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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.

HMOs on BBC Oxford

On Monday 30th January Frank Webster, Director, appeared no BBC Radio Oxford to discuss the new HMO Licensing in Oxford.

You can listen again by clicking here (Frank Webster was on around 1 hour and 10 minutes into the show), or see below:

Today is the day that landlords in Oxford have to register if they want to let their property out as a house share. The city council have introduced new licences for Houses of Multiple Occupancy (HMOs). Last year they started the roll-out and asked landlords of larger properties to register and over 900 have done that. Today everyone else must register and the city council think that will include another 4000 properties. Frank Webster is from the letting specialists Finders Keepers and joins me now.

What exactly is involved in these HMO Licences?

Basically, landlords need to meet a certain set of strict criteria in order for their house to be acceptable to let now, and henceforth, in multi-occupation. The council now want it to apply to three or more persons, so three nurses sharing a rental property would now be an HMO. What landlords now need to do is to get an inter-linked fire alarm system, such as a smoke detection system, to have a fire-door in the kitchen, and possibly elsewhere, and some protection under the stair area. That in itself doesn’t sound too Draconian, but actually it is causing quite a problem for a fair few landlords in Oxford.

But it sounds like the planned improvements which have now come into force will make a good difference.

Yes, it’s a difficult one this one, because clearly all of us want houses to be safe so we don’t have a problem in making sure that renting is safe, and nor do the vast majority of landlords across Oxford, I’m sure. That’s not the problem. It’s where you draw the line really. Three people renting in, say,  a normal, semi-detached property with two storeys…it seems to be taking things to the extreme to be introducing lots of extra legislation for that sort of classification.

I think it all stems back to the fact that Oxford has a lot of HMOs. It has two universities, we have a lot of shared letting in Oxford, and originally the legislation was drawn up quite clearly for the larger properties – five people or more in a property – and that makes sense, but when you get down to three sharers, you have to ask “Where is it going to stop?”

Are we really going to see people losing their homes?

No, what you’re going to see is fewer properties available to sharers because a lot of landlords are saying “I don’t want to go through this procedure, to spend £1400 on getting the licence” so there will be less choice for people wanting to share together and that worries me – where are these people going to live?

So presumably if you live in an HMO at the moment and the landlord thinks “that’s just going to cost me too much” then from today effectively he’s either breaking the law or you’re going to have to move out.

I think there has been a bit of over-dramatisation about this eviction side of things, around the word ‘eviction’ – that can only happen if a landlord goes to court to actually get a tenant out. So no landlord can go into a property and start throwing people out, let’s be clear about that. But yes, at the end of that tenancy if the landlord is not prepared to do the things that the local authority wants then they won’t take the three sharers, they’ll go down to a couple or a family.

Where would you put the limits, out of interest? Three is too small a number for you, so four? Five?

I would stay at five really, but that’s another argument!

Councillor Joe McManners, in charge of the scheme at Oxford City Council, appeared on the same show (1 hour 43 minutes).

That sounds like a fairly persuasive argument from Frank Webster. These plans are too extreme, aren’t they?

No, this is all about trying to improve the quality of housing for tenants. We know that because supply is so limited and demand is so high, people don’t really have a choice of where they go, so it’s too easy for bad landlords to get away with dropping standards down. Really what we need to do is make sure that everyone can live in decent housing.

Hasn’t the way you’ve handled this meant that perhaps you haven’t foreseen some of the circumstances that will now develop, that some landlords will take properties off the market  – effectively we’re going to see a shortage of these houses that we desperately need in Oxford.

I don’t agree with that. The standards that we’re talking about are fairly basic standards. We’re talking fire safety, a decent amount of space for people to live, that the landlord is a fit and proper landlord without a criminal record, these are all fairly standard things. All we’re doing really is making sure they’re consistently applied across the whole of the city. Economically, it doesn’t make any sense for landlords to take their house off the market. The HMO market is still very lucrative.

We’re talking about taking it off the market for HMOs, we’re talking about those kinds of properties. There is a cost to landlords, isn’t there, which is in excess of £350 – that would just be passed on to the tenant wouldn’t it?

There is no reason why it should be. If you look at how much a landlord would get from a year renting out a house, they probably get around £20,000. We’re talking about £300 for the first year and then £150 the year after that, so we’re talking about pretty small amounts, and really that will give landlords the ability to say “Our house is a decent house to let” and it also gives tenant the peace of mind that they know they’re renting a safe house.

Of course. Now, it’s fair to say that there is somewhere in the region of 4000 of these properties, so that’s quite a lot of money that the council is going to cash in on. What will you be spending that on?

It’s a purely self-financing scheme. We’re not allowed legally to make any money from it, but equally we don’t want the tax payers to be paying for it either, so the whole thing self-finances. The extra money that we get in from the landlords is spent on the people who do the work and do the inspections.

If you find this subject confusing or worrying, please have a look at our calm and rational guide to HMOs: