HMO licence fees up 650 percent

by Property118.com News Team

14:54 PM, 25th January 2012
About 8 years ago

HMO licence fees up 650 percent

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HMO licence fees up 650 percent

In the last year it has become very clear that many Local Authorities are looking very carefully at Private Sector Landlords and the various aspects of licensing.

Some Councils have considered Selective Licensing, a discretionary scheme that allows local authorities to introduce licensing for all privately rented properties, with a charge, in a given area. Others have examined Additional Licensing, which is basically extending Houses of Multiple Occupancy (HMO) licensing to smaller properties.

The introduction of both Selective and Additional Licensing requires a consultation period, with all interested parties given the opportunity to submit objections.

In Norwich, the City Council has increased the cost of its HMO Licence from £270 to £1800, an increase of over 650%. No consultation was required for this huge leap in the fee for a five year licence. This was voted for by local councillors, the elected representatives. In Norwich there are about 160 HMO licences, representing now an income of £288,000 over a five year period. To calculate this £1,800 figure a toolkit was used from Central Government, and the legislation states that the council cannot use the fee to raise revenue. The running of the scheme, unlike some other council work was not put out to tender, and a question must be asked what does the private landlord receive for his/her money? It is interesting to note that in Lincoln, a similar sized city, there are 170 licensed HMO’s and the fee starts from £370 for a five year licence. WHY?

The changes to Housing Benefit mean that whereas a single person up to the age of 25 received benefit for shared accommodation, and those over 25 for a one bedroom property, the age limit is now 35. One of the consequences of this is that more single people will need shared facilities. Where will these individuals live?

A result of the HMO changes already implemented make it less likely that the private sector will supply, and those that do will almost certainly increase rent charges to cover their increased costs. More landlords will face these increased costs with the introduction of Selective or Additional Licensing, imposed by councils.

Landlords, generally, are law abiding citizens who pay their taxes and as a group contribute considerably to the local and national economy. The private sector landlord will have fire alarms, gas and electrical systems tested as required by the law, ensure they have the necessary insurance cover, pay tax, join a landlord association to ensure they are up to date and have access to a helpline, all at a cost to the landlord. If they sell a property and buy another to improve their stock, and offer improved housing to tenants, they will pay capital gains tax with no rollover relief. They believe in value for money and a 650% increase in one of their costs is very difficult to reconcile.

Peter Davies, Chief Executive of Eastern Landlords Association (ELA) said; “We are asking local authorities that plan to bring in further schemes, or in the case of Norwich City Council where a change has been made in fees – How many landlords have you successfully prosecuted due to failure to meet the legal requirements of the 2004 Housing Act and other legislation?”

The ELA is strongly encouraging its members to contact their local councillor and ask their view on further licensing for private landlords in the area where they have properties. Local Authority websites will have contact details for councillors. In those areas where there are already planned, or implemented changes, the ELA are asking their members to ask their councillor to justify and outline the repercussions for housing standards and availability. The private sector now supplies to the rental market as many properties as the social sector, who are not subject to these dramatic changes. In addition ELA are asking members to make their MP’s fully aware of the increasing burdens being placed on landlords as they strive to continue to supply homes for millions of people.

Peter Davies went on to say; “Here at The Eastern Landlords Association we will continue to support and advise all our members, and would ask all members to confirm to the office that they support us in our continuing action.”

Mr Davies would welcome you to post any questions in the comments section below. Alternatively, the Eastern Landlords Associations contact details are below:

Address: Suite A, St Francis House, 141-147 Queens Road, Norwich, NR1 3PN.

Tel: 01603 767101

Fax: 01908 512245

email: info@easternlandlords.org.uk



Comments

16:01 PM, 25th January 2012
About 8 years ago

Looks like the business model for HMO's could be a busted flush!!?
How long before builders receive instructions from landlords to convert HMO's  to 2 bed flats etc.
God knows where all these 24-34 olds are going to live.

