London Borough of Tower Hamlets

You need to study the arrangements carefully as there are three different licensing schemes in Tower Hamlets.

You may need a licence if you rent your property to a single family or individual as Tower Hamlets Council have implemented a selective licensing scheme in certain parts of the borough. The scheme came into force on 1 October 2016 and last for five years until 30 September 2021.

If you rent your property as a House in Multiple Occupation (HMO), you will need to get it licensed under either the additional licensing scheme, the selective licensing scheme or the mandatory HMO licensing scheme that applies throughout England. The additional licensing scheme starts on 1 April 2019.

If you think you may 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:

• 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

The additional licensing starts on 1 April 2019 and continues for five years until 31 March 2024, unless the council decide to implement a replacement scheme.

It applies to all HMOs in the borough that are occupied by three or more people, except for those in the pre 2014 wards of Weavers, Whitechapel, Spitalfields and Banglatown. In effect, the scheme excludes the area already covered by their selective licensing scheme.

The council have included ‘section 257 HMOs: certain converted blocks of flats’ in the scheme. These are properties that:

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

The council have simplified things slightly by restricting the licensing of section 257 HMOs to situations where all the flats are privately rented. This is a complex area of law and you may need further advice.

3. Selective licence

You need a selective licence if your property (house or flat) is let out to a single person, couple or single household in Whitechaple, Weavers, Spitalfields and Banglatown, based on the council ward boundaries that existed pre 22 May 2014 – in the west of the borough.  

The selective licensing scheme will also apply to most HMOs in that area that are not already licensed under the mandatory HMO licensing scheme.

To find out if your property is in one of these areas, you can carry out a postcode search on the council’s website. 

It depends on what type of licence you are applying for.

Mandatory HMO licensing

The fee is £525 (£520 in 2015/16, £422 in 2014/15) for the property plus £35 (£29 in 2014/15) for each habitable room. So it would cost £700 for a three storey shared house with five single person lettings and no communal living room. 

Whilst the fee rates are below average for the London boroughs, it does say on the website that you need to re-licence after three years rather than the five year licences issued by most councils.  

Additional licensing

The fees for additional licensing have not yet been published on the council’s website. The Cabinet report indicates it will be a two-stage fee payment totalling £551, although we are awaiting clarification from the council.

Selective licensing

The fee is £520 for an online application, increasing to £660 if you apply by post and do not include all the information requested. Licences will normally be issued for 5 years, although if two warning letters have been sent, the council say you will only receive a 1 year licence.

The website doesn’t list any discount for accredited landlords, which we think is a shame.

The fees we have listed are correct as of February 2019 but could be subject to change in the future. You can view the mandatory HMO licensing fees here and the selective licensing fees here. 

A new online application process has been introduced covering both the mandatory HMO and selective licensing schemes. We assume the same form can be used for the additional licensing scheme, although this was not clear last time we checked. You can apply by visiting the council’s website and clicking on the ‘Apply for a selective or mandatory Landlord Licence or temporary exemption’ link.

You will need to submit various supporting documents with your application so it is important to read the instructions carefully and make sure you’ve got all your paperwork ready.  

If you need assistance with your licence application, we can help you. We offer a unique hassle-free, one-stop-shop service to handle your licence application from start to finish and all for a fixed fee. As part of the service, we carry out an inspection of your property and provide expert advice on compliance. You can find out more about our licence application handling service here.

You can also find other companies offering a licence application handling service in our Landlord Suppliers Directory (here).

Yes, new private rented housing property standards have recently been published on the council’s website. When you click on the link, you can find them listed under ‘Useful guidance/documents’.

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.

By February 2016, the number had risen to 201. By February 2017, there were 273, by March 2018 there were 292 and by November 2018 there were 316 licenced HMOs listed in the public register. 

In February 2017, the council told us they had received approximately 2,100 applications under the selective licensing scheme of which about 1,000 have already been approved. By March 2018, the public register listed around 3,350 selectively licensed properties and by October 2018 the council said they had received about 5,000 applications.

Tower Hamlets Council keeps a public register of licensed properties that is regularly updated. You can view the HMO licensing register here and the selective licensing register here. Once you click on the link, scroll down to the ‘Public Register’ section where you can download a copy.

Yes, there do seem to be. In March 2015, Tower Hamlets Council told us they think there could be about 1,400 properties that are covered by the mandatory HMO licensing scheme.

In a Cabinet report dated 31 October 2018, the council anticipate a further 9,000 properties will require licensing under the council’s new additional licensing scheme.

The council also think there could be around 6,000 properties that need licensing under the new selective licensing scheme, so there are still thousands of properties where no licence application has yet been submitted. It shows there is a huge amount of work still to be done.

If you are one of those landlords operating without a licence, you should apply 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. We can help you get your property licensed! (find out more) 

Tower Hamlets Council told us they had took thirteen successful housing prosecutions over the three years from April 2011 to March 2014. A further two prosecutions were taken in 2014/15, two in 2015/16 and six in 2016/17, so they are quite busy when it comes to enforcement action.

We expect this uplift in housing prosecutions will continue with so many unlicensed properties still out there.

Tower Hamlets Council did not obtain any Rent Repayment Orders from the landlords of unlicensed HMOs over the six years from April 2011 to March 2017. This is 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 618 accredited landlords in Tower Hamlets, which was the 8th highest out of all London boroughs.

By January 2018, that figure had increased to 725 and by January 2019, that figure had increased to 897, which is well above 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! 

Yes, the council recently carried out a consultation on plans for an additional licensing scheme that would cover most of the borough, except for the area already covered by selective licensing. The consultation took place from 1 March to 24 May 2018 and the additional licensing scheme is set to start on 1 April 2019.

There is clearly a lot happening in Tower Hamlets so we will monitor the situation closely and will keep you posted.

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.

In February 2017, we checked with Tower Hamlets Council and found that there is currently no HMO Article 4 Direction in force.

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. You can find out more information about Article 4 Directions on 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: 

Health & Housing Team
Tower Hamlets Council
Mulberry Place
5 Clove Crescent
London E14 2BG

Email: housinglicensing@towerhamlets.gov.uk
Tel:      020 7364 5008
Website: www.towerhamlets.gov.uk