New HMO laws could cost landlords £95 million

News Article

New laws came into effect on 1 October 2018, which dramatically widened the scope of properties deemed to be “Houses in Multiple Occupation” (HMO).

Until now, licences have only been required for houses of three or more stories, housing five or more people unrelated people, who share the same facilities such as bathrooms and kitchens.

Following the change, any house let to five or more unrelated people, who share the same facilities will fall within the HMO rules, meaning the landlord will require a licence costing £1,235.

With the changes expected to hit more than 77,000 landlords, according to research from Currys PC World Business, the total bill could reach as much as £95 million.

Landlords who fail to have the appropriate licence in place risk a fine of up to £30,000 per property.

Simon Moyle, Head of B2B Strategic Partnerships at Currys PC World Business, said: “With tenants, maintenance, collecting rent and paying taxes to manage, we know landlords have a huge amount to juggle before they can even get around to thinking about licences.”

Paul Hilliard of the Landlord National Purchasing Group, added: “It’s easy to forget that the majority of the UK’s landlords also have other jobs, so applying for new licences isn’t top of their priorities, meaning the government has a big job to do… to raise awareness of this new law.”

HMO licences require that landlords provide cooking and washing facilities of a certain standard to their tenants.

Natasha Kelt, a Solicitor with Palmers, who specialises in property law, explained: “The new regulations follow a period of change for landlords who have been burdened with numerous regulatory changes in the past 18 months.

“Recent cases, such as Caridon Property Ltd v Monty Shooltz (2018), show that with the best of intentions the changes made in legislation to protect tenants have a disproportionate and uncertain effect on landlords due to the manner of the Regulations drafting.

The rules are complex and recent cases suggest that their scope is unclear so landlords are well advised to seek early specialist legal advice in order to review and renew their HMO licences, and other tenancies, to ensure that they are protected and not putting themselves at risk of a hefty fine or, in some cases, imprisonment.”

For help and advice on all aspects of landlord legislation, please contact us.