Agency warns council that new HMO licensing will backfire

A lettings agency says a new HMO licensing regime in one of London’s highest profile boroughs will reduce the number of rental properties.

This is the reverse of what the council has intended.

New licensing rules came into force in Westminster at the end of August. In short, they state that shared houses or flats where three or more people from two or more households share facilities now require licensing as HMOs. 

This replaces the old rule that stated an HMO license wasn’t mandatory until five or more people were sharing facilities. Westminster council claims the change will help improve living standards and create a safer, fairer tenant experience.

Westminster’s is the largest private rental market in London. In the capital, private rental stock accounts for 27 per cent of all dwellings but in Westminster it's 42 per cent. It also has the sixth largest number of existing HMOs of all London boroughs - 9,539.

However, with these changes now in force, the Bective agency claims it's likely that the number of HMOs within the borough will spike, despite rising demand. 

The agency’s head of lettings and property management, Tom Dainty, comments: “The impact of these new rules will be two fold. Yes, it’s undeniable that additional HMO licensing and tighter scrutiny when dealing with rule-breakers will benefit tenants by raising the standard of living.

“But, at the same time, this increased scrutiny, along with the additional costs, might tempt landlords to up sticks from Westminster and find more profitable investments elsewhere.

“This exodus will be of detriment to tenants. Less landlords means less stock, and less stock means higher rent prices. With Westminster’s average rent already more than £2,600 a month, this could further price more tenants out of the borough.” 

Bective operates sales, lettings and property management from six London locations - Notting Hill, Kensington, Ladbroke Grove, Chelsea, Brook Green and Berkeley Square.