Final Countdown: Are you prepared to put the X in a box?

Are you aware of upcoming HMO legislation changes?

It hasn’t been the best couple of years for landlords, and with 2017 kicking off with the introduction of Section 24, this year didn’t start well either! However, as election fever took hold, many of us thought we might slink under the radar for a while, and maybe, just maybe, get through the rest of 2017 relatively unscathed…

Sadly, this isn’t the case if you’re an HMO landlord. Enter the Houses in Multiple Occupation Licensing Reform Consultation!

Designed to help councils standardise living standards in HMO’s across the country, the consultation’s Spring 2017 introduction was delayed by the election, but despite this, it’s promises are already making thousands of landlords across the country very nervous.

But why? Property Quote Direct is on hand to guide you through the changes you can expect to see when the HMO reform lands:

More mandatory licensing

What are the rules?

The document has detailed plans to extend the scope of mandatory HMO licensing. Currently, 60,000 HMOs across you UK require a licence, but this is set to almost treble once the new rules come into play. Once in force, the following properties will be required to apply for a licence:

  • If the property is inhabited by five of more people, which makes up two or more households: A household is classed as an immediate family (parents and children), partners (married, civil partnership or co-habiting), or individuals.
  • As well as three storey properties, single and two storey properties must now be licensed, if they fall within the above remit, including properties converted into bedsits.
  • Properties above commercial buildings (such as shops or restaurants) must also be licensed

How does it impact me?

It is estimated that the proposals will make around 174,000 additional properties subject to mandatory licensing on top of the existing 60,000, so there are plenty of landlords who are going to be feeling the changes. Whilst there is likely to be a grace period of six months once the legislation is introduced, any landlords who are haven’t sorted out their licensing requirement when this period runs out could find themselves on the receiving end of criminal prosecutions, and civil penalties of up to £30,000 – so it’s a significant impact to consider.

Minimum bedroom size

What are the rules?

One of the most contentious issues of the new HMO regulations is amendments to schedule 4 of the Housing Act 2004, which states that local authorities are to disregard rooms of less than 6.52 square meters for one person, and 10.23 square meters for two people.

The rules do not apply to visitors who are staying for a short time, but children will be counted as full adults in this instance. The size regulations are applied per person as well as per square meter, so landlords cannot get around the legislation by filling box rooms with bunk beds.

How does it impact me?

It could be fairly costly if ignored - should a landlord let a room smaller than the prescribed dimensions, they would be breaching their licence, and would be liable for an unlimited fine, or civil penalty of up to £30,000.

Many landlords, especially those who let to students who may be happy to take a smaller single room in exchange for lower rental payments and larger communal living spaces, are nervous about the upcoming changes, although there are ongoing discussions on whether the licensing arrangements for purpose-built student accommodation should be more flexible.

Many landlords are voicing concerns about what they can do when they have a room that is on the borders of acceptable. For many, making changes is going to be a costly process, and could spell weeks of dusty, dirty upheaval for existing tenants. There is a possibility to appeal a licensing decision, especially is there are large communal areas to take into account as well, however there is no guarantee of success.

Rubbish disposal

What are the rules?

It has been proposed that as part of the mandatory licensing conditions, licence holders must provide adequate receptacles for the storage and disposal of the household waste created by the property.

However, stockpiling bins on the pavement isn’t the answer, landlords are also responsible for ensuing waste disposal units are stored in a suitable, accessible place, within the footprint of the property.

How does it impact me?

It may be time to do some detective work, and try to work out exactly how much bin overflow your tenants create on a weekly basis! If there’s more rubbish than bin-space, you may want to consider bulk-buying more bins and planning your bin-store, or you could risk your licence!

‘Fit and proper person’

What are the rules?

As well as having to make sure you abide by the landlord legislation, in order to pass your HMO licence, new regulations suggest that you have to be deemed a ‘fit and proper person.’

In the first instance, a license may be denied if evidence is provided that proves that the person in question has been convicted of a criminal offence involving fraud, dishonesty, drugs, violence or sexual abuse, or if the proposed licensee has practiced unlawful discrimination or broken any housing law relating to housing, landlord or tenant law.

Additionally, if the person in question does not have permission to enter or remain in the UK, or is insolvent or an undischarged bankrupt, they may also be denied a licence.

How does it impact me?

None of these matters would automatically disqualify a person from being ‘fit and proper’, with every case being judged on its own circumstances.
If a certificate disclosing your criminal record status is required, there is a small charge levied by the Disclosure and Barring Service (DBS) or Disclosure Scotland to release this information. Currently, a Disclosure Scotland certificate costs £25.

More and more tenants are turning to HMOs as a viable solution to best manage the housing crisis, especially in our busy towns and cities. HMO’s are a popular addition to many landlord’s portfolios, and it’s vital that they are as well looked after as they can be.

Property Quote Direct can help provide comprehensive landlord insurance, ensuring that you, your property and your tenants are well protected against life’s little accidents - taking the worry off your shoulders and leaving you free to focus on the bigger issues, like complying with yet more landlord legislation!

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