Extension of property licensing – frequently asked questions

In Reading we currently operate a mandatory licensing scheme that applies to HMOs with five or more occupiers.  This scheme is required under Part 2 of the Housing Act 2004 and similar schemes are operated by local authorities across England.  The council is proposing two things. 

 The first is an additional licensing scheme that will operate across the whole borough.  If introduced, this would require the landlords of all HMOs that are not already subject to mandatory licensing to apply for a licence.

The second is a series of selective licensing schemes, initially covering Battle ward but possibly extending in time to Redlands and Park wards.  Private landlords with properties in areas where a selective licensing scheme is in force would need to apply for a licence from the council to continue letting out their properties.  This would not apply to HMOs, as these would be subject to either mandatory HMO licensing or the proposed additional licensing scheme.

Discretionary licensing in the private rented sector

We are proposing to introduce discretionary private rented property licensing schemes in Reading, alongside the existing mandatory scheme for larger houses in multiple occupation (HMOs).

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Why is the council proposing to introduce these schemes?

Evidence shows that, in some parts of the borough, there are clusters of rental properties that present significant risks to the health and safety of their occupiers.  In addition, evidence suggests the same issues affect many HMOs in the borough.  The proposed licensing schemes are a method allowed by law to take a more proactive approach to improving the condition and management of properties where the evidence shows this is necessary.

What are the purposes of the proposed licences?

The licences would introduce conditions that licence holders must comply with. The proposed licence conditions are intended to prevent overcrowding of HMOs, improve property conditions and promote good management of rental properties.  Further details on the proposed licence conditions can be found in the consultation documents.

One of the main aims of licensing is to make sure that for each rented property there is an identified person or company (the licence holder) who would be legally accountable for it.  One consequence of this, for example, would be a requirement that overseas landlords appoint a UK-based manager.

 Licensed properties must also be managed properly and both licence holders and managers must be ‘fit and proper’ persons. If the proposed licence holder does not meet the ‘fit and proper person’ criteria, a more suitable person must apply.  If a proposed manager does not meet the ‘fit and proper person’ criteria alternative management arrangements must be made.

Is this just being done to raise revenue for the council?

No. The council does not expect to profit from introducing additional and selective licensing schemes.  Successful operation of the schemes would depend on recruiting additional staff.  This is one of the reasons why the council proposes to introduce selective licensing in phases. The fee charged would cover the costs associated with administering the schemes – which are required to be self-financing. The council is not permitted to make a financial gain from the proposed schemes. The proposed fees have been calculated to cover the cost of assessing applications and accompanying documents, issuing of licences, property inspections, licensing enforcement and monitoring of properties. 

How much would each proposed licence cost?

Indicative fees

 Additional HMO licensing fee

DescriptionLicence fee
Standard fee£950.00
A reduced rate is proposed for those applicants who are members of a landlord accreditation scheme, such as accredited members of the National Residential Landlords Association (NRLA). The property must be accredited at the time the application is made.£800.00
An increased fee is proposed for late applications, where the property has been licensable for 12 weeks prior to the application being made.  This is to offset the costs of chasing applications from non-compliant landlords.£1,200

Selective licensing fee

DescriptionLicence fee
Standard fee£750.00
A reduced rate is proposed for those applicants who are members of a landlord accreditation scheme, such as accredited members of the National Residential Landlords Association (NRLA). The property must be accredited at the time the application is made.£650.00
An increased fee is proposed for late applications, where the property has been licensable for 12 weeks prior to the application being made.  This is to offset the costs of chasing applications from non-compliant landlords.£1,000

For comparison, the existing mandatory HMO licensing scheme fees are:

  • Accredited landlord – £800 for up to five bedrooms
  • Non-accredited landlord – £950 for up to five bedrooms
  • An additional £27 is charged for every additional bedroom over five.

What is an HMO?

