Thursday, July 13, 2006

An uneven playing field for landlords

The new HMO licensing regulations are now effective and the three month 'grace period' has now ended. Landlords who have failed to obtain a license face fines of up to £20,000, plus risk tenants applying for rent repayment orders while being unable to evict them via the section 21 procedure. But have the government played fair with landlords?

In a recent press release the British Property Federation accused government of deliberately making the regime more complex by allowing local discretion as opposed to following a standardised approach across the country.

For example there is a huge variation in license fees, which run from under £100 to over £1,000 per property (for example see the HMO license fee list I am developing). This variation is massively unfair on the landlords in the expensive boroughs, particularly those with a large portfolio, who will see their colleagues with similar properties paying a fraction of the fees they are having to pay. Tenants will suffer also as rents will no doubt rise to cover this additional expense. It appears that the governing legislation (the Housing Act 2004) allows capping but for reasons best known to themselves government preferred to allow the current uneven playing field.

The BPA also criticise the government for its delay in its preparations which meant that local authorities were not up to speed in April when the regulations first came in.

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