HMO Additional Licence – Potential Housing Crisis?Make Text Bigger
I have been renting out a 3 bed property to groups of 3 tenants for the last 10 years. It appears that this is classed as an HMO.
Southwark Council have now introduced Additional Licencing which affects any landlord renting out their property with 3 unrelated people living together. You are deemed under the 2004 housing act to be running three households even if it’s a group of people operating under one short hold tenancy agreement.
I applied for the licence and while I am HMO compliant the freeholder and mortgage company have refused to permit the licence. As such I will in future only be able to rent the property out to either a family or two tenants – freeholder holds the cards. This will be the case for many others in the block my property resides in hence displacing many tenants in this block alone.
As London is significantly leasehold I wondered if there will be a big issue here. Letting agents, lawyers, landlords appear unaware of the or the fact that 3 unrelated people is an HMO. Additional licence will expose thousands of rentals that did not perhaps realise they were HMOs.
My view is that if other freeholders choose to reject HMO Licencing where Additional Licencing is required there will be a housing shortage for tenants. Freeholders will rely on the leasehold agreement which states one household. And why not, being licensed HMO means I could run a property as a refuge, student accommodation, with locks on internal doors etc. I don’t blame the freeholder or mortgage company for not permitting the licence. I do blame the law and council as it seems unreasonable that a group of 3 tenants can no longer live as a “family” unit in my property under a short hold agreement. (I get why it is necessary for people moving in and out of shelters).
I am interested whether other landlords are either:
– aware that you may require an Additional Licence if running a rental with three unrelated people. Southwark Council are now enforcing this for the Borough
– experiencing rejections from their mortgage companies or freeholders
I am now unclear whether the property will achieve rentals previously achieved and as such may be forced to sell. Whatever happens my learnings and experience will cost thousands and feels like it needs to be exposed.
I think this will create a housing shortage in Southwark once people realise they are affected. Good story for the Evening Standard I suspect?
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