A house in multiple occupation (HMO) is a property occupied by at least three people who are not from the same household and who share at least one bathroom, kitchen, or toilet.  The full definitions can be found in sections 254 to 264 of the Housing Act 2004. 

What is a household?

This is a legal definition set out in section 258 of the Housing Act 2004 and secondary legislation.  To be members of the same household, one of the following would need to apply to the occupiers of a property:

(i)     They are persons who are married, in a civil partnership or living together as if they are a married couple of civil partners.

(ii)   One person is a relative of the other, meaning parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew, niece, or cousin.  For the purposes of this definition, a half-blood relationship shall be treated the same as whole blood relationships.  The stepchild or a person shall be treated as their child, as shall foster children.

(iii) One person is a relative of one member of a couple outlined in (i) above and the other is a relative of the other member of the couple.  Relative has the same meaning as (ii) above.

(iv) Certain domestic staff defined within the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006.  The staff must be living rent free.

Examples of what is not considered a single household include:

  • Three unrelated friends sharing a home together – they are counted as three households, regardless of whether they are all listed on the same tenancy agreement.
  • A couple sharing with a third unrelated person – this is two households.

How long would a licence be valid for?

Licences can be granted for up to five years. The council may grant licences for shorter periods in certain circumstances. If your licence period is less than five years, you would be informed in writing why the council has limited the period of the licence.

Would there be conditions attached to the proposed licences?

All licences would contain mandatory conditions that are required by the Housing Act 2004. There would also be standard conditions the council proposes to apply in all licences to promote good management. Finally, there may be property-specific conditions in some licences that are based on the facts of an individual application.

Do I need planning permission?

The granting of a licence does not confirm that any necessary planning permissions have been granted. Parts of Reading are subject to an ‘Article 4 Direction’ that has removed permitted development rights to convert family homes into small HMOs (see: Article 4 Directions – Reading Borough Council).

You should be aware that the council’s Planning Enforcement team would be consulted as part of the licence application process. If you are in any doubt about the need for planning permission, you should contact the planning department for advice.

You may still be granted an HMO licence even though the appropriate planning permission has not yet been granted. You may be issued with a shorter licence if you do not have the appropriate permission, to allow for a reasonable period to obtain permission. This will be decided on the facts of individual application in line with our licensing policy.

What kind of standards would apply if my property were to be licensed?

Properties would be required to meet certain standards relative to the number of people living in the accommodation.  These standards would relate to factors such as: the number of bedrooms; the provision of food preparation and storage amenities; and the number of toilets, basins, bathrooms, and showers.  Separate documents will be published that set out our amenity guidelines.

Would I need more than one licence?

Landlords who rent out more than one property that is subject to licensing would need a separate licence for each property.

Additional licensing

What is an additional licensing scheme?

The Housing Act 2004 allows the local authority to extend mandatory HMO licensing to include other types of HMO if certain conditions are met.  This is called additional licensing. 

This is one of the discretionary schemes that the council is currently consulting on. The scheme aims to deal with problems associated with HMOs that are not already covered by mandatory licensing.

The scheme would include smaller shared houses and flats with three or four occupiers.  Anyone who owns or manages an HMO in Reading would need to apply to the council for a licence.

We are also considering whether to apply the scheme to section 257 HMOs.  This is a building (or part of a building) that meets the following criteria:

  • It has been converted into self-contained flats 
  • It does not comply with the appropriate building standards (1991 or later building regulations)
  • less than two-thirds of the self-contained flats are owner occupied

We are intending to apply additional licensing to all HMOs that are flats in purpose-built blocks.  Some of these are currently exempt from mandatory HMO licensing.

When would the additional licensing scheme come into force?

We are currently undertaking a public consultation on the implementation of  borough-wide additional HMO licensing. Following the consultation, the council will decide whether to proceed.  If the council decides to go ahead with this scheme, our current plan is to implement it in the spring of 2025.

What is the designated area for the additional licensing scheme?

