The Prime Minister recently announced that a national compulsory licensing scheme for private landlords would be introduced. There has now been some clarity on the matter.
The licenses will apply to Houses in Multiple Occupation (HMOs); however, the definition of this property type will change.
The Department for Communities and Local Government has provided clarification after a request for further information from the National Landlords Association (NLA).
Important Information Regarding Landlord Licensing
The new scheme will be an extension of the existing mandatory HMO system, which concerns homes that are three or more storeys high and occupied by five individuals or more that make up two or more households.
The Government are yet to consult on the changes.
Some alterations could be that the three storeys rule is reduced to one or the amount of sharers could be lowered.
For landlords, this could cause problems. They may believe that they have a typically normal rental property, but could be forced to license under HMO definition changes.
Additionally, there may be situations where a property is a licensable HMO at some points but not others, depending on who lives there.
There is not yet information available on when the Government will consult on the matter.
Landlords and letting agents will be thankful for this clarification, but there are still worries.
Many rental properties are not currently covered by licensing schemes, as many local authorities do not operate them. If all of a sudden large amounts of properties require licenses, this will create a problem for councils, which are generally under-resourced.
Furthermore, concerns have been raised over the small print of the Queen’s Speech, which has now been published.
This indicates that the Government “will build on the national roll out of the landlord scheme established in the Immigration Act 2014 and make it easier to evict illegal migrants.”1
There is no answer to when this roll out will occur and no information is yet available on how effective the pilot right to rent checks were in the West Midlands.
Landlords and agents should be prepared for the responsibility of checking the immigration status of all prospective tenants.
It is also unclear how the Government will make it easier for landlords to evict illegal migrants. Lawyers warn that it could be a legal ordeal.