Existing HMO rules to change this year
HMO licensing currently encompasses 60,000 homes in England. The proposed changes to legislation will mean that a further 170,000 shared homes will be required to obtain a license. This license can only be obtained once the property owner has fulfilled all the requirements of their Local Authority.
The following blog will deal with the most impacting changes expected to come in this year. The Department for Communities and Local Government has now entered a consultation period to properly define the extent of the changes to the mandatory HMO licensing, however there are a few points which have been marked out as unavoidable.
1) The licensing will expand to include all HMOs with 5 or more sharers making up two households.
An earlier Government consultation, in October of 2015, sent out an advisory questionnaire to organisations and individuals across the housing sector. Of the 449 respondents, 78% agreed that HMO licensing should extend to include larger houses regardless of the numbers of storeys. 48% went on to agree that houses with 5 sharers from 2 or more households should be HMO licenseable.
2) Flats above shops and businesses will also be HMO licenseable.
79% of those asked in the 2015 survey, believed that flats above businesses should be HMO licensed. Changes to this particular area are being considered because risk of fire is increased in these types of residences.
3) Landlords and Letting Agents will be expected to carry out criminal record and referencing checks more diligently – HMO or not.
This coincides with current government movements surrounding stricter enforcement of immigration rules. Since December 2016, new criminal offences have been created to penalize landlords who fail to undertake Right to Rent checks against their tenants.
4) Landlords and Letting Agents who do not obtain HMO license
The exact impact of being placed on the database has not been fully determined and I imagine we will know soon after the ongoing consultation period. It has been rumored that the database could mean landlords might incur a suspension of up to a year, though nothing has been confirmed.
5) Penalties of up to £30,000 are expected to be incurred for those who do not license their rental homes
The increase in the maximum penalty to £30,000 has come because it was believed the original maximum penalty of £20,000 did not work to deter landlords for not complying with HMO standards. In fact, it was understood that landlords simply incorporated the fines as typical business costs.
These changes will be implemented throughout the year with a grace period of six months before a penalty is incurred
In the meantime, check out the services offered by HMO Services London and arrange a initial consultation.