I am sure you are aware that some properties require an HMO (Houses of Multiple Occupation) license. I recently attended a National Landlord’s Association event following Brighton & Hove Council’s meeting proposing a Private Rented Sector Discretionary Licensing Scheme on 16-NOV-16. Nothing to worry about? Read on….

To set the scene what are the HMO requirements?

Although this article relates to a proposed new licensing scheme I thought it would be beneficial to go over what we already know about the current schemes:

The Housing Act 2004 requires landlords of larger HMO to apply for licences. Citywide National Licensing HMOs that need to be licensed are those which:

  • have three or more storeys, and which are
  • occupied by five or more people forming two or more households (ie people not related or¬†living together as a couple), and
  • have an element of shared facilities, (eg kitchen, bathroom, etc)

As of OCT-2012 the council added (initially) 7 Wards under a locally adopted scheme Additional Licensing for smaller HMOs in twelve wards which applies to:

  • smaller houses in multiple occupation consisting of two or more storeys
  • with three or more occupiers from two or more households sharing facilities
  • as far as licensing is concerned, attics and basements are included as storeys if they are used as part of the living accommodation

From JUL-2015 5 more Wards were added making a total of 12. For these smaller HMOs many Landords have chosen to let to a single Tenant, two occupiers or two households thereby falling outside the requirements and fee. This often reduces the achievable rent and also the stretched market loses another bedroom.

Under new proposals selective licensing is to be rolled out for St Peter’s & North Laine, Regency, Moulescoomb & Bevendean, Hollingdean & Stanmer, Queens Park, Hanover & Elm Grove, Brunswick & Adelaide, East Brighton, South Portslade, Central Hove, Westbourne & Preston Park Wards.

What does an HMO cost?

Planning is often required to get to the stage where you can then apply for an HMO, more often for National Licensing type HMOs. Pre-planning advice is now chargeable if required and the planning application will cost £172.

Licensed HMOs are generally expected to meet the council’s HMO Licensing Standards.¬†Any work necessary for compliance is required by way of conditions attached to the licence. Fees start at ¬£654 and go upwards from there depending on size and type of HMO.

Why are they considering Selective Licensing also?

As you may have read over recent years council’s are having budgets cut across the UK and need to make up deficits, often to ensure staff can remain in their positions. It could be said that the pressure local authorities are being put under by these cuts is unfair and puts them in a very difficult position. Licensing seems to be quite a good vehicle for creating revenue, covering current salaries and even creating new jobs. Could that have anything to do with the increasing number of Wards under Additional Licensing?

Looking at the numbers the proposed 12 Wards would result in 21,050 new licenses and going on the lowest fee of £654 that equates to £2.7 million per year over the five year period, or 92 £30,000 PA salaries. They may well need that many to administer and regulate all of these properties.

Following the notes of their NOV-16 meeting B&H Council are now proposing ‘selective licensing’ throughout the city based on “sufficient evidence to demonstrate a significant proportion of HMOs are being managed sufficiently ineffectively to support the introduction of citywide Additional HMO Licensing to smaller houses in multiple occupation, and of poor property conditions and significant and persistent anti-social behaviour”. Frankly I cannot agree with this as they do not have the man-power to prove the first part and during my 7 years in this city I have not yet heard of a common anti-social behaviour issue in any form via on or off-line media.

The report also states clearly that their findings are entirely based on theory rather than fact. Their heat map of ‘Geographical density analysis: Private Rented Sector & Requests for Assistance’ also happens to be the most densely populated areas of Brighton and Hove. The ‘Wards table comparing the size of the PRS with housing conditions and Anti-Social Behaviour (ASB)’ shows that Rottingdean is just as bad as Preston Park. I don’t want to bore you, the report is an endless list of data based on theory, and do the Police Force actually ask if a report of ASB relates to a PRS property, social housing or privately owned?

It is quite clear to me they have already made their mind up and it is up to us (you) as Landlords to fight back before it is too late. It has happened in other cities already, some like Newham, London carried out a blanket licensing scheme before Govt banned it. More recently there has been a victory in Liverpool but it took Landlords to work collectively towards a common aim.

You can see the full report by clicking here.

The report was based on a 3rd party summary seen by clicking here.

What could it mean?

Landlords will look to recoup costs which is likely to increase rents, meaning vulnerable Tenants and key workers could get pushed out of the city.

Malicious complaints (EG racist or homophobic) about anti-social behaviour could become common as the end result is a likely eviction. Following the selective licensing requirements a Landlord may have no option but to end the Tenancy, as ridiculous as it sounds. This punishes Landlords unfairly as they do not have the power to police Tenant behaviour.

Following a recent story in BBC the ‘revenge eviction law’ (Deregulation Act 2015) is not working and this represents a tiny fraction of all Tenancies. This falls under the local authority’s remit also which leads to concerns over whether they can handle such a huge influx of licensed property to oversee (21,050), on top of the existing number (6,482), I doubt they will actually hire 92 staff to administer the new licensed properties. Click here for the news report.

Brighton & Hove is not the vibrant, diverse, forward thinking city you know which attracts business, tourists and investors. According the council it has major social problems, and is full of poorly maintained properties and rogue Landlords!

So what can you do?

The initial meeting was in NOV-16 and they would like to action this as soon as possible so I think we have 3-6 months at best.

Action 1: write to relevant local Ward Councillors, you can find their details by clicking Brighton & Hove Ward Councillors

Action 2: write to the local Conservative MP (Green and Labour MPs have indicated they would support the scheme): Simon Kirby MP, Ground Floor, 1 Central Court, 1 Central Avenue, Telscome Cliffs, East Sussex. BN10 7LU / simon.kirby.mp@parliament.co.uk

Letters/emails need to be personal rather than a copy/pasted template so please use this post and the B&H Council report as inspiration for your contact.

There has to be another way.

 

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Best Regards,

julian-sig

Julian Bishop