Insurance News Archive

Postcode lottery of HMO licence fees

Property investors enter a 'postcode lottery' when they pay licence fees to hold a household in multiple occupation (HMO), according to new research from Heritable Bank.

HMO licence fees for properties let to two or more households with three or more storeys and five or more people range hugely across the UK, from £60 a year in Newcastle to over £1,000 in Herefordshire.

The licence fees, introduced in April, aim to ensure that landlords let properties of consistent, acceptable standard to multiple occupiers, often students.

The arbitrary way in which these licence fees are set is highlighted by the case of Richmond and Wandsworth, neighbouring London boroughs charging respective fees of £105 and £1,100.

Heritable's chief executive, Mark Sismey-Durrant, deplored this "textbook example of a postcode lottery."

News last week from the National Association of Estate Agents that the number of HMO landlords had dropped by 33 per cent within three months excited anxieties that the complex system was proving a deterrent, and that the availability of student and shared accommodation could fall as a result of confusion.

In the Heritable study, 50 per cent of landlords said they did not fully understand the licensing system.

24 Oct 2006