Many UK renters are living in Houses in Multiple Occupation (HMO), which, under current regulations, are properties rented out to three or more people forming at least two separate households, where tenants share basic amenities such as a kitchen or a bathroom. Any HMO that houses more than five people forming two or more separate households requires the landlord to apply for a licence to the local council, at an average cost of £600.
Students and the increasing number of people sharing flats with friends will be familiar with the common problems associated with living in an HMO. Most commonly, HMO landlords can be slow to make repairs, and the overall quality of the housing is more likely to be substandard.
Under current regulations, HMO landlords have to provide adequate fire escapes, gas and electrical safety, and minimum bedroom sizes; however, when it comes to the actual quality of the housing, there are no standards that can be enforced. In the worst cases, large-scale HMO housing has been found to contain damp and mould, kitchens in a state of disrepair, and vermin. These problems especially affect HMOs that have been converted from guest houses, as a 2015 BBC exposé demonstrated.
Moreover, thousands of landlords across the country are still avoiding licensing, putting their tenants at risk. In a landmark court case earlier this year, five Leeds flatmates took their landlord to court for failing to comply with licensing regulations, winning back all of their rent.
It may be that a more transparent and uniform landlord licensing scheme in which the money is reinvested into property maintenance could improve tenants' living conditions – and increase landlord compliance.
'Effective enforcement of rental sector standards is one of the biggest problems facing the lettings industry,' says Neil Cobbold, chief operating officer of automated rental payment company PayProp.
'Landlords might be happier to pay for these licences if they know the money is going to be used to raise PRS standards and identify rogue operators. Licensing schemes are sometimes criticised for being "revenue raisers" for local councils,' adds Cobbold.
'However, if authorities are more open about where the money is going and more focused on reinvesting it into housing, licensing schemes could be more effective with higher rates of compliance.'