First Blanket HMO Licensing Scheme Starts in Oxford

by Property118.com News Team

16:20 PM, 27th January 2012
About 7 years ago

First Blanket HMO Licensing Scheme Starts in Oxford

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First Blanket HMO Licensing Scheme Starts in Oxford

The countdown has begun to the start of the UK’s first HMO blanket licensing scheme that starts in Oxford.

From January 30, every landlord letting a house in multiple occupation (HMO) in the Oxford City Council area must apply to licence the property.

The order covers small HMOs for three to five unrelated tenants as well as larger HMOs that already need compulsory licensing.

Oxford is the first city in the UK to bring in a compulsory licensing scheme for all shared houses.

Councillors reckon the city has 5,000 HMOs – around 1,000 are large HMOs and the rest smaller, shared family homes.

In the past 12 months, 933 large HMOs have registered for a licence.

Councillor Joe McManners, the city council’s board member for housing, said: “The team have worked hard to licence HMOs in the city and we are well on the way to issuing a thousand HMO licences.

“HMOs have long been recognised as being a particular problem in the city, with many examples of poor quality homes and in some cases being poorly managed. These damage the reputation of good landlords and we are determined to put this right, and stop those doing the right thing being undercut by cowboys.

“The private rented sector is hugely important to the residents of Oxford, not just in terms of providing much needed accommodation, but also with the impact that it can have on local communities and licensing every HMO will help drive up standards for everyone.”

Failing to licence an HMO can lead to fines of up to £20,000.

“Enforcement action is being taken against those landlords and agents who are not complying with the scheme and some of them have been taken to court and fined. Now every HMO in the city needs a licence, there is nowhere left to hide,” said McManners.

Every HMO is inspected before a licence is issued. If problems arise from poor management or unsafe living conditions, the council can take legal action to withdraw licences and bar landlords from running HMOs.



Comments

17:06 PM, 27th January 2012
About 7 years ago

Well I reckon what might happen is these LL withdraw from the student market and let their HMO's to the surge of soon to be homeless 24-34 year olds as they are kicked out of their 1 bed flats.
This will just have the unintended consequence of making things harder for students

Mary Latham

14:22 PM, 28th January 2012
About 7 years ago

I have been letting in Oxford since the early 70's - this has been a long time coming because the demand is so high that some landlords let us all down by renting property that is below decent standard and poorly managed at very high rents.

If the local authority had done their job properly this could have been dealt without costing good landlords licence fees and hassel. It is not a though students properties are hidden in Oxford!!!!

18:09 PM, 28th January 2012
About 7 years ago

Just as a matter of interest Mary and to see if I have got my head around this HMO thing.
If you have a 3 bed house, ground and 1st floors  which is let out to students and has no  modifications, no locks on doors..
Essentially it remains as a normal house.
And all 3 students are unrelated.
Does this mean that it should be licenced as an HMO with ALL the HMO requirements; fire doors etc etc.
If this is the case then the majority of student accommodation in houses is illegal!!?
If HMO modifications are required the LL would withdraw the property from student letting and just let to a normal family.as it would not be worth damaging the fabric of the building for HMO qualification.
Am I just being a bit thick here in this understanding or have I misunderstood what you are getting at.

Mary Latham

20:03 PM, 28th January 2012
About 7 years ago

Paul The “new” definition of an HMO, in the Housing Act
2004, was probably the biggest change to the PRS since rent controls were
removed and I meet landlords every day who are not aware of this.

The term “shared housing” is no longer a legal definition
for properties occupied by groups of unrelated sharers (typically student
houses). A shared house is one which has two unrelated occupiers who share
facilities and ALL other “shared” properties are HMO’s. There are both amenity
and management standards that must be met by landlords of all HMO’s but the
details of these depend on the style of the property, fire exit routes, number  of sharers, number of floors. In a typical Victorian
terraced property, where up to five people share facilities over ground and
first floor ,the requirements are not too onerous/expensive. As the numbers
increase and also the distance from a bedroom to safety (in the event of a fire)
the requirements reflect the additional risk/needs.  Look here for more detailed information http://www.homestamp.com/fire-standards/

These properties only need to be licensed (Mandatory HMO
licensing) when they have 5 or more unrelated people sharing facilities that
are spread over 3 or more floors OR where the local authority has used its
additional powers of Selective Licensing or Additional Licensing which are not
restricted to number of occupiers or size of property – Oxford have used
Selective licensing of the whole city, rather than of a “hot spot” where they
have concerns.

