London Borough of Tower Hamlets

If you need help understanding the property licensing rules in Tower Hamlets 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.

To help set the scene, the London Borough of Tower Hamlets is in East London covering an area of 8 square miles. It is bordered by the boroughs of Hackney to the north, Newham to the east, the City of London to the west and with the River Thames to the south. According to the 2011 Census about 33% of the housing stock was privately rented which is significantly above the London average of 25% (1 in 4).

Do I need a licence to rent out my property?

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 started 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 scheme started 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 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

How much does a licence cost?

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

Mandatory HMO licensing

The fee is £547.50 (was £538 in 2019/20, £525 in 2018/19, £520 in 2015/16, £422 in 2014/15) for an online application plus £37 for each habitable room. So, it would cost £732.50 for a shared house with five single person lettings and no communal living room.

It says you must pay a £32 administration fee if you want to pay the application fee in two instalments.

Whilst the fee rates are below average for the London boroughs, it says on the website you need to re-licence after three years rather than the five year period adopted by most councils.  

Additional licensing

The fee is £529.50 (was £520 in 2019/20) for an online application, with an extra £32 administration fee if you want to pay the application fee in two instalments.

Selective licensing

The fee is £542 (was £532.50 in 2019/20, £520 in 2018/19) for an online application. We understand that 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.

For all three licensing schemes, there are various extra charges if you submit a partial application or apply by post.

The fees we have listed are correct as of June 2020 but could be subject to change in the future. You can view the licence application fees on the council's website.

How do I apply for a licence?

An online application process has been introduced for the mandatory HMO, additional and selective licensing schemes. You can apply by visiting the council’s website.

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, 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, the council's private rented housing standards were updated in February 2019 and have been published on the council’s website. When you click on the link, you can find them listed under ‘Property Licensing Conditions’ at the bottom of the page.

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?

The number of licensed HMOs has been gradually increasing. In March 2015, Tower Hamlets Council told us they had licensed 132 HMOs. 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.

In May 2019, the council told us they had approved 305 mandatory HMO licences, 20 additional licences and 5,190 selective licences and a further 1,991 licence applications were being processed.

Tower Hamlets Council keeps a public register of licensed properties that is regularly updated. Unfortunately, when we last checked in June 2020, it had disappeared from the council’s website.

Are there lots of unlicensed properties still out there?

Yes, there do seem to be. In May 2019, Tower Hamlets Council told us they think there could be 361 properties that require a licence under the mandatory HMO licensing scheme, a further 9,000 properties that require a licence under the additional licensing scheme and 6,000 properties that need licensing under the selective licensing scheme.

This does suggest there are still thousands of properties where no licence application has yet been submitted. If you are one of those landlords operating without a licence, you should apply now to avoid the consequences.

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?

Tower Hamlets Council told us they 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

How many accredited landlords are there?

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, there were 725 accredited landlords, by January 2019 there were 897 accredited landlords and by January 2020 there were 973 accredited landlords, 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! 

Is the Council planning to introduce any new licensing schemes?

The council consulted 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 came into force on 1 April 2019. There is also a selective licensing scheme that cane info force in 2016.

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

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 24 July 2019, Tower Hamlets Council made a non-immediate HMO Article 4 Direction that applies borough wide.

A public consultation is took place from 15 August to 26 September 2019 and you can find out more information on the council’s website. The HMO Article 4 has since been confirmed and will come into force on 1 January 2021. A copy of the Public Notice can be viewed in the ‘More Information’ box on the top right of this page.

When the Direction comes into force, planning permission will be required to change any property from a single-family home (C3) to an HMO with up to six occupants (class C4). So even letting your property to three people who are not all related could require planning permission.

The changes are not retrospective and so until that Direction comes into force, properties can still be converted under permitted development rules.

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: 

Environmental Health & Trading Standards
Tower Hamlets Council
John Onslow House
1 Ewart Place
London E3 5EQ

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

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At a Glance

Licence Overview

The mandatory HMO licensing scheme applies borough wide. Additional and selective licensing schemes each cover part of the borough.

An HMO Article 4 Direction restricting new HMO developments comes into force 1 January 2021.

More Information

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