Should HMO Licensing Be Mandatory?

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In the news recently was fact that Oxford Council has become the first local authority to set stringent new rules for every House in Multiple Occupation in their borough to be licensed.

All councils have some form of HMO licensing but it usually applies to 5 or more unconnected people sharing one dwelling.The new rules for Oxford are:

“A House in Multiple Occupation (HMO) is any house that is occupied by three or more occupants who form more than one household.”

High Demand

The authority already licenses over 600 HMO’s per year. The reason for such high demand is that Oxford has very low unemployment rates and huge study opportunities, and hence, has it’s own little micro problem going on with housing issues. There is a massive demand for accommodation. Unfortunately what this led to was some of the lower end landlords selling low quality rooms for rent at high prices because they know that they can get away with it due to the high demand.

Dangerous Properties

The 2005 house condition survey states that 70% of Oxford HMOs were unsafe and that the HMO stock “provided the lowest standard of living available in Oxford.”  To put this in context, Oxford has 61.3% of it’s HMOs below standard fire detection, with 16.9% of HMOs having no fire detection at all.

Very dangerous when you have multiple tenants in a house who are generally not careful how they treat property. When properties are left in disrepair tenants have no incentive to keep the place nice and tend to drive the state of it down even further creating areas of slum-like living.

Oxford itself houses one of the highest numbers of HMOs in the whole of England and Wales. Official figures say that 1 in 5 residents of Oxford lives in a HMO. Another reason that the local council have decided to finally get tough with the slum landlords is that over 2000 service requests/complaints are logged each year too by tenants and local neighbours. Complaints range from poor living conditions, rubbish problems and anti-social behaviour.

Living Standards Need Improving

The new rules will mean that eventually more than 4,000 properties will be fully licensed. Hopefully this will bring about an improvement in living standards for those living in the HMOs.

Joe McManners, board member for housing, said:

“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.”

When the council first applied for permission to introduce additional licensing back in 2008 it received the expected protests from landlords and local agents, who, lets face it, have been on to a pretty good thing for a long time.

Landlords accused the council of not have being able to cope with the administrative burden of issuing licenses, which meant the whole process was dragged out further until the courts had dealt with all the issues. The new rules in Oxford are accompanied by fines for non compliance.

Will More Councils Follow Suit?

I’m not one for excessive legislation in general, but in this particular case, I think the council were right to take this drastic measure, in order to safeguard those living in sub standard rental accommodation. Most councils don’t have this huge burden and similar rules would merely be a money making exercise, but in these times of cost cutting and raising cash, I can see other councils looking at this as a viable option for easy money. In the case of Oxford though, it makes me wonder why it has taken them so long to sort the problem out.

**UPDATE** If you are worried about all the extra tax raids and charges councils want from your earnings, you can protect them from tax legally with a special income trust for self employed or business owners.

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