit.

“They were a professional management company. They chose to house vulnerable tenants but failed to manage the risks associated with this”.

The court heard that since 2015 housing benefit totalling nearly £1.5 million had been paid in respect of properties managed by Salop Lets.

The company was fined £31,500 and ordered to pay £11,462.07 costs and £170 surcharge.

Sentencing the company, district judge Rebecca Crane said it had fallen far short of the housing standards expected and had ignored concerns raised by Telford & Wrekin Council, adding that there was a risk of death or life-changing injury from the company’s failure to maintain fire alarms and fire doors.

Councillor Richard Overton, Telford & Wrekin Council’s cabinet member for housing and enforcement, said: “The safety of our residents is of paramount importance.

“That is why we are working hard to make sure that private rented housing is safe for tenants to live in.

“Earlier this year we set up the rogue landlord taskforce as part of our Better Homes For All package to improve housing in the private rented sector.

“This case highlights the vital work of this taskforce in keeping people safe.”

Source: Shropshire Star

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Local authorities still unsure how many HMOs should be licensed under new rules

New analysis claims to highlight how unprepared local councils are for the extra regulations on HMO licensing.

A freedom of information request by Simple Landlords Insurance to 90 local authorities found that 65 (72%) had no idea how many unlicensed HMOs there may be in their area, while 29 (32%) had no idea how many properties should come in under the new regulatory scheme.

Since October 1, the old HMO rules changed, and now apply to properties of any height where there are five or more sharers in two or more households.

Previously, only properties of three storeys or more were covered.

The research also found 31 (34%) councils out of the 90 had not prosecuted any landlords for infractions of existing rules in the past two years.

There were only 103 HMO licences rejected at application over the past 12 months, with a total of 18,881 licenses granted.

It echoes similar data from property investment firm Touchstone that found only a minority of local councils had an idea of how many properties would need to be licensed under the new rules.

Housing minister Heather Wheeler said at the time of the changes in October that the new rules would increase the number of mandatory HMO licensed properties in England from 60,000 to an estimated 220,000 properties.

However, Richard Truman, head of operations at Simple Landlords Insurance, said this research shows local authorities are hamstrung in their efforts to apply the new legislation, due to a combination of poor intelligence about housing stock and stretched resources.

He said: “Earlier this year, we found that 85% of landlords we spoke to weren’t aware of the looming HMO regulations. A month on from their implementation, we wanted to find out exactly what those landlords are facing on the ground.

“The changes may be well-meaning, but a failure to support local authorities to communicate about them and enforce them is bad news – for good landlords and for tenants.”

Source: Property Industry Eye

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Is the government’s HMO legislation failing?

New figures obtained by Simple Landlords Insurance appear to show that government plans to protect tenants from poor living conditions through the expansion of mandatory HMO licensing look set to fall way short of their ambition.

According to the data, the majority of local authorities don’t know how many unlicensed HMOs are in their area – let alone where they are – leaving them ill-equipped to seek those who break the rules or take advantage of new enforcement powers.

The findings reveal that the rules are “practically unenforceable”, according to one HMO licensing expert, with the government’s recent commitment of £2m of additional funding to help implement the scheme unlikely to have any real impact.

The freedom of information requests returned by 90 local authorities have shown that two thirds (65/90) of local authorities have no idea how many landlords are breaking HMO licensing rules, nearly one third (29/90) have no idea how many properties should come in under the new regulatory scheme and over a third (31/90) did not prosecute any landlords for infractions of existing rules in the last two years.

There were only 103 HMO licences rejected at application over the last 12 months, versus a total of 18,881 licenses granted.

Houses in Multiple Occupation (HMOs) containing five or more people in two or more households with shared facilities such as a kitchen, bathroom or toilet must be licensed.

To gain a license, landlords must now pass a ‘fit and proper’ test as well as providing proof of compliance with fire safety regulations and provide tenants with a written statement of the terms of their occupancy. The rules were widened on 1 October, removing a minimum three storeys high requirement whilst new conditions on minimum room size and waste collection were imposed.

The known unknowns

The government’s Housing Minister Heather Wheeler MP claimed the new rules would increase the number of mandatory HMO licenced properties in England from 60,000 to an estimated 220,000 properties.

However, this new research shows local authorities are hamstrung in their efforts to apply the new legislation – due to a combination of poor intelligence about housing stock and stretched resources.