The proposed additional licensing designated area covers the whole area of the borough of Reading.

What buildings are exempt from additional licensing?

The following types of property are not regarded as HMOs, so would not be licensable: 

  1. Buildings controlled or managed by public sector bodies e.g. registered social landlords, police authorities, health services.
  2. Buildings regulated by other legislation e.g. care homes, detention centres etc.
  3. Buildings controlled or managed by an educational establishment and occupied by the establishment’s students.
  4. Buildings occupied by religious communities whose principal occupation is prayer, contemplation, education, or the relief of suffering.
  5. Buildings occupied by the owner and members of his household, provided there are no more than two lodgers.
  6. Buildings occupied only by two persons. 

Further details are set out in Schedule 14 of the Housing Act 2004.

What decision making process would the council follow before issuing an additional licence?

The council would be required to issue a licence if it is satisfied that:

  • the HMO is reasonably suitable for occupation by the number of occupants/households allowed under the licence, and
  • the proposed licence holder is a ‘fit and proper person’, and
  • the proposed licence holder is the most appropriate person to hold the licence, and
  • any proposed manager is a ‘fit and proper person’, and
  • the proposed management arrangements are satisfactory, and
  • the person involved in the management of the HMO is competent.

If the council is not satisfied with the above then they may decide to refuse the licence or impose further conditions on the licence holder to, for example, make the property suitable by improving the amenities, or to require training.

A copy of the proposed licence, or reasons for proposing to refuse the licence, would be issued before a final decision is made. This would allow applicants a further period in which to make representations on the council’s proposed course of action.

Following the representation period, a final decision would be made and the licence either granted or refused. There is then an opportunity for applicants to appeal to an independent tribunal if they are not satisfied with the council’s decision.

I already have a licensed HMO.  Would I need to apply for a licence for my other properties?

Yes, if you own other HMOs occupied by 3 or 4 people, or if you own rental property that is not an HMO but is located within a designated selective licensing area.

If a property already has a mandatory HMO licence, it will not require another licence under the proposed discretionary licensing schemes. 

A separate licence would be required for each property that is subject to a discretionary licensing scheme.

Selective licensing

What is selective licensing?

The term comes from the Housing Act 2004. This Act allows a local authority to select parts of (or potentially all) of their area in which privately rented housing would be subject to licensing controls. The schemes are ‘selective’ as they are intended, among other things, to tackle issues of poor housing quality in areas where evidence shows this is a problem.

Reading Borough Council has decided to consult on implementing up to three selective licensing schemes for a period of five years.

What properties will require a selective licence?

We are considering Battle, Park, and Redlands wards for the purposes of the selective schemes.

You can find out which ward your property is located in.

Use search for the address and click on ‘My House’, to see your ward listed, or in ‘My Maps’ click on boundaries to see the ward boundary on a map. 

I have a mandatory HMO licence for my property.  Will I need to apply for a selective licence for the same property?

No.  You would need a selective licence for any other rented property that you own if it falls within the selective licensing scheme areas and is not already subject to mandatory HMO licensing, or that would be required to have an additional licence if the proposed additional licensing scheme is adopted.

Would I need to provide documents with my selective licence application?

Yes, you would need to provide the following documents with your application:

  • Evidence of permanent residential address (unless applicant is a company with a registered office address).
  • A basic floor plan showing the room sizes in metric units. You’ll need to label the use of each room including bathrooms and en-suites; and show the location of any smoke/heat detectors, fire blankets and carbon monoxide alarms, if these are installed. This plan does not need to be drawn by a professional.
  • Safety certificates – must be current at the time of application:
    • Gas safety certificate (where there is a gas supply in the property)
    • A satisfactory Electrical Installation Condition Report (EICR)
    • Fire Alarm Test Certificate (only if fire alarms are already installed at time of application)
    • Emergency lighting (only if emergency lighting is already installed at time of application)

Are there any tenancies that would be exempt from selective licensing?

