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I have just spoken to my local HMO officer and he has advised that the mandatory licensing may extend to include properties of 2 storeys with 5 or more tenants. I was wondering if anyone has heard about this possible change? what are your views?
Yep!Government proposes to extend HMO licensing Licensing and compliance in 2017
In the future, all HMOs (3 or more sharing) will require a licence (its coming for sure)
OK based on your contentions of which I have no doubt how will lenders regard this new HMO classification?
Very few if any LL will have an HMO mortgage on such properties.
That being the case would a lender consider that a LL was in breach of their standard BTL mortgage conditions?
If they were would the lender require change to an HMO product?
Would the lender expect the LL to comply with HMO requirements!?
Cos no LL would comply.
That being the case what would happen if the LL failed to pass the now more stringent PRA regulations!?
One presumes that the LL would just have to get rid of the 3rd tenant.
Doing that might make the property unaffordable for two tenants
I've said it before and I'll say it again this will be the most widely flouted licensing regime ever.
There is simply no way a council will be able to detect whether there are two or three tenants occupying a property.
Classifying a property as a HMO could have enormous ramifications for the LL and it is for that reason that most LL will ignore this licensing regime.
It is just another sort of tax grab by councils desperate for more income
Well they won't get it.
Any LA with such 3 tenant occupied properties will find LL cancelling management contracts with them for obvious reasons.
The LL will then simply self manage with allegedly just two tenants occupying the rental property.
All the flats round my way have 3 or more tenants occupying and I can assure you none of the LL will ever license them as HMO.
Most of the tenants are EU nationals and don't register on the ER.
This HMO licensing regime apart from that which currently exists is pathetic and should be abolished as it will be impossible to enforce.
Existing HMO legislation is fair enough, but not the new proposed stuff.
It is a tax grab pure and simple
There are no safety ramifications for a purpose built two or three bed property to need a HMO license with three occupiers.