Carl Agar, founder of The Home Safe Scheme and managing director of property management company Big Red House, says: “It’s a big worry that local authorities don’t seem to have the resources available to manage this new workload. And the new rules are going to be practically impossible to enforce. The government is essentially relying on honest landlords coming forward to apply for a licence – leaving the so-called rogue or down-right criminal landlords that really need to be identified – out of scope. The £2m promised support is literally a drop in the ocean.”

Cities overwhelmed

Amongst the local authorities that have the intelligence and data to make a prediction about how many more HMOs would need a license, cities unsurprisingly show a major hike.

Liverpool City Council had 1,195 HMOs with a mandatory license before 1 October, and expects that 5,000 will require licensing. Birmingham expects numbers to swell from 1,853 to 4,000 and Southampton expects the numbers will increase from 551 to 2500.

Many London boroughs had no idea at all how many additional HMOs would come under scope, whilst those that did are expecting a huge jump – in Greenwich from 147 to 3,250 HMOs under scope.

66% of the local authorities who responded were able to estimate how many HMOs were likely to require a mandatory license from 1 October, and the average increase recorded was 227%.

Carl adds: “Many local authorities are now faced with at least twice as many licences to process and check with the same amount of human resource – leaving even less time for enforcement. The major conurbations will be swamped.”

Mystery housing stock

Environmental Health Officer and Chair of the National HMO Network Paul Fitzgerald, explains: “Most local authorities simply do not fully understand the housing stock in their area, and they are kidding themselves if they claim that they do.

Trying to identify an HMO from scratch is an incredibly challenging job, made harder by the failure to join up systems like council tax and benefits registers, and immigration databases. Those who are determined to break the law do not apply for a licence in the first place.

Once they have been identified, dealing with criminal HMO landlords will be yet another problem. Pursuing a prosecution – or applying for a banning order – takes time, stretches resources and is not guaranteed. Many local authorities will opt for issuing fines, but there’s no guarantee that these will be paid without going to court, and that’s another resource and cost-heavy process.”

The bottom line” sums up Carl Agar “is that the Housing Act, in its current form, is no longer fit for purpose and the government need to prioritise helping local authorities know who is renting property in their areas and what type of properties are being let. A central government funded national register would be a major step forward.”

Richard Truman, Head of Operations at Simple Landlords Insurance commented: “Earlier this year, we found that 85% of landlords we spoke to weren’t aware of the looming HMO regulations. A month on from their implementation, we wanted to find out exactly what those landlords are facing on the ground.

The changes may be well-meaning, but a failure to support local authorities to communicate about them and enforce them is bad news – for good landlords and for tenants.

We want to see the emerging class of professional landlords supported by central government and local authorities, and that can clearly only be achieved with more effective regulation and resource.”

Source: Property Reporter

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Hightown HMO plans rejected after residents warn of impact on their community

Plans to create a six-bedroom house in multiple occupation (HMO) in Wrexham have been rejected after residents warned it would tear their community apart.

Proposals were submitted to Wrexham Council to convert an existing house on Beechley Road in Hightown to accommodate a total of seven people.
However, after members of the authority’s planning committee carried out a site visit today, they chose to go against the advice of officers and refused the application. They were greeted at the property by members of the Beechley Road Residents’ Association carrying placards, including one which read ‘Don’t Turn Beechley Road Into A Ghetto’.

Neighbours raised a number of concerns about the plans, including issues over parking and fly tipping as a result of the six existing HMOs on the street.
They have previously presented a petition with 90 signatures against the development.

John Harding, chair of the association, said: “A line has to be drawn somewhere to ensure the quality of life of long term residents is maintained, and in our opinion this is where the line should be drawn.

“There has already been an adverse impact on house prices in the road as a result of decisions taken in the past by the planning department.

“This deterioration can only accelerate given the authority’s perceived plan of allowing properties in the road to become nothing more than cheap accommodation for short term residents and the problems they bring with them.

“We see this as a direct attack on our future and will do our utmost to prevent this from happening.”

After committee members returned to the Guildhall, they were told that the proposals complied with all of the council’s policies.

Chair Mike Morris warned that valid grounds would need to be found for refusal.

