HMO Results - 6. Questions received and answers and comments

As with the survey results, questions and feedback received from respondents will be considered as part of the decision process in deciding whether the scheme will go ahead, and whether any changes should be made prior to any designation being made.

Some of the questions included below have been included to provide additional clarification on the proposed scheme, although on the whole the information was already available within the consultation document and online resources associated with the consultation.

Generalised headings have been used to try to group questions and feedback that relate to the same sort of point in the same place, rather than simply a list of random questions. Inevitably, this will mean that some questions may appear under a different heading than would be expected, depending upon the contents of the question or feedback.

Questions may be paraphrased from the original response received to make it relevant to other responses received or to remove any colloquialisms, personal information, non-relevant information or expletives. Negative feedback or criticisms have been included, although may have been subject to editing to remove any parts that were irrelevant, whilst still retaining the original sentiment of the feedback.

Accreditation

Q. “Can you tell me would this replace University accreditation?  As its potentially a lot of repetition and but perhaps not so much focus on furnished accommodation? Would this be in addition or could it be combined?”

A. No, this wouldn’t replace it, it would be in addition. Where a property needed an additional HMO license and was accredited the inspection would cover both “parts”, as it does now for any mandatory licensable accredited properties which have been aligned so that they have the same expiry dates and so should only need to be inspected once every five years.

Charities

Q. “If a property is rented to a charity will the property be exempt from requiring HMO licensing.”

A. Charities are not exempted from licensing and are required to obtain a mandatory license for any applicable properties and would also be required to obtain one under the additional HMO licensing scheme as it stands.

Freeholders and mortgages

Q. “If freeholders need to provide a license and do agree I am sure they will charge leaseholders for this and stack a large profit margin on top of that will inevitably be passed on to tenants causing additional costs. So a fixed cost would be worth considering?”

A. The additional licensing scheme has a set fee schedule (as detailed in the consultation document). It is likely Freeholders will pass the cost on to their leaseholder, who will in turn have to pass it onto their tenants and increase rental. For a four-person flat the additional cost spread over a five-year period (length of most licences) this works out at c. £6.50 per week per tenant, so significant over a year, but not as onerous on a month-by-month level. Freeholders shouldn’t see it as an opportunity to make extra money and should only pass on the cost of the licence fee. They would have to explain any costs in their annual/bi-annual fees and charges to their leaseholder, so could be challenged on those, although that would be a matter between the freeholder and leaseholder(s).

Q. “Would purchasing a rental flat mean it would have to already be licenced by the freeholder to obtain a mortgage?  This would surely be an additional barrier to investment causing even more difficulties in students and others finding accommodation.”

A. It is likely that this would be dependent on each individual lender’s policy. It wouldn’t be a bar to a flat owner obtaining a licence from the council if their flat needed one. If the flat itself didn’t need a licence and only the freeholder did, it shouldn’t affect a leaseholder’s mortgage. In most cases a mortgage lender probably wouldn’t know if the building required a licence or not and so the issue wouldn’t arise.

Q. “If for example if I have a buy to let mortgage on a flat in a block that now requires the freeholder to apply for licence and they refuse I am in the impossible situation of having an unrentable apartment.  I could be in a fixed mortgage for 5 years with large exit penalties and no way of renting!”  

A. If the freeholder needed to obtain a HMO licence then the council would ensure, through enforcement if necessary, that they obtained it, so that shouldn’t affect any mortgage on a flat due to their inaction/refusal. The requirement for a freeholder to licence the building would be separate from any requirement that a leaseholder might have in respect of a licence for their individual flat. There may be some circumstances where a mortgage provider might have stipulations about renting/mortgaging a licensable property, but that will vary from lender to lender, and although comes up occasionally with mandatory licensing, is usually easily resolvable through discussion with the lender. In only a few cases have landlords had to change their mortgage to a different provider.