The income from a student let far exceeds the income from a
family in a terraced house and the cost of ensuring that these young people are
safe and comfortable is well worthwhile, apart from the  human element, it makes good business sense.
In many areas student properties are now very high standard and command
excellent rents but there are still some areas where supply is short and
landlords may not need to compete for their tenants and in these areas the
local authorities should be using their existing enforcement powers to remind
landlords of their legal obligations. 
Blanket licensing is making the good landlords pay the same as the
others and is very unfair and demoralising in my opinion.

23:07 PM, 28th January 2012
About 7 years ago

Have you heard councils are using credit reference agencies to check if mail for more than 1 person is going to an address claiming a single person's discount for council tax.
So if there are 3 people there they might also construe it could be liable to be an HMO etc.
This as it has been easy for a LL to charge inclusively  and no one would know in a house that there was more than 1 person; unless put under observation.
Apparently the council does not need your permission to search the credit files and it leaves no footprint and is carried under ant-fraud reasons; so is allowed.
Apparently the council just has to put a notice in the local papers they are doing this but they don't have to advise individuals!!

Tony Atkins

10:17 AM, 31st January 2012
About 7 years ago

I disagree with Mary as regards the cost of making a Victorian property "safe" as an HMO, especially when an EHO is being excessively cautious, which costs him nothing but involves plenty of work for his victim. The works can involve:

1. adding fire-proof materials under every step on the staircase. This means tearing out all material under the stairs and laboriously inserting fireboard under every step, right down to the very first one at ground level.

2. adding fireproof materials to the material in-between the understairs cupabords and the kitchen, destroying the perfectly good lathe-and-plaster-work as you go.

3. rewiring to add a built-in smoke and radiant heat detector circuit, with associated redecoration costs and probably an upgrade/replacement of your consumer unit.

4. Insertion of illuminated fire-escape signs around the house. Imagine how that affects the saleability of your property to a family buyer.

5. replacing every door, no matter how lovely a solid-wood period door, with flat-fronted contemporary fire doors, including intumescent strips and self-closers. This creates a horrible institutional feel with the characteristic compression noise and rush of air as these doors close: you feel like you're in an old-people's home, and the tenants invariably prop these doors open anyway as they hate the self-closers.

6. replace the door from the kitchen to the hall with a 60-minute fire door including glass panel with black-lattice wires to strengthen the glass. Again, the sense of being in a prison or institutional facility, which ruins the period feel of the house.

Once you are registered as an HMO, invariably at huge expense (five years arbitrarily-set administration fees in advance at the moment, but no doubt it will soon be annual inspections, as with hotels), the Council knows who you are and there will be no escape. Why should the council care about the cost or the appropriateness of the changes they demand? Most council policies, as implemented by the full-time staff, are generally driven not by common sense, the actual real evidence of risk in a property, or the need to work with and encourage a viable rental market with a range of rents and standards of property, but by the ideologies and current wisdom prevailing within their professional disciplines. This means income redistribution, gender and disability rights, health and safety, and the green agenda. Any changes can always be designated as a form of consumer protection, and there are always votes to be won or opposition to be deflected by demonising landlords. Now that Oxford Council requires all HMOs to be licensed, the stage is set for them to use their new Localism Act powers to impose supposedly-locally-necessary and ever-tightening "decent" standards: HMOs will be required to provide one bathroom for every three people, then one for every two, then ensuites will be made compulsory. It's all about improving standards, isn't it? HMO landlords already have to upgrade their electrics every five years to meet current building standards; this will be tightened further to include compulsory annual inspections and upgrades: after all, the family of two parents and three grown-up children next door are free to gas and trip and electrocute and freeze themselves to death as they wish, but your HMO tenants are in your care and their safety is entirely your responsibility.

The same applies to energy bills: your tenants are always "vulnerable", and it is your duty as a landlord to keep their running costs as low as possible, irrespective of the cost to yourself. Therefore to retain your HMO registration you will be required to fit energy-saving measures: insulation to current and ever-tightening building regulations, draught-proofing, a new boiler, TRVs, a solar panel, a new dual-circuit cylinder to receive the hot water from the solar panel, and so on and so on.

