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Under the skin of the letting market

Here we share news and views on both the local letting market in & around Oxfordshire and all planned and recent legislation.

Changes to HMOs in Oxford – an update

Frank Webster, Director, appeared on BBC Oxford’s Drive Time show yesterday to comment on the latest news regarding Houses in Multiple Occupancy. You can listen again until 16th August, or alternatively you can read more below.

A limit has been put on the number of shared properties that are allowed in Oxford. On Monday night, Oxford City Council approved a cap on the number of houses shared by students or groups of unrelated people. Only one in five shared houses will be allowed on any one hundred metre stretch of road. David Cox is from the National Landlord Association, and I asked him how this would affect the rental market.

“This is something that is going to affect everybody, particularly people on local housing allowance or housing benefit as they are going to see themselves being pushed further and further out of the city as landlords take students to let the very short number of properties that are going to be available.

This is a change to the planning system in an attempt to solve problems like rubbish and anti-social behaviour. Our main concern is that no local authority – Oxford included – that has instituted one of these Article 4 directions has ever been able to say how changing the planning system for landlords is going to affect anti-social behaviour on the part of the tenant.”

If you are a landlord and you have, say, three houses in a row all with students in them at present, are you affected by this?

“No, you’re not. It will only be for new houses in multiple occupation (HMO).”

Does that mean that if all three tenancies end at the end of term, then only one of those houses will be allowed to be re-rented as an HMO?

“No. If you can demonstrate that the property is already being used as an HMO then you will be able to continue using it as an HMO. However, if you have an HMO at the moment, and then you let it to a family next year, and then to a group of students the year after that, you will need to re-get planning permission before you can let it out to that group of students.”

What do you think it will do to rental prices?

“It depends. We’ve got no evidence at the moment. We can certainly see that it might push up rents of the properties in predominantly student areas where there becomes a shortage of available property.

But we’re concerned at the moment that it is going to divert the already scarce resources any local authority has away from targeted enforcement of the rogue landlords. The professional, the good landlords will get these Article 4 directions and will comply with the legislation. We’re already seeing that, although it’s a very small minority of landlords, some don’t care what the regulations are and they are flagrantly flouting them at the moment. They will continue to do so and we expect to see more rogue landlords operating in these areas under the radar.”

Frank Webster joins me now, he’s from Finders Keepers. Do you agree with what David has had to say?

“This can be complicated for someone just to listen to. In essence, my question is what is the issue that Oxford City Council have got with HMOs? They won’t listen to us, and we hear that they’ve now decided to proceed with this article 4 direction.

I do agree with David in that what is now going to happen is that we’re going to see is a shortage of properties for sharers. This has become muddled up because this was originally intended to control the HMOs that were large houses with 6 or 7 students. What has happened now is that it has filtered through so that it’s now anybody. So it includes our youngsters who have finished their college career and who share as their natural first means of accommodation. All of these houses are now deemed to be HMOs – there is no differentiation between whether you are a student or in full time employment.”

But there was a problem with students, I don’t know whether you have ever lived in a street that has many student houses?

“I grant that that is a good point and clearly for those people living in those streets, this is good news. But I don’t think it’s for Oxford City Council to tell people where they can live in Oxford.”

What do you think it will mean for some of the groups that this wasn’t targeted at?

“I think what you’ll see now is that certain landlords will pull out of that shared market, therefore the people that want to share will find fewer properties and consequently they’re going to be paying higher rents.

In essence, we are in favour of the introduction of licensing because it improves the health and safety, but the combination means that there will be fewer houses to rent. An unintended consequence is that there will be less property for key workers, despite Oxford City Council’s policy saying that they need more properties to meet the demand for those people.”

So bearing in mind that we’ve acknowledged that there is a problem with large numbers of large student HMOs, and that this perhaps goes beyond that, what would you like the council to do?

“We would like the policy to focus on the student houses and on the larger houses. For example, three nurses will be deemed as an HMO from February next year and that just seems Draconian.”

The council says that new rules addressed long-standing issues that had not been properly tackled. One in five people in Oxford live in an HMO, and inspections over recent years have found that almost three quarters of these properties have been unsafe.

“We don’t have a problem with the health and safety side, let me emphasise that. It is clear that every property should be safe. We have a problem with the planning side that they are introducing through this quirk of the planning acts on the Article 4.”