Home > Campaigning > HMO

Houses in Multiple Occupation (HMO)

28 January 2010

Shared housing landlords will find it more difficult to provide more shared housing thanks to Housing Minister John Healey’s announcement yesterday. All new shared housing for three or more unrelated persons will now need planning permission from local authorities.

The NLA has roundly condemned the move. The NLA, along with other housing groups and student organizations argued that these changes to planning law were misguided and would not achieve the Government’s goal of improving housing and dealing with the small number of HMO problem areas in the UK. In our response to the Government consultation we pushed for local authorities to take responsibility and engage with landlords to deliver more targeted and effective local responses.

Dr Julie Rugg’s review was also critical of the impact these changes would achieve. In her report she called the proposals:

“an extreme response given the limited nature of the problem. Change to the Use Classes Order introduces the need for additional activity that local authorities are ill‐equipped to handle.”

Because of how the Government has decided to bring in these powers, it is virtually impossible to block the move without a concerted push to get in place overwhelming parliamentary opposition.

HMOs play a vital role in providing much needed housing for students, young professionals and those on low incomes who rely on this type of affordable accommodation. Large cities across the UK greatly depend on shared housing as a first step. By making it more difficult and costly for landlords to provide this type of accommodation, these measures will reduce choice for tenants and increase pressure on local authority housing demands.

The effect on the market is still unclear, especially the long term effect on landlords’ businesses or the on young professionals, students, and other tenants who depend on shared housing. Specifically we have the following questions for government:

1. When will a landlord actually need to get planning permission? So far the Government has said planning permission will be needed when there is a "material change." That is too vague, although the Government has said this requirement will not be retrospective we will be seeking more clarity so landlords are not caught unaware.

2. This move will define the large number of ‘shared housing’ properties as HMOs. How will this classification affect property prices for owner occupiers?

3. The current finance options for landlords looking to bring new HMOs to market are tough. How will the mortgage companies take into account this move by the Government and will the upshot be that even more landlords find it almost impossible to finance new shared housing?

4. How are councils going to police this? The NLA’s worry is that the effect of these announcements will be to confuse tenants in choosing between professional responsible landlords having to incorporate extra regulatory costs into their rent levels and rogue operators renting properties below the radar. Local authority groups will need to show where the resources and funding for this policy will come from.

In addition the Government has also announced a consultation into giving local authorities the power to introduce new licensing schemes without having to justify their existence to central government. If introduced this will lead to a plethora of new licensing scheme s which will raise the cost of renting as landlords struggle to accommodate licensing fees into their business budgets.

The move is being interpreted as introducing landlord registration through the back door. The NLA will be regularly updating NLA members on it work to attack these proposals and how members can help. If you want to contact the NLA on either the new planning powers for councils or the Government’s proposed more landlord licensing please do so here.

Downloads:
• NLA Response to Government HMO consultation [ 470KB]

See also:
• Government Annoucement: Local powers for councils...

• Government Consultation: General consents for licensing
  schemes under Parts 2 and 3 of the Housing Act 2004

• NLA News Release: Shared housing under the knife

• NLA warns against a 'nimby's' charter