Government to expand the mandatory HMO licensing scheme throughout England in 2018

Sunday, January 7th, 2018 - DCLG

London Property Licensing - legislation set to change in 2018

The government have confirmed their intention to expand the mandatory HMO licensing scheme, with the changes expected to come into force in 2018, subject to Parliamentary approval. Across England, it is expected an extra 160,000 Houses in Multiple Occupation (HMOs) will need to be licensed.

In a statement issued on 28 December 2017, Housing and Planning Minister Alok Sharma said:

Every tenant has a right to a safe, secure and decent home. But some are being exploited by unscrupulous landlords who profit from providing overcrowded, squalid and sometimes dangerous homes.

Enough is enough and so I’m putting these rogue landlords on notice – shape up or ship out of the rental business. Through a raft of new powers we are giving councils the further tools they need to crack down on these rogue landlords and kick them out of the business for good“.

This latest announcement follows a government HMO licensing consultation that took place in late 2016 (read here). The government received 395 responses from a range of organisations and individuals across the sector and published their response on 28 December 2017.

The proposed changes involve extending mandatory HMO licensing to include most houses and flats occupied by five or more people in two or more households who share kitchen, bathroom and/or toilet facilities, regardless of the number of storeys.

The government have decided to exclude self-contained flats in purpose built blocks, unless the block comprises a maximum of two flats. This will exclude purpose built student halls of residence and many build-to-rent schemes. As an example, a tenth floor flat occupied by five or more friends will not need a mandatory HMO licence. If the same people lived in a ground floor flat in a converted building, a licence would be required.

Following the tragic Grenfell Tower fire, many people may be surprised that high occupancy multi-occupied flats in high rise blocks are to be excluded from the licensing scheme.

Six-month timescale for applications to be submitted

The government have said landlords will be given six months to apply for a licence before any enforcement sanctions are imposed. During that time, councils will be expected to publicise the licensing scheme and start to process and approve applications.

During the initial six months, landlords will be unable to issue a Section 21 notice of seeking possession to evict any tenants until an application has been submitted or temporary exemption applied for.

Exactly when the six month period will start is not yet known. The earliest date is likely to be April 2018.

New minimum room sizes to be introduced

London Property Licensing - new minimum HMO room sizes 2018

The government has confirmed they will introduce new minimum room sizes for all bedrooms within licensed HMOs and have widened the proposal to include a new minimum room size for a child under 10 years old:

  • No occupation permitted: 4.63m2 or less
  • Child under 10 years old: 4.64m2 to 6.50m2
  • One adult: 6.51m2 to 10.21m2
  • Two adults: 10.22m2 or more

The government have reiterated these would be absolute minimum sizes and each local authority would retain discretion to impose higher (but not lower) standards having regard to the layout, space and amenities in the property.

For the purpose of calculating ‘useable floor area’, any space where the ceiling height is below 1.5m2 will be excluded although the government are not intending to publish a full ‘useable floor area’ definition. Instead, they will let local councils make their own interpretation.

Where a room does not meet the minimum requirements, the local authority will be required to give the licence holder a reasonable period of up to 18 months to remedy the issue. In practice, this is likely to involve evicting tenants living in under-sized rooms, which may lead to an increase in homelessness.

Whilst the new minimum sizes will apply to most licensable HMOs, the government is proposing to exclude certain hostels and temporary accommodation from the new minimum size requirements.

Landlords will not be required to undergo criminal record checks

Having listened to feedback, the government have decided not in insist that all HMO licence applicants undergo formal criminal record checks, particularly as councils will be able to cross reference applicants’ details against the new national rogue landlord database.

However, councils will retain discretion to require criminal record checks. Within the London area, the Royal Borough of Greenwich is believed to be the only council that insist on checks through Disclosure Scotland as part of the licence application process.

New mandatory licence condition for waste disposal

A new mandatory licence condition will be introduced requiring the licence holder to comply with the local council’s arrangements for the storage and disposal of household waste.

No automatic discounts for purpose build student accommodation blocks

The government have decided not to impose discounted licence application fees for purpose built student accommodation blocks and have accepted that any such arrangements should be at the discretion of the local council.

We have also published a free guide to mandatory HMO licensing that you can find here.

Landlords and letting agents concerned about the changes and the potential impact on their business can contact London Property Licensing to obtain expert advice and support (here).

A licence application handling service is also available in the London area, details here.

For all the latest news and events, you can sign up for the free London Property Licensing newsletter here.