London Borough of Hackney

There is a high chance you will need a licence to rent out your property in Hackney although you need to study the arrangements carefully as one scheme only applies to part of the borough. We will try to explain.

On 1 October 2018, Hackney Council introduced a borough wide additional licensing scheme together with a selective licensing scheme that covers part of the borough. Both schemes will operate for five years.

There is also the mandatory HMO licensing scheme that applies across England. So in total, there are three separate licensing schemes.

If you think you may need a licence, you need to decide which one. We will try to help you choose the right licence for your property.

1. Mandatory HMO licence

You will need a mandatory HMO licence if your property meets the standard test, self-contained flat test or converted building test HMO definition in section 254 of the Housing Act 2004 and is occupied by five or more people.

But what are these tests and what does this mean in practice? It means you need a licence for any house or flat that is occupied by five or more people who are not all related and live in the property as their main home. For example, it includes:

• Shared houses and flats occupied by students and young professionals;
• Properties converted into bedsits with some shared facilities; and
• Properties converted into a mixture of self-contained and non self-contained accommodation.  

Prior to 1 October 2018, the mandatory HMO licensing scheme only applied to properties that were three or more storeys in height, but that restriction has now been lifted.

The government have decided to exclude purpose built self-contained flats within a block comprising three or more self-contained flats from the mandatory HMO licensing scheme. While this will be good news for some landlords, it does make the licensing scheme far more complicated.

To find out more, you can read our free guide to mandatory HMO licensing (here).

2. Additional licence

From 1 October 2018, you need an additional licence if your property is let as a House in Multiple Occupation that does not fall within the remit of the mandatory HMO licensing scheme. Licensing applies to almost all HMOs in Hackney.

The House in Multiple Occupation definition is not straightforward and you will need to study it carefully or seek advice. For example, Hackney Council have included ‘section 257 HMOs’ within the additional licensing scheme. These are properties that:

a) have been converted into self-contained flats; and
b) less than two thirds of the flats are owner occupied; and
c) the conversion did not comply with the relevant Building Regulations in force at that time and still does not comply.

In Hackney, the council only license section 257 HMOs if all the flats within it are privately rented. This is a complex area of law and you may need further advice.

3. Selective Licence

From 1 October 2018, you need a selective licence if your property (house or flat) is let out to a single person, couple or single household and is located in the council wards of Brownswood, Cazenove and Stoke Newington.

If you are unsure which ward your property is in, you can check on the council’s website.

If you rent a property to a single household in other parts of the borough, the selective licensing scheme does not apply.

In summary, if you rent out a House in Multiple Occupation in Hackney, it will need to be licensed. If you rent out a property to a single family, it will need to be licensed if it is in the council wards of Brownswood, Cazenove and Stoke Newington.

Hackney Council licence fees vary according to the type of licence application and they have recently increased to coincide with the new licensing schemes.

Mandatory HMO and additional licensing

The standard fee is £950 per property, with a reduced rate of £875 for accredited landlords.

The fee was previously £750 for a three storey shared house with five single person lettings (£150 per household in 2017/18, £146 per household in 2014/15).

Selective licensing

The standard fee is £500 per property, with a reduced rate of £425 for accredited landlords.

The fees we have listed are correct as of May 2020 and could be subject to change in the future. The fees can be viewed on the council’s website.

There is an online application system that can be accessed on the council’s website.

If you need assistance with your licence application, you can find companies offering a licence application handling service in our Landlord Suppliers Directory (here). Whilst we do handle some applications, we have limited capacity and specialise in more complex cases where we provide our clients with expert advice and assistance.

It is important to remember that submitting a licence application is only the start of the licence approval process. To help landlords understand what happens next, we have published a free guide here.

The council’s private rented property licensing accommodation standards can be downloaded from the council’s website. When you click on the link, you need to scroll down to find them listed under ‘Resources for Landlords’.

The standards cover a range of issues such as kitchen, bathroom and toilet facilities, fire precautions, heating, lighting, ventilation and room sizes.

It is important to note that new absolute minimum bedroom sizes for licensed HMOs have been introduced for HMO licence applications approved on or after 1 October 2018:

• 4.64m2 for a child under 10 years old
• 6.51m2 for one person over 10 years old
• 10.22m2 for two people over 10 years old

The council can still ask for larger minimum sizes. These new minimum sizes will apply throughout England to HMOs licensed under a mandatory HMO or additional licensing scheme.

In March 2015, Hackney Council told us they had licensed 179 HMOs. We checked again in February 2016 and found they had licensed 189 properties and the same figure was shown in December 2016. In March 2018, the council reported there were 193 licensed HMOs. 

In May 2019, the council told us they had approved 120 mandatory HMO licences, 89 additional licences and zero selective licences. They told us another 3,274 licence applications were currently being processed.

Hackney Council keeps a public register of licensed HMOs which is available to view on the council’s website.

In May 2019, Hackney Council told us there could be about 990 properties that need licensing under the mandatory HMO licensing scheme, 3,300 under their additional licensing scheme and 4,100 under their selective licensing scheme.

