Agenda item

Report attached.

Members received a joint report of Councillors Kath Pratt, Portfolio Holder for Housing Health and Wellbeing and Steven Smithson, Portfolio Holder for Environmental Services, which provided details of an updated House in Multiple Occupation (HMO) Policy.

Councillor Kath Pratt indicated that the report complemented the previous item on Private Sector Housing Enforcement and set out the policy framework and fees for HMOs.  The fees would be set to cover the licensing costs, application process, compliance monitoring and enforcement.

Approval of the report was not deemed a key decision.

Reasons for Decision

The existing House in Multiple Occupation (HMO) mandatory licence scheme had been reviewed and the range of properties now falling under the scheme had been extended.  The report therefore recommended the setting of fees in line with the new regulations which required Cabinet approval.

Selective Licencing which had designated parts of Accrington and Church for selective licensing was coming to an end on the 4^th March 2023, and this updated policy strengthened the Council’s position to deal with non-compliance.

The Housing Act 2004 introduced provision for licensing in the private rented sector (PRS) to raise standards in properties considered to present the highest risk to the health, safety and welfare of occupiers.  In 2006 the mandatory licensing regime for Houses in Multiple Occupation (HMOs) had come into force.

The legislation prior to 1^st October 2018 had required properties with 3 or more storeys and let to 5 or more people from 2 or more households who shared amenities (kitchens and bathrooms), to be licensed by the local authority.

In December 2017 the Government announced that it would extend mandatory licensing of HMOs to cover all properties with 5 or more occupiers living in 2 or more households and sharing amenities, regardless of the number of storeys.  The necessary regulations had been brought into force in October 2018.

The proposals would bring smaller privately rented properties into the licensing regime e.g. two storey shared terraced housing, as well as purpose built flats where there were up to two flats in the block and one or both of the flats were occupied by 5 or more persons in 2 or more separate households.  This meant some shared flats above shops would need a licence as well as some small blocks of flats not connected to commercial premises.

It would be the individual HMO that needed a licence and not the building within which the HMO was situated e.g. where a building had two flats and each was occupied by 5 persons living in 2 or more households, each flat would require a separate HMO licence.

The benefits of extending HMO licensing included increased regulation of the private rented sector which should improve property condition and management standards through a cost recovery regime.

Potential impacts included increased costs for landlords relating to the purchase of a licence and meeting property standards and management regulations.  Some landlords might also be required to reduce occupancy in their properties, if the property was found not to be suitable for the existing number of tenants.

Section 63(3) of Part 2 of the Housing Act 2004 provided that a Local Housing Authority (LHA) might require an application for an HMO licence to be accompanied by a fee.  This fee was at the discretion of the LHA but should, according to Section 63(7), reflect the following:

a)    all costs incurred by the LHA in carrying out their functions under this part of the Act; and

b)    all costs incurred by them in carrying out their functions under Chapter 1 of Part 4 of the Housing Act 2004 in relation to HMO’s (insofar as they were not recoverable under, or by virtue of, any provisions of that chapter).

As noted above the costs of implementing mandatory licensing would be covered by the licence fee, on an officer cost recovery basis.

The fee charged by local authorities must be in two parts:

• Part 1 for the consideration of an application and the determination of the application, and
• Part 2 for the monitoring of the licensing scheme and housing conditions where a licence application had resulted in the granting of a licence.

The model was based on a proposed fee of £790 for a new HMO licence application, inclusive and the processing of a licence (new or renewal) for either 2 or 5 years (including granting and rejecting the licence).

The current level of mandatory HMO fee income did not cover the full cost of managing and operating the licensing scheme.  The recommendation within the report sought to address that issue.

The Act permitted Councils to charge a fee that covered the costs incurred in carrying out the function of licensing HMOs, including the cost of promoting and effectively implementing the scheme.  The proposed fee for the HMO licence running costs, including compliance monitoring, inclusive of a full inspection visit on two occasions throughout the licence period for both 2 or 5 year periods was £440 (Appendix 1).

Collecting fees at the proposed rates would provide income in accordance with services provided.

Fees would be reviewed annually to better reflect any demand or cost savings.

There were no alternative options for consideration or reasons

Resolved                                    -    That Cabinet:

(1)    Note the report on the updated House in Multiple Occupation Policy; and

(2)    Approves the Policy for immediate implementation and the associated fees and charges for implementation with effect from 1 January 2023.