Jonathan Clarke

8:07 AM, 27th January 2012
About 8 years ago

I have received 3 panicky calls from under 35`s recently. You can sense the fear in their voice as they hear about the new rules and gradually come to terms with their predicament. I cant house them in my 1 beds. I dont do room shares or HMO`s. It takes them a while to absorb that. I say I will txt my mates and see if they can help to give them a bit of hope. They are full to the brim as well though with waiting lists of their own. This is the start. It will get worse.

Many have existed frugally but stably for the last decade in their own  private world and now they are being forced out to share a house with others who they simply may not fit in with. I understand why its happening and sit on the fence as to whether it is fair or not but you cant help but feel some sympathy for them. Will the next benchmark be the under 45`s. To cope with the exodus and the homeless knock on effect which will inevitably surface are the councils planning to build  mass state owned HMO`s with 24hr security housing thousands. Will they stick them away from the town centres in some barren wasteland where its cheap to build. Provide some state owned shops with a token bit of welfare support chucked in. What will be the difference between an HMO of the future and a Prison. Will we be able to tell the difference?..... Just a thought........

16:49 PM, 27th January 2012
About 8 years ago

Yes I must admit I am not sure about the political thinking behind these age changes.
I can appreciate that the younger age range was appropriate for what might be dissolute youth.
I  don't really consider someone over 25 as dissolute.
They are men and women by then and so cannot be viewed as some itinerant tenant.
There is as you have suggested some stability in their lives and to have this taken away in one fell swoop seems to be potentially counter productive.
Throwing these characters together in shared accomodation is I think a recipe for social upheaval.
Presumably some of these characters have children.
Is it really fair or appropriate to have such child visits in a shared accommodation situation?
I don't think so.
I think this one of those situations that the govt has not fully thought through and consequently will face concerted opposition based on the unfairness of the changes.
It is all about money.
Essentially the govt could save themselves about £300.00 per month in LHA.
In the overall scheme of things this is not really alot.
The potential extreme detriment to these claimants though is something that will be visited on council housing depts in the coming months.
They are the ones that will be faced with trying to house them.
Unfortunately gotr them ther PRS is in no fit state, nor does it have the supply of the appropriate accommodation for these new shared room accomodation tenants.

I think; quite frankly if you had secure comfortable accommodation with on site security, meals provided and regular visiting times from family; that doesn't sound too bad does it............where to source such an accommodation solution............!!!!?
Perhaps some of our disused accommodation formerly belonging to Her Majesty!!?

mike wilson

13:40 PM, 31st January 2012
About 8 years ago

I would suggest that any landlord that has concerns about the level of HMO licence fees should, under the freedom of information, ask the Council to provide its HMO account by year for the last few years.

This simple request in Scotland resulted in the revalation that the Council had used the account to generate revenue for purposes other that HMO management. The council was also reported to the Auditors and a complaint was made against the Auditors for not noticing the maladministration.

23:44 PM, 7th February 2012
About 8 years ago

Following some close scrutiny of their explanation of where the licence fees were spent in Newcastle upon Tyne and a failure by the Council to satisfactorily convince us that the money had not been used to support other work in the Department they dropped their Licence renewal fee by a considerable amount. I think that one of the Landlord  organisations should start a petition on the number 10 website for the Government to start some sort of auditing of all authorites licence fee income and expenditure. I am sure that lots of people would want to sign up to that. I would urge everyone to make FOI requests to their local authority for a detailed breakdown of their budgeted costs and actual costs and number processed against expected numbers.

Mary Latham

18:24 PM, 16th February 2012
About 8 years ago

Landlords in Wolverhamton are facing their first selective licensing scheme We believe this is only the start.If you let in this area and want to know more please come to this NLA meeting on 23rd Feb. http://www.facebook.com/pages/Mary-Latham-Landlord/115545281884824#!/pages/Mary-Latham-Landlord/115545281884824


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