There are about 4.3 million households in the private rented sector in England. About 500,000 are houses in multiple occupation (HMO). A house is an HMO if both of the following apply:
- at least 3 tenants live there, forming more than 1 household
- the occupants share a toilet, bathroom or kitchen facilities with other tenants.
For large HMO's (note the requirements are not considered here) the landlord must register property with the local authority and obtain a licence. However national mandatory licensing currently only applies if properties are three or more storeys.
Each local authority will grant different conditions under a licence and these must be carefully considered and met by the landlord. The requirement of an HMO licence adds to the cost of establishing a rental property but if a landlord rents out such a property without a licence or does not meet the licence conditions they can expect the local authority to prosecute.
It is now proposed that flats and one and two-storey properties would also be subject to licensing. This aims to crack down on overcrowding and it is estimated that about 160,000 homes will be affected by the new proposals.
New measures to crack down on rogue landlords who let overcrowded homes have been announced by the Government. Under one component landlords renting properties with five or more tenants from two different households would for the first time need to be licensed.