Campaign to abolish HMO re-banding

Landlords are being urged to support a campaign that would effectively eliminate council tax re-banding for Houses of Multiple Occupation (HMO).

It has been previously reported that the Valuation Office Agency (VOA) are going through the process of re-banding HMO’s, making such properties subject to higher bills, up to four times more expensive in total.

Tory MP, Caroline Dineage, has tabled an amendment to the Levelling Up and Regeneration Bill with the aim of reversing the VOA’s re-banding process, in order to make sure that HMO properties are properly classified as single households for council tax purposes. Dineage states:

“The Valuation Office Agency has been applying council tax to bedrooms that are not self-contained spaces. This ultimately makes each bedroom a separate dwelling, resulting in the tenant being liable for council tax on a bedroom. This disproportionately affects young, hardworking individuals who are now required to pay council tax on a property which doesn’t fit the criteria.

“My amendment seeks to change the definition of a dwelling to include self-containment, so that we can prevent the imposition of council tax individually on tenants of a room in a house with shared facilities.”

More support from landlords

Emma Hayes, managing director of Platinum Property Partners, argues:

“The time has come again for HMO landlords to stand together and strive for positive change in the private rented sector. Although HMOs have been at risk of council tax re-banding since the early 1990s, the actual occurrence has remained low, until now. With increasing requests from councils to re-band properties, it’s crucial we get the measures reversed so that landlords can continue to provide high quality affordable accommodation to their housemates.

“To put the impact into context, one particular HMO in the PPP network that was classed as a single dwelling in Band D had a monthly council tax bill of £1,223.77 in 2017/18.

“Following a re-band to six individual units in Band A, the monthly bill rose by 200 per cent to £3,671.29, including a 25 per cent single occupancy discount.

“It’s a significant difference and prevents landlords from being able to provide tenants with an affordable rental bill that is often inclusive of bills. The administration is also an added management strain on landlords, who have to notify the council every time a tenant changes, and we are hearing reports that councils continue to chase old tenants for payment, even when the landlords are often authorised at third party payers.

“If individual rooms are suddenly billed as a separate units for council tax purposes, tenants will undoubtedly see their rents increased or no longer benefit from the level of financial certainty of having one all-inclusive monthly housing cost.”

The property investment firm is strongly encouraging all HMO landlords to get in contact with their local MPs in order to support the amendment.

According to the firm, there are already more than 200 landlords who are in the midst of the process of filling out requests for support from local MPs but it is crucial that more landlords join the campaign in order to make highest possible impact.

You can find your local MP using the search function on the Parliament website.