What will the new House in Multiple Occupation (HMO) licensing plans, introduced by Ealing Council earlier this week, mean for private Landlords and tenants across one of London’s largest boroughs?
Clearly there are cost implications. Landlords of properties with two or more storeys, containing four or more tenants, can expect to pay as much as £2000 per property for a five year license. There are also added responsibilities; if you hold a license you must also uphold the health and safety standards it stipulates and undertake a formal written tenancy agreement.
So will these costs to the Landlord be offset by the benefits of a better regulated arrangement for both parties, perhaps even leading to renewed tenancy and maximum rental income? At Strawberry Star we undertake tenancy agreements as standard and our comprehensive property management service includes maintenance and health and safety checks with a proven success rate in securing long-term lets for our clients. In our experience this initial outlay is well worth the investment in the long-term.
We welcome stricter control and greater transparency, not least as a means to dispelling the reputation of the dishonourable Landlord - which in the vast majority of cases is untrue and undeserved.
The borough of Ealing is densely populated with around 36,000 rental properties; we await the effect that more stringent regulations have on this proliferate market.
To obtain a licence for five years, landlords or managing agents will be required to pay a licence fee for each rented property in the designated schemes. The additional licensing fee is £1,100 for each HMO plus £30 for each habitable room and the selective licensing fee is £500. Failure to obtain a licence may result in prosecution and an unlimited fine. Applicants who sign up between 1 October and 31 December 2016 may be eligible to receive a 25% “early bird” discount. Those who are already members of a recognised landlord’s accreditation scheme may also qualify for a further discount of £75.