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Landlords face stricter rules over property cleanliness

Landlords in Glasgow are facing stricter rules on how they operate their properties.

The new regulations are aimed at curbing the impact that houses of multiple occupancy (HMO) can have on communities.

The conditions, which cover cleansing issues, repairs to common property and dealing with neighbour complaints, have come into effect following a review by Glasgow City Council’s Licensing and Regulatory Committee.

The review identified concerns linked to the presence of HMOs in neighbourhoods across the city, particularly where there are high concentrations of this type of rental property.

High levels of refuse from HMOs being left in back courts and lanes has been a common complaint to the Council, with a surge in bulk waste being dumped at the end of the academic year also being raised as a recurring problem.

William Beckett, Garnethill Neighbourhood Watch, has welcomed the changes after a landlord in area was penalised repeatedly for the rubbish left in his back court.

William Beckett, said: “I hope this is enough to stop it and I just hope that all landlords take heed of the new conditions.

“It gives them more power as well with their tenants to say look this has got to stop, these are the new rules, you’ve got to comply with these conditions, failing that then you’ll have to leave.”

Public consultation feedback also focused on difficulties with securing support from HMO landlords for repairs and maintenance to common parts of flats.

How to deal with noise and other anti-social behaviour was also flagged as a source of on-going disputes.

Councillor Alex Wilson, Chair of the Licensing and Regulatory Committee, said that striking a balance between the needs of neighbourhoods, residents, HMO tenants and landlords was essential.

He said: “I’m hoping to see a massive difference in the number of complaints that we get especially from community councils which is where the majority of complaints do come from.

“I would like to think that if there is an example to be set then hopefully the private rented sector will see the same changes, everyone will benefit.”

The new conditions for HMOs will cover:- general refuse ; maintenance, insurance and repairs of common areas; bulk refuse; neighbouring residents and statutory notices.

All of these conditions will be incorporated into a new code of conduct, which will apply to all HMO licence holders.

As part of the new conditions, a pilot project will be operated through the cleansing service provided by the council’s Neighbourhoods and Sustainability department.

The pilot will involve landlords notifying the council in advance of flats being cleared of items at the beginning or end or the academic year to ensure bulk waste is reported for collection.

By Susan Ripoll

Source: STV

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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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What brokers need to know about looming HMO changes

The new HMO rules for landlords that will come into force in October will extend the licensing requirements and may also affect room sizes. Brokers working within the buy-to-let market have spent the past few years getting their heads around a raft of recent regulatory and tax changes introduced to the market.

And it’s not over yet; new changes that will affect HMO landlords – as well as some landlords that might not consider themselves to own HMOs – are expected to come into force this October.

What do brokers need to know?

Last year, the government launched a consultation looking at HMOs and residential property licensing. The consultation aimed to give councils best practice guidance on standardising living conditions in HMO properties across the country.

The response to the consultation was published last December and this new legislation on licensing of HMOs is expected to pass through Parliament in the coming months, becoming enforceable in October.

Currently, properties with three or more storeys that are occupied by five or more people from two or more households require an HMO licence. However, the new rules coming into force in October will extend the scope of licensing for HMOs. An HMO licence will now be required for all properties with five or more people from two or more households, regardless of the number of storeys in the property, meaning a substantially higher number of properties will require a licence from October.

In addition to extending the licensing requirements, the government is also proposing the introduction of a minimum room size for bedrooms in licensed HMOs. The new guidance will recommend floor space be no less than 6.51 sq m and 10.22 sq m for single use and two adults sharing respectively. These new rules are expected to impact approximately 170,000 properties in addition to the 60,000 that already have an HMO licence.

What should brokers be doing?

Ultimately, brokers with existing or prospective clients with HMOs must ensure they understand fully the incoming changes so that they can support their clients in the best possible way. Brokers will play a vital role in raising awareness among those landlords whose properties will soon be classified as an HMO.

In addition, the changes represent an opportunity for brokers to further advise and support their clients. For example, for those clients affected by room size requirements or looking to convert their properties into HMOs or student lets, brokers can advise on how to access the funding to undertake these changes.

How can bridging finance help landlords?

One such funding route brokers can advise on is bridging finance. This is ideal for landlords needing a short injection of cash to complete conversions quickly. Indeed, some bridging finance providers will allow borrowers to acquire finance from day one before applying for planning permission, and even those that don’t will have shorter turnaround times and greater flexibility than other lenders.