There must be more, surely: how about "no smoking" signs in the common areas, and Escape Route notices in every bedroom? Every door and window will have to be fitted with new locks to some recently-invented new British Standard. The ground-floor ceilings will have to be replaced with 30-minute fire-proof materials and sound-proofing measures, as with new-build flats. If you have original decorative plasterwork and coving, that's just tough: it's a fire hazard. The staircase will have to be fitted with "non-slip" flooring materials and black strips on the edge of each step, again as in new-build flats, ostensibly for the safety of possible elderly or disabled tenants. You will have to fit a stairlift, in case one day you get a wheelchair bound tenant who insists on a first-floor room and accuses you of denying their basic human rights. You will need a wheelchair ramp up to the front door and at the back into the garden. You will have to provide a lockable bikeshed to some BS standard, and a bin store. The changes will never end, and your lovely Victorian house will gradually be converted into a set of unlovely bedsits in which the tenants never speak to one another and take no responsibility for the condition of the common areas, and the property is unsaleable, except to other landlords, unless you spend a fortune tearing everything out and reverting the house to a normal family home.

And the final step: rent control. HMO-registered landlords are providing a public service, including to single people under the age of 35 on benefit. It therefore makes perfect sense to control public expenditure, protect private tenants, and stop landlords from making excessive profits by telling them what rents they are allowed to charge. All of this will be justified under a localism agenda: evidence will always be found that local rents are too high, the tenants particularly vulnerable, the disabled particularly numerous, and so on.

My apologies if the above appears to be a bit of a rant, but it's all perfectly feasible - well, maybe not the chairlift. In my view, it will be all-too-easy for a council to be seized by an agenda in which HMOs are treated as little different from hotels: registration, localism and Article 4 directions will be combined to allow the introduction of a self-financing scheme that controls the number and ever-"improving" quality of HMOs across a city or borough. It will create a strong divide between houses aimed at groups of single people and those rented to couples and families, and will drive landlords like me, who want to rent houses to all kinds of tenants, irrespective of their family status, out of the HMO market.

14:29 PM, 31st January 2012
About 7 years ago

Yep you are so correct.
These issues will certainly assist families with lots of children.;LL will get out of the HMO market and either convert to flats or let out as a whole building.
They will take an income drop as HMO requirements with all the existing and future ramifications are not worth it.
This will cost the councils even more in housing benefit as where are all those 24-34 yr olds going to stay with reduced HMO availability.
I suggest B & B's.
So maybe conversion to a B & B establishment will be more profitable as you can make more money out of that as councils will have to put their homeless somewhere
'Temporary' accommodation will have to be used; this will obviously be more expensive.
So we have here another well thought out plan by councils...NOT!!?

Mary Latham

16:58 PM, 31st January 2012
About 7 years ago

Is it safe to come out now guys? Before I say any more please remember that I am a landlord and that I have paid the cost of coverting  property into  HMO's.
 
I put in most of the items listed by Tony long before small student houses were considered to be HMO's and I did it voluntarily - my properites look modern and young and attract students at decent rents and my investments have long since been returned.
 
Most of us realise that people living in shared properties often do not take the same care of the property, have erratic lifestyles, pay little attention to how their actions (or lack of action) affect others in the property and, in the event of a fire, would run for the nearest exit without thinking to check on others.

When I CHOSE to accommodate students (other peoples kids) I made certain that I had done everything in my power to keep them safe.  If a tenant died or got badly hurt in one of my properties and I could have prevented it I would not be able to live with the guilt.

If I had not wanted to spend the money required to make properties safe for sharers I would have CHOSEN to buy property to let to families but the return would have been MUCH less.

I'm running to hide in case I have sparked more ranting

21:31 PM, 31st January 2012
About 7 years ago

I think you are correct in your contentions.
But with all the hassle LL will accept that they will receive MUCH LESS for a house that is not an HMO.
But hang on if you have a 4 bed house and let out as an HMO.
The shared room rate is £67.00 per week.
That works out at
£3484.00 per year per person if in occupation throughout the year.
Multiply that by 4=
£13936
Divided by 12 momths=
£1161.00
Are you really saying that for maybe slightly less than £1000.0pcm to rent to a family that it is worth all the hassle of having an HMO.
I don't think the price differential is worth it

Mark Alexander

21:47 PM, 31st January 2012
About 7 years ago

A 4 bed house can easily accommodate 5 Paul if the dining room is converted. If you can buy such a property for less than £100k it's a good return. Not my Market but I know some good landlords who work this extremely profitably. Do a search for CXG from the central search bar. I've dine a few video interviews with their CEO Robin Pilley, great landlord, very successful chap.

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