If you are the landlord of a licensable but unlicensed property, you should act now to avoid the consequences.

Ignore the law and you could pay a heavy price. You risk being prosecuted by the council and if found guilty you could get a criminal record, be fined an unlimited amount and ordered to pay court costs and a victim surcharge.

Alternatively, the council can issue you with a civil penalty notice of up to £30,000 for not having the correct licence without any warning being given, so this is really serious stuff.  

You could also be subject to a Rent Repayment Order and may have to repay up to 12 months rental income.

Whilst the property is unlicensed, you can’t use a Notice of Seeking Possession under Section 21 Housing Act 1988 to evict your tenants. 
  
And following a successful prosecution, you would probably fail a fit and proper person assessment, making it very difficult for you to obtain a property licence in the future.

Don’t put your livelihood and reputation at risk. Make sure you comply with the law.

Hackney Council told us they took six housing prosecutions over the three years from April 2011 to March 2014, so on average two housing prosecutions a year.

Hackney Council did not obtain any Rent Repayment Orders from the landlords of unlicensed HMOs over the five years from April 2011 to March 2016 based on data published by the Courts and Tribunals Judiciary. 

For all the latest information, you can search for housing prosecutions on the Mayor of London’s ‘Rogue landlord and agent checker’, available here. 

There are landlord accreditation schemes operated by the London Landlord Accreditation Scheme, the National Landlords Association (NLA) and the Residential Landlords Association (RLA).  

Whilst we don’t have any figures for the NLA or RLA schemes, we have got information about the London Landlord Accreditation Scheme that is supported by all the London Boroughs. In January 2016, they told us there were 592 accredited landlords in Hackney. 

By January 2018, there were 834 accredited landlords, by January 2019 there were 991 accredited landlords and by January 2020 there were 1,105 accredited landlords, which is in the top five when compared to all the London boroughs. To find out more about becoming accredited, you can visit the London Landlord Accreditation Scheme website here. 

In addition to training and development, accredited landlords are entitled to various benefits, including discounted licensing fees in some boroughs. If you are not already a member, we would encourage you to think about joining! 

New licensing schemes were introduced in October 2018. Hackney Council carried out a preliminary consultation about the private rented sector from 26 January to 3 March 2015. The council said they were considering whether to introduce an additional or selective licensing scheme although there weren’t any firm proposals at that stage.

In August 2015, Hackney Council published a report suggesting the council should explore scope for an additional HMO licensing scheme and also possibly a HMO Article 4 Direction to restrict new HMO developments. The study found no strong link between the private rented sector and problems of anti-social behaviour.

From 18 September to 3 December 2017, the council consulted on plans for an additional licensing scheme for all HMOs and a selective licensing scheme for all privately rented properties, in Brownswood, Cazenove and Stoke Newington wards. You can read more information on the council’s website.

On 19 March 2018, the council’s Cabinet meeting (view here) approved plans for additional and selective licensing schemes and the schemes came into force on 1 October 2018.

There is clearly a lot happening at Hackney so we will monitor the situation and keep you posted. For all the latest news, sign up to our free newsletter.

You will need planning permission if you are changing your property from a single-family property to a house in multiple occupation (HMO) occupied by more than six people. HMOs occupied by more than six people fall within ‘sui-generis’ use for which planning permission is required. You also need planning permission if you a splitting up a property into smaller self-contained units of accommodation.

For small HMOs, the rules are a bit more complicated. HMOs occupied and shared by between three and six people fall into planning use class C4 whereas single-family properties fall into planning use class C3.

In May 2020 we checked the Hackney Council website and found no mention of an HMO Article 4 Direction.

This means that you do not need planning permission for a change of use from a single-family property (use class C3) to a small HMO shared by three to six unrelated residents (use class C4), although the situation could change in the future.

Remember that this is only intended as general advice and no liability can be accepted for any reliance upon information provided. We would strongly encourage you to contact the Council’s Planning Department or seek independent legal advice before you start a new HMO development. To find out more information about Article 4 Directions, you can visit the council’s website.

We certainly can. We understand the challenges of being a private landlord and so we have developed a Landlord Suppliers Directory to provide you with access to the goods and services you need. The Directory concentrates on businesses that operate in the London area.

Whether you a looking for a letting agent, want a property inventory for a new tenancy or fire risk assessment, we have got it covered – and far more besides!

As the leading experts in property licensing, we also offer a range of services ourselves. From handling the licence application process to advice on new HMO developments, we can help to ensure your property business remains compliant. If you need assistance, please drop us a line and see if we can help! 

New suppliers are regularly being added and we would encourage you to take a look. Some of our featured listings also contain YouTube videos, helping you to find out more about the business. 

You can contact the council at: 

Property Licensing Team
Hackney Council
2 Hillman Street
London
E8 1FB

Email: property.licensing@hackney.gov.uk
Tel:     020 8356 4866
Website: www.hackney.gov.uk