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Landlords in the dark on HMO regulation changes

Wednesday 27 September 2017

Landlords could be risking expensive restructuring work or hefty fines if they don’t get to grips with new HMO legislation (Houses of Multiple Occupancy) expected to come into force this Spring. 

Here at Simple Landlords Insurance, we’ve been talking to landlords about HMOs - and our research has found that more than 85% of landlords aren’t aware of the changes being proposed by the government.   

These include introducing minimum standards on room sizes, storage facilities and waste disposal for all HMOs - including conversions and properties of multiple use.

The legislation will also do away with the rule that HMOs need to have at least three stories to require a license. 

60,000 HMOs across UK currently require a license - but another 174,000 properties could be subject to the new regulations.  

Alex Huntley, Head of Operations at Simple Landlords Insurance, said: “It’s clear that not everyone knows about these proposals - and that could leave landlords with rooms they can no longer rent, undersized living areas – and a serious gap in their income.

“It’s our job as an insurer to be the ‘safety net’ that gives landlords the freedom to invest while mitigating risk. This is clearly a risk, and as the 6 month countdown begins, we’d very much like to see more clarity from government so landlords aren’t caught unawares.”

Carl Agar, Managing Director of property management company, Big Red House, Founder of the Home Safe Scheme says: “The good news is that there’s likely to be a six month grace period for landlords to catch up with the new legislation. Whether you already own an HMO or are thinking about purchasing one, you need to be prepared to deal with the new rulings. And at the end of the day, I personally believe licensing can improve the quality of accommodation – and ultimately that’s going to improve the market as a whole.” 

What are the new rules ?

The government proposals - likely to be implemented in April 2018 - include:  
     ● Removal of the three-storey rule
     ● Incorporating flats that are situated above or below commercial premises
     ● Putting in place a minimum size requirement of 6.52sq.m which is in line with the current standard
        for overcrowding  (Housing Act 1985). This size is likely to be 10 Sqm for HMOs in which all tenants
        have their own bathroom but share other facilities such as a kitchen.

Additional proposals include:

     ● A Fit & Proper Person Test for landlords looking to obtain a license
     ● A requirement for landlords to provide sufficient storage facilities to deal with the holding and
        disposal of all household waste.

Estimated costs: 

The consultation document has suggested a cost to landlords of approximately £500 for the license,
   which would cover the property for five years. 


You can read the proposals in full here. 

 

Find out more about the changes in Carl Agar’s latest blog - How do deal with the proposed amendments to HMO licensing here

And hear what guest blogger and HMO landlord Jasmine thinks about the HMO market, in The case FOR HMOs here

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