August...New October 2018 licensing
The property market is fast paced and property investors, landlords and letting agents have to ensure they are keep up to date with the law. The team at Tungsten have engrained in their work ethic the need to stay abreast of legal developments by reading investment publications (such as ‘Property Hub’ and ‘Your Property Network’ magazines), attending regular networking events and through its membership with the National Landlord Association. We also have key google alerts set up which feed current developments and hot topics straight into our inbox. I recently received an alert regarding the HMO license changes and have read various articles on the legislation changes to mandatory licensing of HMO’s. This is the hot topic of my blog this month.
The current criteria is that mandatory licensing applies nationwide HMO’s (ie. for properties rented to 5 or more people and it’s at least 3 stories high with a shared toilet, bathroom or kitchen facilities). However, from 1 October 2018, the criteria is changing so that the 3 story requirement no longer applies (to bring smaller HMOs within the mandatory licensing scheme).
There are also changes to the minimum room size regulation relating to bedrooms in HMOs. Licences issued from 1 October 2018 will have to ensure that a bedroom for 1 person should not be smaller than 6.51sqm. This does not include alcoves, bay windows or fitted wardrobes. Landlords need to make sure that they do their due diligence on the room sizes, as many floorplans online include the alcoves or bay windows. At Tungsten, we err on the side of caution so the bedrooms are never under sized which could be disastrous for a project. The size of a bedroom is very important for your tenants’ enjoyment of the space, especially if there is no communal space as this can have a huge impact on tenants’ mental health. As part of these changes, the landlord of the HMO also needs to think more carefully about how waste is stored and disposed of as more people are placed into residential properties. We are responsible as landlords to ensure the bins are sufficient in size and do not cause any issues to the local residents .
My main concern is that the changes will not filter through to the landlords in time. Also, the authorities need to have the systems and resources in place to handle the license applications before 1 October 2018. I know that it takes time and funds to contact all those who will be affected in their local area but I wonder how much promotion and guidance the authorities will provide. There will also be different licensing fees between councils, so I would urge landlords to check the Government website (https://www.gov.uk/government/publications/licensing-of-houses-in-multiple-occupation-in-england-a-guide-for-landlords-and-managers) for your specific area.
As a responsible landlord and investor, I urge all other landlords to do their research and speak to their local authority, as failure to comply with the license can lead to fines, criminal records and being unable to seek possession under a Section 21 notice. In addition, the landlord may also have to repay 12 month of their rental income.
Take Away Points
- Landlords should contact their local authority to understand their specific situation
- Get educated and remain up to date with changes (via the industry press)
- Use your network as a sound board for advice and an information resource