HMO Licensing Scheme Progress Reports

Introduction

The purpose of this report is to provide information in relation to the HMO Licensing scheme 2021. This scheme was introduced in June 2021 following a statutory consultation exercise which was carried out in autumn 2020. The scheme is due to end in June 2026.

Feedback received during the consultation exercise highlighted the need to report regularly throughout the scheme on progress.

Background

The Council has operated HMO licensing since 2006, initially this was restricted to mandatory licensing, however in 2011 the Council introduced a citywide additional HMO licensing scheme which meant that every HMO required a licence to operate.

The council have always been clear that Additional HMO Licensing in Oxford will be used to improve the HMO stock in the city, this continues to be a significant undertaking by the Council.

The overall purpose of the licensing scheme remains the same as it was when it was first introduced in 2011 that is  to: ‘alleviate the housing situation by setting and maintaining minimum standards across the city in the most vulnerable sector of Oxfords private rental market’.

This is also major contributing factor to the Councils Corporate aim to “Deliver more affordable housing” by improving conditions in the private rented sector in the city.

HMOs

HMOs provide a significant amount of accommodation in Oxford and form an important and valuable part of the Housing market. However the conditions and practices associated with them have caused concerns over a number of years. The problems associated with living in a HMO have been well documented over the years and are well known to professionals working in the sector. Whilst it is clear that there have been improvements made to HMOs; the experience over the years, in Oxford, is that some of the worst conditions continue to be present in HMOs, especially those found lacking a HMO licence

Licensing of HMOs

The Council operates a HMO licensing scheme which is citywide and covers all HMOs ie those occupied by 3 or more persons and also includes properties converted into self- contained flats, where the conversion work was not carried out in accordance with the Building Regulations 1991.

The Council have, since licensing was first introduced in 2006, undertaken an inspection of the HMO prior to the licence being issued. These initial inspections ensure that one of the critical aims of the scheme, to improve HMO stock conditions, is being met.

HMO licensing in Oxford is both a reactive and a proactive service, with property inspections being integral to the licensing process both initially and further inspections to check compliance. The council also investigates service requests from HMO occupiers and neighbours as well as providing help and assistance to landlords. The council investigates cases where HMOs are suspected of operating without a HMO licence, when such cases are identified a robust approach is always taken with a number of cases resulting in the landlord receiving a financial penalty.

Processing HMO Applications

The landlord/owner has the responsibility for submitting a valid application for a HMO licence, however the council has found that even after a number of years of licensing operating in the city, reminders need to be sent to ensure that renewals are made in a timely manner so as to ensure landlords are not operating without a licence.

Since the introduction of HMO licensing in Oxford, HMO properties have only been issued a licence following a full inspection. As part of the application process, inspections inform licence conditions with time scales set for completion proportional to the health and safety risk to the occupants. A licence is then issued for one year to ensure the landlord completes any required work and complies with standard conditions, such as sending in the gas safety certificate annually. During this year, further inspections are then made to check compliance with the conditions set on each licence. In recent years the council has encouraged the submission of photographic evidence of completed works where appropriate to increase the efficiency of the overall process. Whenever an initial inspection or compliance inspection is made this arranged by prior appointment to ensure that time is not wasted through lack of access to the property.

When renewal applications are received for existing HMO properties a decision is made as to whether or not the landlord has demonstrated compliance. If it has not been demonstrated, the landlord is restricted to a one year licence and will likely incur the higher renewal fee.

Licence conditions

Each HMO licence is granted with conditions. There are a number of conditions which must be included with every HMO licence granted, these include conditions relating to such matters as gas safety, electrical appliances, furniture, smoke alarms and details of the occupants. Since October 2018 all licences have also been required to include conditions regarding minimum room sizes and waste disposal. These are applied by all Councils across England and Wales and are often referred to as the ‘mandatory conditions’.

The Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006 Schedule 3 sets out the prescribed standards (minimum standards) for HMOs. The Council has an adopted Amenity and Facility Guide to expand on the prescribed standards and outlines what the council considers as appropriate and necessary facilities. This guide was reviewed in 2018, in consultation with landlords and agents with the latest version published in 2019. A guide ensures consistent standards and allows landlords, agents and tenants to understand the standards they can expect in HMOs. Decisions regarding deviations from the prescribed guidance are made on a case by case basis.

Applicants can make representations to the council concerning the conditions that are proposed to be applied to a HMO licence before it is granted.

Monitoring data

Application Processing and Administration

As there was a period of time between the expiry of the previous scheme and the new scheme in June 2021, there were a number of licences that could not be renewed when the new scheme commenced, as the Housing Act 2004 does not allow a licence to be renewed if the previous licence has expired. These licences, known as “gap licences” had to be new licence applications, however the Council agreed that the application fee would be charged at the lower renewal fee if the application was made prior to the start of the scheme. All applicants were made aware of this, and of the 635 applications predicted, 93% were received before the 10th June 2021.

