HMO Results - 3. Background

Mandatory licensing of HMOs came into force in England and Wales in 2006 at the same time as the rest of the Housing Act 2004 and originally applied to properties of three storeys or more with five or more people making up two or more separate households living in them. Landlords of these properties are required to apply to the council for a licence, pay a locally set fee to cover the cost of administering the regime, and the property must meet minimum standards which include, room sizes, provision of amenities, for example bathrooms and kitchens, gas, electrical and fire safety installations, and the landlord must be a “fit and proper” person to hold the licence.

On 1 October 2018 the government introduced “The Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018” which removed the storey requirement as part of the definition for those properties required to be licensed under the mandatory scheme. This was partly due to a rise in house prices which resulted in more people being unable to afford their own home.  Because of this, there had been an increase in the private rented sector over the previous decade which in turn saw an expansion of the HMO market. Some HMOs are occupied by the most vulnerable people in our society. The government was concerned that people were living in properties that were not built for multiple occupation, and the risk of overcrowding and fire was greater than with other types of accommodation. As demand for HMOs increased in the decade since mandatory licensing was first introduced, there was a significant increase in properties with fewer than three storeys being used as HMO accommodation, notably two storey houses originally designed for families and flats. Some properties being rented were sub-standard, overcrowded and potentially dangerous. The growth of HMOs also had an impact on the local community, including inadequate rubbish storage leading to pest infestations and other health and safety problems.

Part 2 of the Housing Act 2004 gives local authorities the power to introduce additional licensing schemes for HMOs or selective licensing schemes for the entire private rented sector to assist with additional controls to tackle specific issues that may be prevalent in certain wards or the entire district.

Sections 56 and 57 of the Housing Act 2004 provide local authorities with the power to designate areas as being subject to (discretionary) additional licensing schemes, in relation to some or all of the houses in multiple occupation (HMO) in that area which are not already subject to mandatory HMO licensing.

In 2010, a general approval was issued by the Secretary of State for Communities and Local Government to enable local authorities to designate additional licensing schemes in their area without the government’s approval, provided there is a minimum 10-week consultation period. Once the designation is in force there must be a period of three months before it can come into operation.

When deciding on introducing an additional licensing scheme, the local authority must:

• Consider that a significant proportion of the HMOs, that will be subject to the proposed designation, in the area are being managed sufficiently ineffectively as to give rise, or likely to give rise, to one or more particular problems either for those occupying the HMOs or for members of the public.
• Consider whether there are any other courses of action available to them that might provide an effective method of dealing with the problem or problems in question.
• Consider that the making of the designation will significantly assist them to deal with the problem or problems.
• Consult persons likely to be affected by the designation.
• Consider any representations made in accordance with the consultation and not withdrawn.
• Have regard to any information regarding the extent to which any codes of practice approved under section 233 have been complied with by persons managing HMOs in the areas in question.

Any additional licensing scheme must form part of the authority’s housing strategy and seek to adopt a co-ordinated approach in connection with dealing with homelessness, empty properties, and anti-social behaviour affecting private rented property. This has to be combined with other courses of action available to the local authority and those measures available to other persons.

Concerns had been raised that the increase in the number of HMOs, especially smaller ones that do not currently require a mandatory licence and section 257 HMOs was resulting in poorer quality accommodation.

Arun District Council’s Vision 2022-2026 sets out that we will be “delivering the right homes in the right places” and that to achieve this, amongst other measures, the council will “ensure the existing housing stock in the district (private sector and council owned) is maintained to a high standard”.

In 2020 Full Council asked officers to look at the quantity and quality of HMOs in wards where there were high concentrations of such properties. This initial research was undertaken on behalf of the council by the Building Research Establishment (BRE).

At the Housing and Customer Services Working Group meeting on 5 November 2020 councillors recommended to continue to research and gather further evidence to help establish whether additional HMO licensing or selective licensing of the private rented sector was justified.

This decision was approved by Cabinet on 14 December 2020 and officers instigated the process of procuring the services of a company to undertake the required additional research and provision of a supporting report. This was again undertaken by the BRE on behalf of the council.

A report on options for introducing further controls on the quality of houses in multiple occupation was presented to the Environment Committee on 14 July 2022. The committee agreed to instigating the consultation process for a proposed additional licensing scheme for houses in multiple occupation, including section 254 and section 257 HMOs, for the Marine, Hotham and River wards.

The committee also recommended to the Policy and Finance Committee and Full Council that additional resources be approved to support the consultation process required to implement the additional licensing scheme for houses in multiple occupation be approved.

At the Policy and Finance Committee meeting on 6^th September 2022 the committee resolved to recommend to Full Council that the additional resources to support the consultation process required to implement the additional licensing scheme for houses in multiple occupation be agreed. The proposal was welcomed as it was recognised that anything that could be done to enhance the quality of HMOs and to ensure that the services around them were adequate to cater for the number of people residing in HMOs was a positive move. The resolution was agreed by Full Council on 29 September 2022.

The BRE final report concluded that, based upon the modelled data, there was sufficient evidence to support the introduction of an additional HMO licensing scheme in Arun. The analysis indicated that conditions in many of these properties, where sharing of cooking, washing or toilet facilities is happening or where a building has been converted without Building Control approval into self-contained flats, may be below acceptable standards. However, these poor conditions are being missed as these properties are seldom or never inspected, except upon receipt of individual complaints and therefore on a purely reactive basis. Detailed analysis of HMOs and housing in the Private Rented Sector (PRS) is included in the report “BRE integrated Dwelling Level Housing Stock Modelling and Database for Arun District Council: Additional Analysis of the Private Rented Sector, including HMOs (21 September 2022)”.