Registered social landlords and charities

Q. “In the past we understood that if a property we owned was rented to a Housing Association/Charity, the property would be exempt from requiring HMO licensing.”

A. Registered social landlords would not be subject to the additional HMO licensing regime, the same as it currently is with mandatory HMO licensing, although they are still legally required to conform to all HMO and Housing legislation and any guidance or Standards that are in place. Failure to do so could result in enforcement through other means, rather than through an HMO licence. Charities have never been exempted from licensing and are required to obtain a mandatory license for any applicable properties and would also be required to obtain one under the additional HMO licensing scheme as it stands.

Fees and charges

Q. “Landlords are really going to struggle with rising mortgage costs in the next couple of years and are already looking to exit, adding additional costs would be challenging potentially add to them considering exiting the market and moving to service accommodation.” 

A. Landlords often say that licensing is just a “money making” exercise; however, no profit is made on licensing fees, and in reality, the council will likely make a loss overall on licensing (including current mandatory HMO licensing) and it has to find this money from elsewhere to cover these costs. The council is duty bound by the legislation to try to ensure that housing stock is safe and suitable, but the costs in doing so are very high and especially with HMOs. Even with mandatory licensable HMOs, it is true to say that most HMOs inspected need some form of improvement or additional facilities or fire safety installations, despite the fact that mandatory licensing has been in place for many years. It is therefore almost certain that smaller HMOs that have never been inspected or been provided with advice, are going to have the same issues and defects. Without the additional licensing and some of the costs being covered, it is likely these properties will remain “hidden” and potentially sub-standard, and it will only be mandatory licensable properties and those owned by “good” landlords who try to do the right thing, that will be effectively regulated, which isn’t fair on those responsible landlords.

Owner-occupiers

Q. “I am a resident of Marine Ward and I have read the proposals with interest. Please may I ask a few questions.

1. Who are the people taking this initiative - does it mainly come from Council Officers or from Councillors? Has it been voted on in a Council or subcommittee meeting? If yes, please direct me to the relevant minutes and who voted in favour and who voted against?

2. What survey has been done to determine how many additional properties in River, Hotham and Marine Wards will become newly-licensable as a result of the proposal? What is the best estimate for the number of additional properties?

3. The consultation document seems to contain a contradiction. Page 3 of the letter says "The scheme will exclude any property .... where the owner lives in the property with no more than two lodgers" - but Page 4, Example 1, shows a Licensable Property with 3 or 4 occupants in 2 or more households. Please explain whether a property will become licensable if

(a) the owner lives there with 2 lodgers

(b) joint owners live there with 2 lodgers

(c) the owner lives there with 3 lodgers.”

A. As you will have read in the consultation document, the initial request for investigation into smaller HMOs came from councillors. All committee meeting minutes and decisions can be found on the council’s website. The Building Research Establishment (BRE) was commissioned to undertake research on HMOs within the district and the wards proposed for additional HMO licensing, and the data and results are shown within the consultation document and the BRE report appended to it, including estimated potential numbers of additional licensable properties.

a) the owner lives there with 2 lodgers - Not licensable under the proposed scheme (and not a HMO) as long as it is a sole owner-occupier with two lodgers.

(b) joint owners live there with 2 lodgers - Licensable under the proposed scheme (as there will be 4 people in more than 2 households). Also, if there were joint owners and their child AND 2 lodgers, then it would require a mandatory HMO license anyway.

(c) the owner lives there with 3 lodgers - Licensable under the proposed scheme (and is already a HMO regardless of any additional licensing and subject to HMO legislation (but doesn’t need a mandatory HMO license).

Example 1 on page 4 of the letter refers to a building owned by a freeholder with three or four occupants in two or more households, but does not refer to it being an owner-occupied property.

