You will almost certainly need a licence to rent out your property in Newham as the council operates borough wide mandatory HMO licensing combined with additional licensing and selective licensing schemes covering most of the borough. There are very few exemptions.
The borough wide additional and selective licensing schemes came into force on 1 January 2013 and operated for five years until 31 December 2017.
A replacement additional licensing scheme covering most of the borough came into force on 1 January 2018 and runs for five years until 31 December 2022.
A replacement selective licensing scheme covering most of the borough came into force on 1 March 2018 and runs for five years until 28 February 2023.
If you think you need a licence, you now 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:
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Shared houses and flats occupied by students and young professionals;
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Properties converted into bedsits with some shared facilities; and
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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
You will need an additional licence if your property is let as a House in Multiple Occupation that is not already covered by the mandatory HMO licensing scheme.
Up until 31 December 2017, the additional licensing scheme applied borough wide. From 1 January 2018, the scheme has excluded properties in the ‘E20’ area.
The House in Multiple Occupation definition is not straightforward and you will need to study it carefully. For example, Newham Council have included ‘section 257 HMOs’ within the remit of the licensing scheme. These are properties that:
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have been converted into self-contained flats; and
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less than two thirds of the flats are owner occupied; and
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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.
3. Selective Licence
Up until 31 December 2017, the selective licensing scheme applied borough wide. From 1 March 2018, the scheme has excluded properties in the ‘E20’ area.
You will need a selective licence if your property (house or flat) is let out to a single person, couple or single household and is located anywhere else in the borough.
Once you have obtained a selective licence, you cannot let the property out as an HMO as that requires a different type of licence.
In summary, if you let out private rented accommodation in Newham, you will need to get a licence for each property you rent out, unless it falls into one of the very few statutory exemptions or is within the E20 area. You can find a lot of useful information on the council’s website.