Further to my rant about HMO Licensing Fees on 16th October one of my readers decided to submit a Freedom of Information request to Oxford Council based on the questions I raised and has forwarded the response to me.
As you may be aware, Oxford were one of the first Councils to implement both Article 4 planning and Selective Licensing. They now require all landlords to pay a fee to licence each property they own which is let to three or more tenants.
The response to the Freedom of Information Request from Oxford Council makes very interesting reading and I’ve copied it below for you. The questions are written in this colour, the Councils answers are written in this colour and my analysis (or should I say continued rant) is written in this colour – not that I’m seeing red or anything !!!
Further to the acknowledgement below, I can now respond to your FOI request of 17th October 2012 as follows:
Q1. How many HMOs are there?
There are an estimated 5,069 HMOs in Oxford.
I wonder how you arrived arrived at that figure? However, for the purposes of this exercise let’s assume it is correct.
Q2. How many HMOs have been licenced?
Since 24th January 2011, the Council has received 2,541 applications and it has issued 1,397 licences. 551 HMOs were licensed already under the national scheme. Therefore, 1,948 HMOs have been licensed.
OK, so that’s 3,121 which remain unlicensed? That’s over 60% of the estimated total isn’t it?
Q3. How much money has been collected from HMO Licensing?
Since 24th January 2011, a total of £1,046,392 has been received in fees.
Mmm, saved a few jobs at the Council then!
Q4. How many HMOs have local authorities closed down due to being unsafe or unlicensed?
The purpose of licensing is not to close down HMOs, but to bring them to the legal minimum standard. To date, over 90% of the HMOs the Council has inspected have required additional works to bring them up to the required standard.
If an HMO is in poor condition, legal action will be taken against the landlord. If an HMO is in a very poor state of repair, the Council will serve legal notices and will require the landlord to carry out emergency works. If the landlord fails to undertake the necessary works, the Council will carry out the work and charge the landlord.
Actually, that’s almost pretty reassuring to know – well done Oxford Council
The Council does not close down unlicensed HMOs when it discovers them. It will require the landlord to apply for a licence and charge an additional fee of £170 to cover the costs of finding the property. In addition, legal action may be taken for failing to licence the HMO.
Only £170, that’s not much is it?
The Council took over the management of one HMO that was in poor condition and where the landlord failed to licence the property. The Council ran the property for a year and then it was handed over to a letting agent.
Again, quite admirable, but only one? This kinda proves there wasn’t a very big problem in the first place does it not? Apart from creating “jobs for the boys”, one might wonder what the purpose of collecting all this money was given the extent of the problem, or should we say lack of one?
Q5 & 6. How many fines have been imposed on landlords operating unlicensed HMOs and what is the value of these fines?
Since the introduction of the Additional Licensing Scheme in January 2011, the Council has successfully concluded 26 cases of legal action, resulting in £28,703 of fines and costs.
So out of 3,121 unlicenced properties (presumably a lot more than before the 26 court cases started to be reported?) only 26 have resulted in fines? That’s less than 1%. Therefore, the remaining 3,121 unlicensed HMO landlords are risking a £170 fee IF they get caught and a less than 1% chance of prosecution leading to an average fine of just over £1,100 if my maths is correct!
Q7. How has the money raised as a result of the HMO licensing and fines been spent?
The HMO licensing scheme is self-funding and the fees raised cover the costs of managing and administering the scheme, including the inspections, reports and licences.
So the money raised is primarily used to raise the money then? Pure genius! One wonders why you guys chose to work in the Public Sector as opposed to the productive economy?
And there has been only one case to justify the introduction of licensing in nearly two years? !!!
The Government and not the Council collects the fines. Therefore, the Council does not raise any money by taking cases to court.
OUCH! I feel your pain on that one. Not much incentive to spend all that money you collect to actually pursue the none payers then is there? You might as well spend it on PR to publicise the one problem you found and the 26 people you fined then! You never know, you may inspire a proportion of the 60% who are not paying you and collect another million or so to save a few more jobs. Next you will be telling us that this model is good for the economy because those people whose jobs you are saving spend their money in the economy and pay tax??? YEAH RIGHT!!!
YEP, HMO Lcensing Fees is definitely a case of “jobs for the boys” in my humble opinion!
The reply from Oxford Council came from:-
Michael Newman - Corporate Secretariat Manager, Chief Executive’s Office, Town Hall, St Aldate’s, Oxford OX1 1BX
About Mark Alexander
Mark and his family have been investing in property since 1989, initially in the Norwich area but more recently across the length and breadth of England. Mark created Property118.com as a social network for landlords with a vision of becoming the UK's best respected online property community. Mark is also a freelance internet marketing consultant to law firms Email - email@example.com