Therefore, for clients needing to make changes quickly, bridging finance could be an invaluable route of accessing funding so that they can get the changes made within the necessary timeframe. This could be particularly beneficial for landlords who have already had to make changes to properties in their portfolios to comply with EPC regulations introduced this April.

The changes also represent an opportunity for brokers to further advise and support their clients

Changes to EPC regulations mean that landlords with properties with an ‘F’ or ‘G’ energy efficiency rating are required to make changes to their properties to improve their rating, or they face significant fines. These regulations affect both commercial and residential landlords and, while residential landlords won’t typically face high costs when making improvements, commercial landlords could face real problems if they aren’t able to improve their efficiency within the short timeframe – often as little as three months.

Things to remember

As mentioned, brokers have a vital role to play in advising their clients on these new regulations. First, this will mean raising awareness to ensure those landlords whose properties are going to come under the umbrella of an HMO are not only aware of the changes but also understand the steps they will need to take in order to get a licence. This will include finding the funding necessary to increase room size if needed.

Brokers will also play a role in advising those clients who want to either convert properties into HMOs or purchase them.

One final thing to remember is that landlords will be required to renew their licence through their local council every five years. Brokers must ensure that landlords are aware of this and also that they have a licence for each individual property in their portfolio.

Source: Mortgage Strategy

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New HMO rules expected in October amid warning that complexity of licensing is driving landlords out

The Government is planning to introduce an extension to rules on Houses in Multiple Occupation (HMOs) in October, according to Housing Minister Dominic Raab.

The Government set out its proposals last year, which involve mandatory licensing for properties — regardless of height — that are occupied by five or more people from two or more households.

Currently, HMOs that must be mandatorily licensed are of three or more storeys.

The new rules still have to be approved by Parliament, but in response to a question in Parliament by Liberal Democrat MP Wera Hobhouse, Raab set out a timetable for their introduction.

He said: “The Government proposes to extend the scope of mandatory houses in multiple occupation (HMO) licensing, so that a licence is required for HMOs with five or more occupiers.

“We published our response to our HMO reforms consultation in December 2017, and we plan to lay the necessary regulations before Parliament shortly with a view to bringing them into force (subject to approval) in October 2018.”

New rules will also come into force setting minimum size requirements for bedrooms in HMOs. As part of the licensing requirements, local councils will be able to make sure that only rooms meeting the standard are used for sleeping.

Rooms used for sleeping by one adult will have to be no smaller than 6.51 sqm and those slept in by two adults will have to be no smaller than 10.22 sqm. Rooms slept in by children of ten years and younger will have to be no smaller than 4.64 sqm.

Meanwhile, the National Approved Letting Scheme (NALS) has warned that more and more landlords will leave the private rented sector (PRS) as they struggle with rising costs and the complexity of licensing schemes.

NALS yesterday revealed findings that licensing fees can be vastly different depending on locations, with London boroughs charging significantly different fees.

It said that following the Government’s decision to widen the mandatory HMO licensing scheme to another 160,000 properties across England, the issue of fees was even more important because increasing costs could also drive rents up across the country.

NALS research, conducted by London Property Licensing, shows that in 2017, licensing fees for a three-storey HHMO with five unrelated occupants can range from £125 (City of London Corporation) to £2,500 (Lewisham Council).

It found that in 23 of London’s 33 boroughs licensing fees are over £1,000 for a similar sized property. Overall, average fees have climbed every year since 2014 and the average cost has risen by 12.9% in 2016/17 and a further 5% this year (standing at £1,119).

There are now 29 separate additional and selective licensing schemes in operation across London with more schemes on the way, which means that landlords can potentially face licensing their properties through different schemes in different parts of the city, NALS said.

Isobel Thomson, NALS chief executive, said: “We should be clear: licensing HMOs helps protect tenants and drives up standards in the PRS.

“At the same time, the maze of licensing schemes operating in the capital is a huge financial and administrative burden on landlords, with some councils seeing them as a new revenue stream.

“With landlords under pressure from a host of regulatory changes, this increased burden is likely to push them out of PRS exactly at a time when they have a key role to play in providing much-needed housing.”

Source: Property Industry Eye