Number of applications received

Table showing the number of different HMO applications received

Licence Type	New	Renewal	Temporary Exemption	Variations	Total
Q1	652	154	4	8	818
Q2	96	401	10	46	583
Q3	93	436	3	52	584
Q4	81	456	3	37	577
Total	902	1447	20	143	2532

The processing of all new HMO licences includes an inspection, however “gap licence” were not inspected prior to the licence being issued. Due to COVID 19, a number of these were undertaken using an audit and photograph regime where physical inspection of the property was not available 

Number of inspections carried out for new applications

• Q1 - 39
• Q2 - 99
• Q3 - 86
• Q4  - 70

Number of licences issued

Table showing the number of licences issued

Category	A (New)	B (New)	C (1yr) (Renewal)	D (higher fee 1yr) (Renewal)	E (2yr licence) (Renewal)	F (5yr licence) (Renewal)	Total
Q1	3	14	95	13	54	11	190
Q2	8	46	261	11	117	109	552
Q3	6	56	295	25	148	202	732
Q4	7	80	334	32	167	96	716
Total	24	196	985	81	486	418	2190

Performance

Table showing the performance of time taken to process applications

	% New Applications issued within 18 weeks (target 85%)	% Renewal Applications issued within 8 weeks (target 85%)
Q1	92.86	95.86
Q2	52.10	91.99
Q3	25.60	86.74
Q4	27.48	72.20

The downturn in performance in relation to new applications has been due to the increased number of such applications being processed. All the licences that expired in the gap between the expire scheme and the renewed scheme had to be new licences which take more time to process than renewals, this should improve as the scheme progresses.

Compliance with the Scheme

The compliance with the scheme is monitored following compliance visits. Currently of the 559 compliance checks undertaken, 73% of properties were compliant with their HMO licensing conditions

Periodic Inspections

As part of the licensing scheme the Council must seek to remove or reduce category 1 or category 2 hazards from HMOs using Housing Act Part 1 powers and undertaking HHSRS assessments where required. Compliance with the scheme is also measured when undertaking such inspections or audits. This is improving as the scheme progresses.

HMO related Service requests

The HMO enforcement team have received 871 service requests since April 2021 this figure does not include service requests in relation to tenancy relations, noise and anti- social behaviour. 25% of the service requests related to disrepair and non-compliance with 30% relating to licence enquiries and 142 suspected HMOs operating without a licence.  Overall 95% of the service requests were responded to within 5 working days. This figure is 34% reduction on the service requests received in 20/21, however there was an increase in the year 20/21 of enquiries concerning COVID and also in relation to reports of suspected unlicensed HMOs.

Breakdown of service requests received per year

• Q1 - 337
• Q2 - 698
• Q3 - 310
• Q4 - 317
• Total - 1662

Suspect HMO investigations

There have been 158 referrals concerning HMOs operating without a licence, with over 30% being referred by members of the public and neighbours, approximately 10% from internal referrals in the Council and 7% from Councillors.  Referrals are always investigated, however due to COVID 19 unannounced visits have been reduced as they are considered high risk in terms of the possible transmission of the virus.

The outcome of concluded investigations (88% at year-end), was that in 20.3 % of the cases investigated,  HMO applications were made, however 46.8% of the cases were found not to be an HMO at the time of the investigation; with 13.9% requiring a future check as the evidence of multiple occupation was not conclusive

Income and expenditure

Table 1

Table showing income and expenditure for the HMO licensing scheme

Year	2021/22	2022/23	2023/24	2024/25	2025/26	Total
Number of applications	2,646	1,949	1,892	1,709	1,795	9,990
Applications - Processing etc.	£535,575	£395,269	£385,210	£365,321	£392,320	£2,073,694
General Costs (Representations/variations/withdrawn applications etc.	£61,350	£46,534	£46,543	£43,290	£46,834	£244,551
General Enquiries and Service Requests	£124,013	£94,063	£94,082	£87,507	£94,671	£494,336
Enforcement - non-compliance	£94,907	£97,754	£100,687	£103,707	£106,818	£503,873
Landlord Liaison/Promotion	£9,802	£7,435	£7,436	£6,917	£7,483	£39,073
Travel/ICT	£10,144	£7,694	£7,695	£7,158	£7,744	£40,435
Total cost	£835,791	£648,749	£641,653	£613,900	£655,870	£3,395,962
Income	£874,680	£657,140	£641,091	£603,983	£643,200	£3,420,094

Table 1 shows the predictions for a cost neutral scheme. As the scheme operates over 5 years this must be reviewed regularly, however changes should not be made unless the reviews show a sustained change in the income and expenditure.

2569 applications were received in year 1 which equates to 97.1 % of the number predicted.

Enforcement of the HMO Licensing Scheme

HMO licensing has applied to all HMOs across the city since 2012 and since that time it has provided a level playing field for all landlords and licence holders, this has meant that they are more accountable for the management and improvements of the HMOs in the city. The council, when it first introduced HMO licensing did not want it to be a paper exercise and were clear to be effective the scheme have to be enforced appropriately.

The enforcement of the scheme is undertaken with a phased approach:

• Stage 1 – conditions applied to licences
• Stage 2 – non-compliance with the conditions will lead to further action either by service of a financial penalty and/or an increase in the renewal fee. The increased fee is due to the increase in time taken in processing such licences.
• Stage 3 – where there is repeated non- compliance or where the non-compliance is of a serious nature a prosecution will be considered along with revocation of the licence.

In all cases where a financial penalty is served, the fit and proper status of those issued with the penalty will be assessed which could result in the licence being revoked.

7 financial penalties have been served, 4 for breaches of conditions, 1 for overcrowding within a HMO, 1 for breaches of the HMO Management Regulations and one for an unlicensed HMO and 11 notices were served under part 1 of the Housing Act to remove hazards.

81 licences were issued with an increased application fee demonstrating that the licence conditions had not been complied with.

Conclusion

The HMO licensing scheme has started well with an improvement in the compliance rates with licence conditions. However there are still some properties where conditions are below the minimum standard across the city. The Council have recently had a citywide selective licensing scheme approved which will mean that any privately rented home in the city will require a property licence to operate from 1 September 2022. Other Local Authorities who have introduced selective licensing have seen an impact on HMO licensing, in that unlicensed HMOs are discovered leading to more enforcement action and licence applications, it is clear that this may be the case in the city as we move forward with citywide property licensing.