Last week, Housing and Planning Minister John Healey announced that, from April 2010 the government will require any landlords who want to provide HMO’s (Houses of Multiple Occupation or Bedsits) to apply for planning permission first, before they build or convert a home.

This is a costly and time-consuming measure that will deter many landlords, even those who do jump through all the hoops could be denied permission.

There are fears over strong opposition from people who do not want HMO’s in their neighbourhood (NIMBY - Not In My Back Yard) who will oppose each and every HMO planning application to stop students, migrants or those on low incomes moving into their neighbourhood.

So what exactly are the new rules?

Landlords will need to obtain planning permission where a material change of use will occur – which will now include renting a property to three or more occupants who are not members of the same family.

Healey also outlined proposals to give councils the right to introduce licensing schemes without seeking permission from central Government in so-called ‘hotspot areas’. Local Authorities currently have to seek approval to introduce HMO licensing schemes, which require all private landlords with properties within the area to get a license.

The councils can also decide if the landlord is a ‘fit and proper’ person to manage their properties, impose conditions and standards on licenses and charge landlords a fee at their discretion.

Why the crack-down on houses in multiple occupation?

The Government says that a cluster of too many shared houses can cause problems, especially if let to short-term residents with little stake in the local community. It also claims tenants can also suffer from poor conditions and management of the properties by landlords.

The new rules are intended to help ’stem the growth of large pockets of shared homes – which can change the balance and nature of communities.’ They will also aim to tackle these ‘pockets of unsafe and substandard accommodation’.

The Minister claimed that many towns and cities across the country have suffered the effects of a concentration of HMO’s.

Market, coastal and university towns have reported problems due to large student populations and scores of HMO’s.

What is the reaction to the changes?

The National Landlords Association (NLA) condemned the changes saying they will reduce the supply of essential shared housing.

It claims that by making it more difficult and costly for landlords to provide this type of accommodation, the measures will reduce choice for tenants and increase pressure on local authority housing lists.

It also notes that last year’s Rugg Review, an independent review of the private-rented sector commissioned by the Government, dismissed these changes as an ‘extreme response’ which local authorities are ‘ill-equipped to handle.’

The NLA have a valid point in respect of the measures, but it’s not just them. The British Property Federation (BPF), the Residential Landlords Association (RLA), and National Union of Students (NUS) have all rubbished the rules.

Many of the objections point to the fact that the Government seems to have bowed to a small number of people who have shouted very loudly about anti-social behaviour in areas with a high level of HMO’s.

The NIMBYs have won.

But by making it harder for landlords to offer these properties they will have to raise rents, which will drive students and migrants in to ghetto-style communities, a far cry from the Government’s stated policy of social integration.

Shared housing accounts for 20% of the private rented sector and plays a vital role in provided low cost housing for students, young professionals and those on low incomes.

The British Property Federation argues that a tiny fraction of places suffer from a high concentrations of HMO’s and that using a broad brush approach to deal with different issues relating to anti-social behaviour makes no sense.

The NUS added that students contribute hugely to their local areas, not least by giving the local economy a massive boost. Indeed, small businesses in new HMO no-go areas would be likely to suffer.

What was the Government Response in defence of these measures?

The government stated that 94% per cent of respondents to a Government consultation on this issue last year said they’d experienced problems of the effects of HMO’s, including anti-social behaviour, litter, noise, and problems with parking.

84% of respondents agreed with the proposal that planning legislation should be amended to deal with the problems associated with high concentrations of HMO’s.

So how does a small minority of people put so much pressure on HMO landlords?. Did landlords have a fair representation during the consultation? Did the various landlord associations not present the case properly during the consultation process?

Or were they all ignored in order for the government to get a better grip on what profits landlords were making not to mention all the extra income they could regulate out of landlords by making unnecessary compulsory acts and regulations.

The current Labour Government has been heavy handed with landlords over the past few years, with over 50 Acts of Parliament and 70 sets of regulations governing the private rental sector, and even more in the pipeline according to respected sources. The government says it wants “...a vibrant rental market”.

The housing market NEEDS a healthy private rental sector to ease the burden on the government due to the national house building shortfall and the ever growing  population.

Just when landlords have finally got to grips with the Tenancy Deposit Protection Scheme (TDS), the introduction of HMO rules, and the need to provide Energy Performance Certificates, more rules are proposed.

These new rules include

·         A National Landlords Register

·         Licensing all letting agents

·         Statutory regulation of buy-to-let mortgage lending and advice.

Whilst protection for tenants and affected homeowners is necessary, landlords are slowly being strangled by red tape. Recent figures published last week showed that 60% of private rental sector landlords are increasingly worried about the rising level of regulation surrounding their industry.

Look out for the mypropertypowerteam.co.uk February Newsletter - HMO special

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