Lewisham Council approve new landlord licensing schemes and extend HMO planning restrictions

Monday, April 6th, 2020 -

The London Borough of Lewisham has approved plans to implement new additional and selective property licensing schemes that will extend licensing to thousands more private rented properties.

The council currently operate the mandatory HMO licensing scheme plus a borough wide additional licensing scheme that includes all Houses in Multiple Occupation (HMOs) above commercial premises.

According to the council, the two licensing schemes will result in better property standards and property management practices, with less antisocial behaviour and crime associated with licensed properties.

The council has also withdrawn permitted development rights to convert a single family property (use class C3) into a HMO with 3 to 6 occupants (use class C4). The HMO Article 4 Direction applies to the council wards of Bellingham, Downham, Grove Park and Whitefoot and came into force on 7 March 2020.

Mayor and Cabinet approve new landlord licensing schemes

On 11 March 2020, Lewisham Council’s Mayor and Cabinet meeting considered a report proposing new borough wide additional and selective licensing schemes.

The report noted there are approximately 32,000 private rented properties within the borough, equating to about a quarter of the housing stock. A public consultation on plans to implement new licensing schemes took place from 28 May to 21 August 2019.

According to the council, 1,831 people responded to the consultation. Whilst 60% of respondents supported the additional licensing proposal, support dropped to 26% amongst 411 private landlords and just 10% amongst 88 HMO landlords.

Whilst 53% of respondents supported the selective licensing proposal, support dropped to just 10% amongst 411 landlords.

In response to the consultation, the council have dropped proposals to link the selective licence application fee to the council tax band. They have committed to developing a mediation service to support landlords and tenants and will also roll out training for tenants on sustaining tenancies and understanding their rights and responsibilities.

6,000 HMOs will need to be licensed

Having considered the report, Lewisham’s Mayor and Cabinet approved plans for a new borough additional licensing scheme which will extend licensing to an estimated 6,000 HMOs. The scheme will include all shared houses and flats occupied by three or more people who are not all related.

The council have said their current additional licensing scheme will be subsumed by the new scheme and landlords of existing licensed HMOs can pay a fee to transfer their licence to the new scheme.

Whilst the report says the additional licensing scheme will include all HMOs, the draft scheme designation published alongside the report excludes section 257 HMOs (certain converted blocks of flats). London Property Licensing has requested clarification from the council on whether or not these properties will be included in the scheme.

The draft scheme designation circulated with the Cabinet report was dated 11 March 2020 and indicates the scheme would come into force on 4 August 2020. However, following the COVID19 outbreak and government advice to pause all new licensing schemes (read here), it is unclear whether implementation of the scheme will now be delayed.

Borough wide selective licensing

Alongside additional licensing, Lewisham’s Mayor and Cabinet approved plans for a borough wide selective licensing scheme covering all other private rented homes – an estimated 26,000 properties.

Since 2015, all selective licensing schemes extending across more than 20% of the borough or 20% of private rented homes have required approval by the Secretary of State (read here). Seeking approval will be the next challenge before the scheme can be implemented.

Licence application fees to fund the estimated £21 million cost

The standard additional licensing fee will be £500 per bedroom or ‘lettable unit’, resulting in a fee of £2,000 for a four-person shared house.

The standard selective licensing fee will be £640 per property.

Some discounts with be available including a 20% fee discount during an early bird application period before the scheme comes into force.

The council estimate the running costs for the two licensing schemes will be £21.07 million, with full costs to be recovered from licence application fees paid by local landlords.

According to the report, the council’s existing licensing team will be expanded from 22 to 29 officers to implement the new additional licensing scheme.

A further 29 posts will be created to operate the selective licensing scheme. The report says 11 landlord liaison and partnership officers will be recruited to work with landlords to help them address crime and anti-social behaviour.

All private rented properties to be inspected

Lewisham Council have said they are committed to inspecting every licensable property as an integral part of the new licensing schemes.

The council have said that all HMOs will be inspected before issuing a licence and all other private rented homes will be inspected during the five-year life of the scheme. The council say they will have the staffing resources needed to inspect an estimated 32,000 private rented homes.

It is unclear if the council will be successful in delivering on this stretching target. In the London Borough of Croydon which implemented borough wide selective licensing in 2015, the council recently announced they had granted 35,000 licences but had only inspected about a third of the properties (read here).

London Property Licensing will continue to monitor the licensing arrangements and will publish further updates as they become available.

A free guide containing more detailed information about property licensing and the new HMO planning restrictions in the London Borough of Lewisham is available here.

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