Government invites comments on mandatory HMO licensing extension

A picture of a terraced HMO property

Proposed reform could see many more properties in England come under the scope of mandatory HMO (house in multiple occupation) licensing.

The government has published a technical discussion paper on the extension of mandatory licensing of houses in multiple occupation and has welcomed views from individuals and organisations on the proposals they have outlined.

The document includes proposals to extend the scope of mandatory licensing, as well as streamline the licence application process. Those who wish to offer their comments should do so using the online form by 18 December.

Some HMOs are already subject to mandatory licensing

An HMO is defined by the Housing Act 2004 (s. 254) as a house share occupied by three or more renters who form more than one household and share common facilities such as bathrooms and kitchens. The government estimates that there are some 463,000 HMOs in England.

Large HMOs and selective licensing

Under the 2004 Act, only large HMOs are subject to mandatory licensing. An HMO is considered to be large if it is at least three storeys high and occupied by five or more tenants who do not form a single household. Local authorities can also introduce selective licensing for smaller HMOs at their discretion.

For more information on HMO licensing, see Homes in Multiple Occupation Licence

The government wants to make more properties licensable

Tackling ‘sub-standard and dangerous’ housing

In its rationale for changing current licensing law, the government recognises traditional bedsit HMOs as being one of the main sources of housing for vulnerable groups such as tenants on low incomes and/or in receipt of benefits, as well as students and foreign nationals.

Despite the fact that many landlords “do an excellent job” of managing their “more demanding” HMO properties, the government argues that a number of landlords exploit their tenants by renting dangerous and sometimes overcrowded accommodation. It also contends that problems are not limited to urban areas and ‘traditional’ HMOs.

The government intends to implement the changes during 2016.

Smaller properties (one and two storey buildings)

The government believes that there is a case for extending licensing to two-storey HMOs. It also argues that introducing licensing for single storey HMOs will allow local authorities to target buildings such as converted garages, which are thought to be commonly employed by so-called ‘rogue’ landlords.

The five occupant threshold is deemed sufficient

Nevertheless, the government does not consider it necessary to lower the threshold of five people in two or more households, as properties housing fewer than five occupants are deemed lower risk.

This means that two and possibly one storey buildings with five or more occupants who form more than one household will be licensable, but the licensing of HMOs with four or fewer unrelated occupants will still be at the discretion of the local authority.

Shared flats above and beneath businesses will also be included

Flats above and beneath business premises are thought to pose a greater fire safety risk, but currently are only licensable if the whole property comprises three or more storeys.

Reducing the height threshold to two or more storeys will also bring more HMOs in mixed-use properties, irrespective of the number of occupants, under mandatory licensing.

But flats in residential blocks will remain exempt

The government believes that flats in residential blocks are already sufficiently protected against misuse by the terms of the long leases upon which they are typically owned, which often prohibit allowing the occupants to cause a nuisance to other residents in the block.

Section 257 – ‘poorly converted’ blocks of flats

Section 257 of the Housing Act 2004 introduces a special category of HMO. It describes a property or part of a property that has been converted into a block of self-contained flats, but:

  • The conversion work did not (and still does not) comply with appropriate building standards; and
  • More than one third of the flats are rented rather than owner-occupied

The government argues that poor conditions in such properties could be tackled by introducing mandatory licensing.

National minimum room size

Most local authorities set their own room size standards; however, a recent ruling by the Upper Tribunal (Lands Chamber) in Clark v Manchester City Council held that such standards are not legally binding.

In order to prevent appeals against local authority rulings that the government claims will waste local authority and tribunal resources, the government has proposed introducing a statutory minimum room size. This is likely to be 6.5m2 (70 ft2), as per the space standard as set out section 326 of the Housing Act 1985.

Revoking the exemption for HMOs let to family members

Under The Selective Licensing of Houses (Specified Exemptions) (England) Order 2006, HMOs are exempt from mandatory licensing if the tenants are related to the landlord. The government believes that this exemption has been abused and proposes its removal.

Streamlining the applications and renewals process

The government has invited comments on whether or not all of the information currently required for an HMO license application is necessary, whether it is exhaustive, and whether it could be given in a simpler way.

It also proposes that information be given only once by landlords who are submitting multiple applications within a short period. This could potentially streamline the application process for landlords who own large numbers of HMO properties in the same local authority area.

How to respond to the consultation

The consultation is open to individuals and organisations in England, where the new rules will apply if passed.

Individuals who wish to respond to the consultation should first read the technical discussion document, extending mandatory licensing of Houses in Multiple Occupation (HMOs) and related reforms, on the GOV.UK website.

They can then respond using the online form, which can be found here

Respondents have until 18 December 2015 to submit their comments.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.