Westminster HMOs to spike after rule change – could it drive landlords out?

New licencing rules will see a spike in properties classed as HMOs within Westminster – however there are fears increased red tape could drive landlords out of the sector.

At the end of August shared houses or flats where 3 or more people from 2 or more households share facilities required a HMO licence.

Previously an HMO license wasn’t mandatory until 5 or more people were sharing facilities.

Tom Dainty, head of lettings and property management, Bective, said: “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.”

Westminster Council partially rolled back on some changes in October, deciding that S.257 HMOs will not need to get a licence. S.257 HMOs are buildings converted into self-contained flats, which are less than two thirds owner-occupied that do not comply with modern building standards.

In Westminster private rental stock accounts for 42% of dwellings, more than any other borough, followed by the City of London (41%) and Kensington & Chelsea (37%).

Furthermore, Westminster also has the 6th largest number of existing HMOs (9,539) of all London boroughs, trumped only by Ealing (20,429), Brent (16,984), Lambeth (12,000), Tower Hamlets (10,000), and Enfield (10,000).

Because of Westminster’s large rental market and growing HMO market, the new licensing rules will have a more profound and long-lasting effect on the borough than it will on most others.

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