Campaigns Regulation and Enforcement

Extension of mandatory HMO licensing set for October 2018

Victoria Barker
Written by Victoria Barker

The Government has confirmed that the extension of mandatory HMO licensing is due to come into force form 1st October 2018, subject to Parliamentary approval.

The regulations bring purpose built flats where there are up to two flats in the block, into the scope of mandatory licensing. They also remove the three storey rule -at present mandatory licensing applies to HMOs of at least three storeys and five occupants comprising of two or more family units.

How will it affect me?

Research from RLA PEARL has found that 16% of landlords rent to people in HMOs.  It is estimated that an additional 177,000 HMOs will become subject to mandatory licensing in England as a result of this extension.

Properties will be subject to mandatory licensing if they meet the following criteria:

  • It is occupied by five or more persons;
  • is occupied by persons living in two or more separate households; and
  • meets—
    • the standard test under section 254(2) of the Act;
    • the self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats; or
    • the converted building test under section 254(4) of the Act.

The Order, which can be read here applies to HMOs in England, but does not apply to converted blocks of flats, to which section 257 of the Act applies. These are buildings that have been converted into and consist of self-contained flats where the building work undertaken in connection with the conversion did not comply with the appropriate building standards and still does not comply with them, and less than two-thirds of the self-contained flats are owner-occupied.

What happens to HMOs currently licensed under additional licensing

HMOs affected that are currently licensed under an Additional Licensing scheme will be passported to the mandatory scheme.  We are waiting on the Government making the regulations relating to minimum room size, and will update members when we get that information.

No grace period

The government previously announced that there would be a Grace period of sixth months. This is now not the case. All must apply for a licence by 1st October 2018.

The RLA believes many of the changes are unnecessary and says they will put a huge strain on local authorities. The Association made its points in its formal response to the Government consultation.

About the author

Victoria Barker

Victoria Barker

Victoria is the Communications Officer for the RLA.

She is responsible for producing articles for our Campaigns and News Centre, the weekly E-News newsletter and media review, and creating social media content. She also contributes to our members magazine, Residential Property Investor.

19 Comments

  • Could someone please define ‘person’ in the context of a property being occupied by FIVE or more persons?
    if this includes family members then we will need an HMO for all those tenancies where there is a family with three children.
    Alternatively if ‘persons’ includes only those over a certain age as would seem logical, then we still have a problem when the youngest arrives at the age of becoming a ‘person’. We would need to know the age of the youngest so that we can apply for an HMO licence on their relevant birthday.
    Did anyone in HMG think this through – or am I being overly cynical again?

    • 2 or more separate households. A house is not a HMO. Even if 5 PERSONS are living there. So maybe you are being over cynical!

  • I think you are reading “if they meet the following criteria” as meeting any or all.

    As I read it, If all the tenants are within one family then they don’t meet the criteria. It is a family home and not Multiple occupants.

  • Keep a careful eye on the minimum room size issue. We’ve all heard about the 6.52 square meter minimum, but the government intends to give freedom to local authorities to go higher – and many are intending to do just that.

    HMO landlords face the prospect that having ensured their rooms were all at least 6.52 (it’s been mooted for years), their own local authority will come along and say “sorry guys – the minimum in this area will now be 8 sq meters!” Worse still, a Tory local authority (say) may set the minimum at 6.52 and then one day, there’s a local election and a Labour authority takes over (say) and says their going to raise the minimum. Landlords will no longer have the certainty that the configuration of rooms in their HMO will be future-proof.

    You will also have the silly situation in London, for example, where on one street you’ve got 6.52 min size and the street next door in a different borough has a higher size.

    This unpredictability could cost landlords a fortune and chill investment. RLA needs to highlight these dangers to government and ensure that any local authority discretion is set within tight boundaries, otherwise there will be chaos.

  • Could anyone help please?

    If a house is rented to 4 unrelated individuals in a two story house, would this now require a licence?

    Many thanks
    Lucas

  • 2 seprate flats. one couple in one flat.2nd couple with one year old childin other .does it count 5 persons and need licence?

    • We would need more details before we could answer the question, it would depend on whether it was a conversion and on a couple of other details. If you are a member you can contact our advice team on 03330 142 998

  • Will 5 tenants let on a joint tenancy agreement be regarded as separate households and therefore be licensable

  • The lack of a grace period shows total ineptitude on behalf of the Govt.. A significant proportion of HMOs which are currently outside the licensing requirements relate to student accommodation. The student letting cycle begins in Jan / Feb when students (usually 2nd / 3rd year) secure their accommodation for the following academic year. What happens then if a letting has already been committed where the property is subject to a mortgage that prohibits occupation under a licensable HMO ? The landlord is therefore stuck between breaching mortgage conditions or breaching an agreement to let or committing a criminal act of not applying for a license ! Comments / thoughts welcome.

    • Its a really good question. I’m already in this difficult situation where last week I placed 5 for the new academic year. This is always so unfair and has popped up by surprise.
      Now I will have to evict one of the tenants.

  • Can local authorities charge whatever they like for issuing HMO licenses? I have 3 HMOs, one is already ‘high risk’ and therefore licensed, they used to charge £150 to issue the license but when it emerged that all HMOs will require a license they increased the fee to £500. The neighbouring authority on one side charges no fee at all and on the other side the fee is £900. My authority claims it involves 30 hours work for them, from what I can see it would be more like 3 hours… So it’s looking like a stealth tax on landlords. Can I challenge the level of the fee?

    • Hi John, the Supreme Court has held that councils are expected to justify the fees they charge for any licensing scheme and these fees are limited to the administration of the licensing scheme itself. If you believe the fee level isn’t justified then you are able to challenge the fees though you should obviously seek legal advice before proceeding as to whether it is worthwhile.

  • Could anyone please tell me how this would affect Property Guardian companies, where they have us pay a low rate per month for a rolling one month ‘licence for non exclusive occupation of a space in ‘usually a vacant commercial property, ex schools, ex hospitals and ex care homes etc 5 -50 people usually..

  • My son at Uni lives in a house which we purchased. I’m uncertain where we stand as he has 5 housemates. I’m told by the local authority that he is the resident landlord and therefore the others are not tenants but lodgers. Do the new HMO regs require either him or me to get a licence?

    • Hi Mike, It is possible to have an HMO as a live-in landlord. As a live-in landlord, you are allowed two ‘non family’ lodgers before your property is classed as an HMO. In this case there are five, so you would need a licence. You should also contact the planning department as (depending on how the building was used before – ie was it a family home etc?) there could be issues over change of use. If you would like to discuss the issues in more details please contact our advice team on 03330 142998.

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