Comment: “I think the scheme is good if it controls conditions in multi occupied houses.” – Local business operator

Comment: “Council cannot provide homes for people, so smaller HMO's are a valuable asset to the community and keeping people off the street” – Local property manager

Comment: “I agree with the licensing fee but the consultation document states that some costs are still possible to be likely as the fees will not cover the overall operating costs of the HMO licensing proposal. I don't believe there would be fault in the council making a profit instead through higher fees as it shouldn't be up to council taxpayers to pay to ensure that landlords are providing quality accomodation [sic] if landlords are renting out for a "for-profit" motive.” – Local tenant

Comment: “I think that all properties should be managed propely [sic]. Ive lived in several hmos and flats and nearly all have been of poor quality with disrepair and bad maintenance. They could be nice places to live, but weren’t. The manager wasn’t the owner but told the owner what they wanted to hear and never did anything to help of repair damage etc. He was ment [sic] to be a local businessman and proper manager of the flat I lived in but did no repairs, fobbed me off and was not nice about anything. I wouldn’t buy one of his carpets from him let alone rent another flat from him. Landlord and managers seem to think they can just take the rent and do nothing for it.” – Local tenant

“The proposed licensing scheme would be appropriate in addressing concerns of inadequate HMO housing and the consultation provides good reasoning for this that I agree with.” – Local tenant

Comment: “For what it's worth, I think all this will do is push out decent individual landlords, like myself, that actually do care about their properties and their tenants.  Costs are going up all the time and I have noticed the amount of landlords selling up is increasing rapidly, thus putting a larger strain on the rental stock and pushing rents up further.  If this scheme is adopted I will have to pass on the full amount to my tenants or sell up.” – Local landlord

Comment: “The letter for consultation you sent to all areas has wrong email address on it for public to respond to. This needs rectified [sic] or cancelled and started again. It is 15^th June but consultation started 3 days earlier, but wrong details supplied by incompetent council, so now need re-sending and rectified at this liable persons cost, not tax payer. As already explained. Corruption at its highest by this council.” – Local landlord, agent and business owner

Reply: “Thank you for your e-mail regarding the council’s additional HMO licensing consultation. It will be added to the correspondence considered by the council in its deliberations on whether to introduce additional licensing in those areas proposed.

The consultation letter does have the correct e-mail address on it, and this has been used successfully by other respondents. I am sorry that you had difficulty in using the e-mail, although I understand that you have now successfully managed to send an e-mail to that address with comments for consideration in the consultation. It will be added to the correspondence considered by the council in its deliberations on whether to introduce additional licensing in those areas proposed and if it is introduced, how that will look.

As you will have seen from the automatic e-mail response, the council does not respond or provide answers to every e-mail received to this address, but rest assured that all e-mails received to it will be considered during the council’s deliberations. This is a consultation on the proposed scheme and the e-mail address is part of that; however, the e-mail address isn’t a dedicated “question and answer” service, as most answers can be found in the consultation document or website. Questions not covered by the documents and website will be answered in the post-consultation results, where raised by consultees. Those e-mails or representations that simply make statements will be considered as part of the consultation by the relevant committees.

The consultation did commence on 12 June 2023 and responses to the letters was already being received by the 13 June, so letters were being received at the commencement of the consultation. The council cannot of course make any comment on the vagaries of the postal service and letter delivery times. The consultation was also advertised in advance of 12 June in some locations and online, so respondents could actually have submitted any responses prior to the formal commencement date.

If you haven’t already, perhaps you would like to complete the online survey, as this will further help in consideration by the council on the implementation of any scheme going forward. It is always advantageous for any proposal to receive constructive feedback on what is being considered, whether in favour or against the proposal, and is much easier for the relevant committees to take it into account and be of use, whereas accusations against officers and claims of corruption and incompetence will often result in the respondents comments being seen as simply anti-council rhetoric and not genuine interest or feedback about the issue being discussed.” – Arun District Council

Comment: “It is so important that a balanced selection of properties are in all areas. All should be monitored as much as possible so that Bognor remains a pleasant place to live and invest in.”  - Tenant in one of the proposed additional licensing wards