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Blog The big HMO Licensing gamble

The Government is on track to introduce an extension to Houses of Multiple Occupation (HMOs) in October 2018, according to Housing Minister Dominic Raab.
The Government set out its proposals last year, which involved mandatory licensing for properties — regardless of the number of storeys — that are occupied by five or more people from two or more households. Currently, HMO's of three or more storeys fall in to mandatory licensing.

The new rules will go before Parliament in February, but in response to a question in Parliament by Liberal Democrat MP Wera Hobhouse, Mr Raab set out a timetable for their introduction.

He said: “The Government proposes to extend the scope of mandatory houses of multiple occupation (HMO) licensing, so that a licence is required for HMO's with five or more occupiers. We published our response to our HMO reforms consultation in December 2017, and we plan to lay the necessary regulations before Parliament shortly with a view to bringing them into force (subject to approval) in October 2018.”

However, this is just the start of the story. 

Many councils simply do not know how many HMO's will fall under mandatory licensing if the extension happens. A lack of credible intelligence on the number of unlicenced HMO's is for many councils proving a major stumbling block in establishing how any change to mandatory licensing will impact on their day-to-day operations.  Many university towns are predicting that they will have to deal with hundreds more licence applications from HMO's that have become licensable under the new rules.

Unprepared councils could really find themselves in trouble if they are suddenly presented with a significant uplift in licence applications. Limited human resources and I.T systems that are simply not up to the challenge of the licensing process. A process that requires significant data validation and administration will mean that councils need to change their approach and look for effective solutions.

University towns, sea-side towns and inner London councils beware. Council tax, benefits records and the electoral register will identify some HMOs, but this will not provide an accurate picture for council officers to base their estimations.  Pro-active Councils who have developed relationships with portfolio landlords and letting agents will clearly have an upper hand, but even their view of the landscape will be unclear. 

By employing the latest digital software solutions, councils can simplify the process of licensing HMOs, and effectively deal with any increase in application numbers.  By moving from legacy paper-based solutions to ground breaking digital solutions such as Rocktime’s industry leading verso™ software, councils can protect tenants and drive up standards in the private rented sector by freeing up officers' time to inspect and enforce. It would be a real shame if the benefits of this change to mandatory licensing are diluted because our hard-working councils are simply unable to deal with the numbers presented to them.

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