Another week and another Newsround, let’s see what we have found in the news this week.
HMO’s re-banding for council tax
Propertymark and letting agents are backing the governments decision to reform the council tax banding of HMO’s. They are calling for HMO’s to be banded as one property, rather than ‘per room’ and for the landlord to be liable for the council tax, not the tenant.
Some local authorities see HMO’s as source of extra income revenue and charge HMO’s per room rather than one property. Propertymark is calling for one council tax band per HMO.
Sophie Lang, Propertymark regional executive says
Adopting a council tax room by room is not fair, and will increase costs for landlord and tenants, leading to higher rents. HMO is usually for people who cannot afford to have a flat on their own and is considered a cheaper way to live, but this will change if council tax is increased to this level.
Propertymark also state that taxing per room could result in an artificial inflation of dwellings per borough without actually increasing any housing. Greg Tsuman, ARLA Propertymark President Elect says
It is important to ensure that this reclassification does not result in an artificial increase in the number of dwellings. The same six-bedroom building should not inflate the statistics by 600 per cent in terms of additional dwellings created.
We need to build more homes, not carve them up into smaller and smaller units. Secondly, the pressure on landlords from multiple directions is well documented and has already resulted in a loss of 500,000 homes from the private rented market since 2018 (English Housing Survey).
Councils slammed for treating landlords as ‘cash cows’
As rent repayment orders become more common, one tribunal has accused a council of using licences as a regular source of income rather than using them for what they should be used for, which is to deal with rogue landlords.
Nottingham Council has been accused of such activity by a First Tier Tribunal where a tenant applied for a rent repayment order but it was found to be not ‘unduly serious’ on its own, so reduced the award to 40%. The landlord proved to be a good landlord with a clean history and there was no selective licensing in place when she first started letting. She moved abroad, but still kept the property well-maintained and had not increased the rent.
The Tribunal said
The purpose of a rent repayment order is to deter landlords from unlawful action and to prevent repeat offences…she is not letting property at the moment and there is little chance that she will do so in the foreseeable future.
Airbnb’s could be AST’s
A judge has ruled that a long-term Airbnb letting was actually an assured shorthold let due to the length of the letting – which had gone beyond the standard Airbnb holiday let.
The couple renting the property fell into arrears four months into the let, at which point the landlord threatened them, and turned off their power, internet, and heating for 19 days. The tenants sued for harassment and breach of lease, arguing their right to quiet enjoyment had been breached. The landlord claimed that as it was let as an Airbnb holiday let the occupiers only had limited rights.
But the court ruled that as the letting had gone beyond the standard holiday let, it was an AST with all the usual tenants’ rights. He, therefore, ruled in favour of the tenants and ordered the landlord to pay £12,924 compensation plus £90,000.00 to cover the tenant’s legal costs.
Darrel Kwong of DEK Consultancy has issued a warning to Airbnb landlords
The moral of the story is, be careful who you put in an Airbnb, as you could end up with an AST, and it’s highly likely you would have done zero compliance if you needed to get possession under a Section 21.
Wise words which leads us onto an announcement by the government yesterday stating potential new rules for Airbnb’s.
Consultation to look at whether Airbnbs should require planning consent and registration
Changes are afoot with new rules announced by the government stating that houses let on an Airbnb basis or other short lets may in future need planning consent. The Department of Levelling up, Housing and Communities are suggesting that this may be required for all new short-term lets, with a further consideration on whether to give owners the flexibility to let their homes for a specified number of days in a calendar year without the need for planning consent.
Depending on the results of the consultation, the new rules may be introduced later this year under secondary legislation.
This will be a new planning class for short term lets which are not used for their sole or main home, new permitted developments rights will also be given so that councils can choose whether to use these planning controls as well. It will only apply to England and will not apply to hotels, hostels or B&B’s, and will only apply to new airbnb’s not existing for the time being at least.
The government says
It wants to ensure the country reaps the benefits of diverse and sustainable accommodation and support the visitor economy, while also protecting local communities and ensuring the availability of affordable housing to rent or buy.
Meanwhile, another government department has launched a separate consultation on a new registration for short lets. This scheme aims to ‘build a picture of how many short-term lets there are and where they are located, to help understand the impact of short-term lets on communities’.
Culture Secretary Lucy Frazer says
The government wants to help areas get the balance right, and today we have an incomplete picture of the size and spread of our short term lets market. This consultation on a national registration scheme will give us the data we need to assess the position and enable us to address the concerns communities face.
Airbnb welcome the government taking action on its plans for a register but is keen to ensure that the changes ‘strike the right balance’. Theo Lomas, head of public policy and government relations for northern europe says
Airbnb has long called for a national register for short-term lets and we welcome the government taking this forward. We know that registers are clear and simple for everyday hosts to follow while giving authorities the information they need to regulate effectively.
We want to work with the government to ensure that any planning interventions are carefully considered, evidence-based, and strike a balance between protecting housing and supporting everyday families who let their space to help afford their home and keep pace with rising living costs.
- The consultation on change of use classes can be found here.
- Consultation on a registration scheme for short-term lets in England can be found here
Generation Rent wants more
Dan Wilson Craw from Generation Rent is less happy about this announcement and says that it will not reverse all the holiday lets that are already in place. Whilst he does recognise that it is a step in the right direction, he says
Under the government’s plans, existing holiday lets – including homes that tenants were evicted from to make way for tourists – would get automatic planning permission. And few landlords would apply to revert their property to residential use: because it is more lucrative to rent to tourists than to tenants, properties with planning permission for holiday lets will suddenly become more valuable than regular houses.
The planning proposals might help ensure that future homes built in holiday hotspots are lived in by locals, but compared with the rapid loss of homes in recent years, it will take a long time to restore balance to the rental market, and people will continue to be priced out of the areas they grew up in.
He goes on to say that the licenses that are granted should have an expiration date, and where there is severe housing shortages in certain areas, caps should be put on renewing the short lets and Airbnb’s.
It will be interesting to see how this is implemented in the coming months.
Snippets
Be wary of property courses offering ‘quick routes to success’ says expert
NEW: 36% of tenants would accept a rent increase from a good landlord
Huge fine after landlord runs illegal HMO
Landlords have ‘nothing to fear from looming Decent Homes Standard’
Council clampdown on landlords with poor energy efficiency
Section 21 neither overused or abused by landlords – survey
Newsround will be back next week.
With regard to HMO and Council Tax, my experience is that HMOs created from a business premises (such as a pub) are being banded by the Valuation Office Agency as council tax bills for each room, those being created from residential dwellings are retaining their original Council Tax rating, so it is a bit unfair to blame the Local Authority Council Tax Office.