But several politicians voiced their frustration at the increasing number of HMOs, including the area’s councillor Graham Rogers, he said: “Having visited the site, and I know the site very well, my concerns are still on parking and the four spaces, the double yellow lines at a very busy junction, the speeds at excess of what they are supposed to be and 90 residents have signed a petition which we should take the cognisance of.”

He was supported by Cllr Paul Jones, who said: “It’s very disappointing that our planning policy and planning guidance is inflicting yet another HMO on a community in Wrexham. The area is not saturated with HMOs, but it’s going in the wrong direction. HMOs done in the wrong way cause considerable problems for that community.

“It will be the people in that community baring the consequences whichever way it goes.”

Cllr Rogers said the plans should be refused on the grounds of parking and access, despite being told the highways department had no issues.

His recommendation was backed by eight votes to four.

Source: Wrexham

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Could HMOs turn out to be not the golden goose that investors hope for?

It’s a funny old world. When I was at my busiest, the type of properties that investors now actively seek out were considered sub-prime and to be avoided.

Specifically, these include student lets, lets to sharers, sitting/assured tenancies and Houses in Multiple Occupation (HMOs).

A corollary of the rush into buy-to-let is that many now see BTL as a way of augmenting their income.

Certainly in London most of the ‘total return’ on BTL has come from capital appreciation, but elsewhere income has become important, and possible.

But as yields have suffered, especially in the last five years off the back of unprecedented and market distorting low interest rates, those seeking income have moved into alternative asset classes.

Many would say student housing has been over-played. However, we all know that many renters are now forced to share houses – which has made HMOs look particularly attractive.

This has not gone unnoticed by the authorities, which have brought in a raft of changes, including licensing schemes.

The result will be a step-change in the number of HMOs being registered – but is there a hidden issue here that doesn’t seem to be talked about?

An HMO has historically been considered as being worth less than a standard residential property, being valued up to 25% less.

Once designated as an HMO the local authority would resist the change back to residential because the new rooms within an HMO each count towards their precious number of available ‘dwellings’.

Indeed I used to do deals for clients where we’d buy a centrally placed property with an HMO use, then buy another in a less salubrious part of the same borough, transfer the use and hey presto, a significant uplift on the more valuable property was realised when a reversion to straight residential was granted.

Recently, I sat in front of a highly placed government official with some responsibility in the area of drawing up new legislation, and asked if the same rules would still apply, i.e. that change of use back to residential after a new HMO licence would be resisted – and they weren’t able to answer.

Anyone thinking of venturing into this area should carefully consider their options, or at least ask the right questions.

Losing a large chunk of capital value to gain a slightly higher yield might just be too high a price to pay.

Source: Property Industry Eye

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Advisers urged to help landlords with HMO licencing changes

Advisers need to help landlords who may be receiving letters from lenders about their mortgages due to HMO licencing changes, two lenders urged at FSE Midlands in Coventry today.

The changes are thought to mean 177,000 properties now require a HMO license.

David Whittaker (pictured), managing director of Keystone Property Finance, and Adrian Moloney, sales director at OneSavings Bank, highlighted how some landlords are already receiving letters from their buy-to-let lenders regarding properties which may now require a license.

Whittaker said: “Landlords are punch-drunk from the regulatory changes of the last few years.

“This is the law of unintended consequences in full effect and you would expect some common sense from lenders.

“Lenders should say that, as long as there are no changes to the property or that the landlord doesn’t want a further advance, that they can keep the loan.”

Before the Budget there was a suggestion that landlords might be able to get capital gains tax relief if they sold their properties to long-standing tenants.

Both Whittaker and Moloney were not surprised that this didn’t happen.

Whittaker said: “It was never going to fly. Anything that would line the pockets of landlords is not going to happen.

“HMRC and the Chancellor see the landlord community as a group that traditionally hasn’t paid its wedge.

“Landlords do not draw any empathy in the corridors of Whitehall.”

Moloney said: “If your investment is good why would you get rid of it?

“Sales of property investments have not been really picked up in the main by first-time buyers anyway, they’ve been picked up by other landlords.”

Source: Mortgage Introducer

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Redbridge Landlord Fined £7,500 For Overcrowded HMO

A Redbridge landlord has been fined £7,500 after he was found to be cramming 23 people into a house in east London. The property in question, situated in Beehive Lane, Gants Hill, had room for just six occupants.

