In Defence of Liberty

Driven by data; ridden with liberty.

On HMO Licensing

Bath & North East Somerset (B&NES) Council’s consultation on the introduction of additional licensing for houses in multiple occupation (HMOs) ended on 30th November. The proposal would force landlords in the Oldfield, Widcombe and Westmoreland wards to gain a license to rent their property to three or more unrelated people, in any house that has ‘shared facilities’, like a communal kitchen.  These houses are notably shared by students. There is already mandatory licensing for larger HMOs. The council claims that this new licensing system is necessary to improve standards of accommodation and management in those wards.

As part of its legal obligations, B&NES Council published an evidence report to support the new licensure’s implementation. Our local council does not actually know how many HMOs there are in Bath, and believes their previous estimates may be understating the total amount by 50%. The evidence report has a graph showing a correlation between a ward’s total number of HMOs and the number of domestic waste complaints and street sweeping requests. However, the Housing Act 2004 demands local councils must collect evidence on the “HMOs of that description”, that is, what type of HMO the council wishes to license. In the case of B&NES Council, this means HMOs with shared facilities. It is noted that “no correlation was found between HMOs with shared facilities and service requests.” The report then states a correlation is re-established when you remove the wards of Kingsmead and Abbey, but no proper reason is given for their exclusion.

Despite B&NES Council’s concerns over HMOs in Bath, a survey of HMO tenants found that they are broadly happy with both their rented property’s quality and its management. This same survey found that 24% of HMO tenants were ‘not well informed at all’ about Council Services, and 31% did not know how to complain about the condition of their property.

Before B&NES Council embarks on its own experience with additional licensing, the experience of other cities should be investigated. The additional licensing system in Cardiff has been highlighted as a model for Bath. According to the Bath Chronicle, “a similar tougher regime in Cardiff has been credited with bringing down noise disturbances and fire safety complaints.” The licensing system only covers the Cathays ward, but Cardiff Council does not credit the reduction in noise disturbances and fire safety complaints to their new licensure. Their licensing system has major problems with its coverage and its enforcement. After two years in operation, the scheme at most covers 60% of the HMOs in one electoral ward. In order to initiate improvements, Cardiff Council serves notices on licensed properties.  For example, it has served 356 notices relating to security, but only 36 have so far been complied with.

Similar problems of coverage and enforcement may be observed in the first citywide additional licensing scheme in Oxford. Oxford City Council has received 2,541 applications for licenses, issuing 1,397 licenses under their scheme. After a series of erratic estimates, Oxford City Council now believes there are 5,069 HMOs in Oxford. Combined with 551 mandatory licensed HMOs, Oxford’s scheme has covered 38.4% of the city’s HMOs in the infant scheme’s first ten months. Despite the existence of about 2,000 unapplied HMOs in Oxford, there have only been 26 concluded court cases fining landlords for not having a license.

Landlords are charged by the council for their licenses, and this money is then used to enforce the additional licensing system. With little enforcement, the new licensure sometimes cannot capture enough licenses to sustain it, and may not fulfil its purpose of improving accommodation quality. A coagulated revenue flow leaves the licensing system whirring and spluttering; its corroded machinery is a distant design from the sleek shimmer promised in manifestos. In order to divert funds to revitalise the additional licensure, the council would have to make cuts in other areas, erode the council’s monetary reserves or raise council taxes.

Ultimately, licensing is a trade-off: the increase of both accommodation quality and management, in exchange for higher rents and less competition between landlords. Given that Bath has some of the highest rents in the country, this balance should be carefully considered. The problems with HMO management in these wards appear to be quite isolated, and are not in a significant proportion of houses. There are major problems with infant licensing systems, as they fail to cover the licensed area and the new rules are weakly enforced: only time will tell if these serious issues are ameliorated. For now, the local council should continue to use their accreditation scheme to raise housing standards.

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This entry was posted on November 26, 2012 by in Local Politics and tagged , , , , , .
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