Shock claim: 75% of HMO properties in London operate outside the law

Licensing schemes are failing London’s tenants as councils are ‘drowning in paperwork’. New research for safeagent conducted by London Property Licensing found 130,000 unlicensed properties in London which should be licensed under either selective, additional or mandatory HMO licensing schemes.

The research found there are over 310,000 private rented properties in London that require licensing under mandatory HMO, additional and selective licensing schemes implemented under the Housing Act 2004. Whilst the mandatory HMO licensing applies across England, additional and selective licensing schemes are introduced on a Borough by Borough basis.

Non-compliance rife

However, non-compliance in the capital is rife. Licence applications cover just 25% of 138,500 private rented properties that require licensing – without a licence application submitted, these properties are being operated illegally – landlords – and their letting or managing agent, can face prosecution and fines up to £30,000.

Since October 2018, the mandatory HMO licensing scheme has applied to most HMOs shared by five or more people. In some boroughs, additional licensing schemes have extended licensing to properties rented to just three or four unrelated people.

Selective licensing schemes are different and extend licensing to all private rented properties including single family lets within a certain geographical area. Such applications have been submitted for 85% of the 173,000 PRS homes in London- a non-compliance rate of 15%.

Added to the confusion, many London Boroughs are struggling to process over 24,000 licence applications.

Isobel Thomson (left), safeagent CEO, said,“The results of the survey are concerning. Consumers are not being well served and indeed many are being placed at risk through this mish mash of licensing schemes.

“Right now, the system isn’t fit for purpose and Councils are drowning in paperwork. Landlords needing property licences are either deliberately evading the schemes or are in the dark concerning their legal responsibilities and tenants are being placed at risk.

“If the compliance rate for HMO licensing schemes is only 25%, how can these schemes be effective? Ultimately this is about proper use of public money and consumer protection.

“Where are the assessment procedures for Councils who have schemes in place? Isn’t it time we went back to the drawing board to come up with a simple, streamlined system that works for all?”