Housing officers at Redbridge council raided the property following complaints from neighbours about overcrowding. The officers discovered 16 people currently in the house as well as evidence of another seven living there. The people inside did not have access to sufficient cooking, washing and toilet facilities. The residents inside were also all adults.

The property’s managing agent, Marvel Estates Limited, held a house in multiple occupation (HMO) licence, however it was only valid for six tenants.

Following the raid, which took place in June last year the firm, based in Forest Gate, appealed against a financial penalty imposed by the council. However, at a tribunal hearing last month it agreed to pay the fine.

The cabinet member for housing and homelessness at Redbridge Council said: ‘We are determined to root out rogue landlords and this financial penalty makes it clear we mean business. It’s unacceptable for tenants to be living in conditions which fail to comply with legislated requirements. We want to work with landlords to prevent this kind of situation but if they are not willing to do so, our message is clear – we will find and fine you.’

The fine for the Redbridge landlord is part of a wider crackdown on rogue landlords in Redbridge and across London. Last month in Brent a landlord was found to have crammed 26 mattresses into a dangerous three-bedroom house. Officers forced their way into the property and found over 20 men who were residing in conditions described as ‘appalling and unsafe’. The house, located in Kingsbury, was described by the council as one of the worst illegal HMOs it has ever experienced.

Source: Residential Landlord

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Agents and landlords ‘could be in trouble’ as most councils fail to understand new HMO rules

A series of Freedom of Information requests has found that only a minority of local authorities have established the number of properties that need to be licensed under new HMO rules.

Even fewer councils – only a tiny handful – know whether the properties would meet licensing conditions, for example, as to fire safety and new minimum room size requirements.

As a result, thousands of HMOs could be illegal, exposing landlords and agents to fines and other penalties, and inability to serve Section 21 notices.

Tenants meanwhile could face losing their homes.

From October 1, the old HMO rules changed, and now apply to properties of any height where there are five or more sharers in two or more households.

Previously, only properties of three storeys or more were covered.

A 2008 Government report estimated there were 56,000 HMOs licensed under the old regime.

These will automatically be passported over to the new arrangements, but the Government estimates a total of 160,000 properties could be covered by the new regulations and has given local authorities up to three years to identify them.

Research carried out by Doncaster-based property investment firm Touchstone suggests that many councils will need all of this time, while meanwhile a large number of HMOs are illegal.

The research has apparently revealed massive gaps in local authorities’ knowledge of where these properties are and who owns them.

Most, it is claimed, are relying on landlords to submit licence applications.

Of the 238 authorities that responded to a Freedom of Information request, sent at the start of September, asking how prepared they were for the changes, 93 said they had carried out research to establish how many properties in their area require an HMO licence.

However, only 14 had conducted research to establish how many of those properties were in a condition where they could expect to be granted an HMO licence.

Touchstone CEO Paul Smith said that the Government had passed legislation without any clear idea as to the sale of the issue.

He said: “We’re aware of one local authority with 1,800 properties classed as HMOs and privately it told us that only around 40% will meet the [HMO standards required in] the new regulations.

“If that’s happening across the country, we could be looking at a major problem.
“Ministers have estimated 160,000 properties could be affected but I would be interested to know how they arrived at that figure as most local authorities have not conducted any research.”

Responses to the Freedom of Information requests showed that while Manchester City Council estimated it now has 5,000 HMO properties, it hasn’t researched how many will meet licensing standards.

North Somerset Council said it had 2,940 properties affected, Peterborough and Bournemouth put their numbers at up to 2,500 while Cambridge, York and Hull city councils estimated they had more than 1,000 HMOs.

None was able to say how many were currently operating illegally.

Leeds, Bristol, and Norwich were among the majority of authorities which said they had not carried out any research to establish how many properties in their area might be affected or how many might pass or fail.

Richard Lambert, CEO of the National Landlords Association, had already said that landlords enquiring about licences were being given wrong answers by local councils which appeared to know nothing of the changes.

He now says: “This is an unacceptable failing on the part of the Ministry of Housing, Communities and Local Government.

“We‘re also concerned that local authorities appear unprepared for the changes and have, anecdotally, heard that landlords may be being given advice which could put them at risk of breaking the law.

“Our advice to all landlords is to check if your property falls under the new regulations, and if your local authority does not yet have a process in place, make sure you apply using the existing mandatory HMO licensing scheme and receive an acknowledgement of your application.”

Source: Property Industry Eye