London Borough of Merton

If you need help understanding the property licensing rules in Merton you have come to the right place! We are experts in housing regulation and have produced this free guide to help you understand the council’s property licensing schemes.

If you find that you need a licence for your rented property our support doesn’t end there. Our Landlord Suppliers Directory (view here) lists companies that offer a licence application handling service. You can also find companies offering a wide range of other goods and services to help you manage your property portfolio and achieve compliance.

Licensing Requirements

Do I need a licence to rent out my property?

There are currently three licensing schemes operating in Merton. We will 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 24 September 2023, 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 and is within the following council wards:

  • Colliers Wood
  • Cricket Green
  • Figge’s Marsh
  • Graveney
  • Lavender Fields
  • Longthornton
  • Pollard Hill

The additional licensing scheme continues for five years until 23 September 2028.

The House in Multiple Occupation definition is not straightforward and you need to study it carefully. For example, Merton Council seem to have included all ‘section 257 HMOs’ within their additional licensing scheme. These are properties that:

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

So a building containing both owner-occupied and rented flats may need one licence for the whole building. This is a complex area of law and you may need further advice.

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

3. Selective Licence

A selective licensing scheme covering the council wards of Figge’s Marsh, Graveney, Longthornton and Pollards Hill started on 24 September 2023. 

The selective licensing scheme continues for five years until 23 September 2028.

In this area, a selective licence is required for all private rented properties occupied by a single household or two unrelated sharers. 

This adds another layer of complexity as most landlords won’t be familiar with the ward boundaries and neither will tenants or agents. There is a postcode search facility on the council’s website to find your council ward.

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

How much does a licence cost?

In Merton, it depends on the type of licence you are applying for. 

Mandatory HMO Licence

The standard licence application fee for a shared house with five single person lettings is £1,774.88, payable in two instalments. The fee is higher if occupancy is higher. 

Renewal fees were previously charged at half the standard rate, but they now cost the same.

There is no sign of any fee discount for accredited landlords, which we think is a shame.

Additional licence

The standard licence application fee varies from £1,450 to £1,550 depending on whether the property has two, three or four bedrooms.

We understand the council is offering an early bird fee discount of approximately £150 for licence applications submitted during the first two months of the scheme.  

There is also a £50 discount for accredited landlords.

Selective licence

The standard licence application fee is £692 per property. 

We understand the council is offering an early bird fee discount of £69 for licence applications submitted during the first two months of the scheme.  

There is also a £50 discount for accredited landlords.

The fees were correct as of November 2023 but may be subject to change in the future. The current fees can be viewed on the council’s website.

How do I apply for a licence?

Merton Council have developed an in-house online application system which can be accessed via 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.

Are there any standards I need to comply with?

Yes, Merton Council has adopted HMO standards which all licensed HMOs must comply with. Unfortunately, last time we checked they had disappeared from the council’s website so you may need to request for a copy.

The HMO 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 apply throughout England to HMOs licensed under a mandatory HMO or additional licensing scheme.

How many properties has the Council licensed?

By May 2019, Merton Council had licensed 174 HMOs and another 108 applications were being processed.

Every council must keep a public register of licensed HMOs. Merton Council have told us their register is not available online as it keeps changing. But they did say that if you contact them direct they will email you a copy. Alternatively, you can book an appointment to view the register at their office.

Are there lots of unlicensed properties still out there?

In May 2019, Merton Council told us they think there are about 2,000 properties that need to be licensed under the mandatory HMO licensing scheme. This suggests many licensable HMOs are being operated with no licence application submitted, which is a criminal offence.

In June 2023, Merton Council estimated that over 5,000 properties will need licensing under their selective licensing scheme and over 1,000 will need licensing under their additional licensing scheme.

What happens if I don’t get a licence?

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.

Does the Council take much housing enforcement action?

In London, most boroughs publish information about housing prosecutions and civil financial penalties on the Mayor of London’s ‘Rogue landlord and agent checker’. You can search the database by entering a property address, landlord / agent name or by selecting the relevant borough, available here

How many accredited landlords are there?

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

Whilst we don’t have any figures for the NRLA scheme, 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 259 accredited landlords in Merton, which was the 2nd lowest out of all London boroughs.

January 2018: 271 accredited landlords
January 2019: 377 accredited landlords
January 2020: 403 accredited landlords
January 2021: 436 accredited landlords
January 2022: 757 accredited landlords

By January 2023 there were 1,126 accredited landlords which is below average 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!

Is the Council planning to introduce any new licensing schemes?

In November 2022, Merton Council contacted us to say they were consulting on plans for new additional and selective licensing schemes. The consultation was open until 22 January 2023 and you can find out more information by visiting the council’s website.

On 19 June 2023, Merton Council’s Cabinet Meeting approved new additional and selective licensing schemes (read here – agenda item 12). Both schemes came into force on 24 September 2023.

Do I need planning permission for my HMO?

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 will 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.

On 16 November 2022, Merton Council made an Immediate HMO Article 4 Direction covering seven wards on the east side of the borough. The council consulted on the Article 4 Direction until 22 January 2023 and the Direction was confirmed on 19 April 2023. You can find more information on the council’s website.

This means that from 17 November 2022, you need planning permission to change a single-family property (use class C3) to a small HMO shared by three to six unrelated residents (use class C4) in seven wards on the east side of the borough. In the rest of the borough, permitted development rights remain.

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.

Can you help me find the goods and services I need?

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. 

How do I find out more?

You can contact the council at: 

Housing Enforcement Team
Merton Council
Civic Centre
London Road
London SM4 5DX

Email: privaterented.licensing@merton.gov.uk
Tel: 020 8545 3212
Website: www.merton.gov.uk

Latest News

Consultations

There are currently no licensing consultations we are aware of in the London Borough of Merton

Schemes

Events

Opinion

At a Glance

Licence Overview

In Merton, mandatory HMO licensing applies borough wide. New additional and selective licensing schemes started on 24 September 2023.