Some tenancies/licences would be exempt from selective licensing, including:

  • For property managed/controlled by Local Housing Authority, Registered Social Landlord, a Housing Association
  • Where a member of the owner’s family rents the property from the owner
  • Where occupiers share accommodation with the landlord
  • Licensable HMOs (Houses in Multiple Occupation) under Part 2 of the Housing Act 2004

General

Would the list of licensed premises and the details of the licence holders be made public?

Yes, the law requires the addresses of all licensed properties and details of the licence holders to be published on a public register.  For example, you can see the current public register for mandatory licensable properties. 

Would there be a ‘fit and proper’ test for landlords under additional and selective licensing?

Yes.  All landlords applying for a licence would have to be a ‘fit and proper’ person. This means the council must consider any history of housing offences; fraud, violence, or drugs offences; sexual offences; unlawful discrimination on the grounds of sex, colour, race, ethnicity or disability in connection with the carrying out of any business.

What fire precautions would be needed under these licensing schemes?

Under additional and selective licensing, we are not initially expecting to find fire safety precautions that extend beyond the requirements of the Smoke and Carbon Monoxide Alarm (England) Regulations 2015.  If additional fire safety precautions are required, this would be identified by a council officer during an inspection, and you would be provided with a schedule of improvement works to complete. 

For information, the main fire safety guidance document council officers refer to is the LACORS’ “Housing – Fire Safety” guide.  Further information and a link to the LACORS’ guide.

What would be the penalties for not applying for a selective or additional licence?

Failure to apply for one of the above licences where one is required would be an offence under section 72 (additional licensing) or section 95 (selective licensing) of the Housing Act 2004, which, on summary conviction may make a person liable to an unlimited fine.  A financial penalty of up to £30,000 may be issued by the Council as an alternative to prosecution.

In addition, a conviction or financial penalty for failing to apply could be considered a relevant fact when deciding whether an applicant is a ‘fit and proper’ person and may result in future applications being refused.

An application may also be made to the First-Tier Tribunal (Property Chamber – Residential Property) for a rent repayment order. The tenant or Council could make this application.  If a repayment order is made, the landlord could be ordered to repay up to 12 months’ rent or, to repay housing benefit paid to an occupier while the property was unlicensed.

If I have applied and you have not issued the licence, would I still be able to let or advertise the property or serve a s21?

Once a valid application is made you can then let the property and advertise for letting. You can also serve a section 21 notice.

I have a single person living in my property, would I need a licence?

Yes.  If the property is occupied by a single person, or a single family on a non–exempt tenancy it would need a selective licence, if the property is within a designated selective licensing area (Battle, Park, Redlands).

Outside the selective licensing areas no licence would be required.

I have two people sharing my property, would I need a licence?

Yes.  If the property is occupied by two people on non–exempt tenancies it would need a selective licence, if the property is within the designated selective licensing area (Battle, Park, Redlands).

Outside the selective licensing areas, no licence would be required.

I am a resident landlord and share my home with one lodger, would I need a licence?

No, if you share a toilet, personal washing facilities, a kitchen, or a living room with your lodger in your home, where you are the owner, you do not need a licence.

I am a resident landlord and share my home with two lodgers, do I need a licence?

No, if you share a toilet, personal washing facilities, a kitchen, or a living room with two lodgers in your home, where you are the owner, you do not need a licence.

How long would licences be issued for?

A licence would be issued for a maximum of up to five years from the date of issue or to the end of the selective or additional licensing schemes. A shorter licence may be given where there are serious concerns regarding the proposed licence holder, management arrangements or property conditions. This may include issues relating to information provided (or missing from) the application and/or issues of non compliance with relevant legislation, such as planning, environmental health and landlord and tenant law.

Would I need to tell third parties such as my mortgage provider about my licence application?

People with a legal interest in the property have a statutory right to know how the licence may affect them.  This would include mortgage providers, other owners, or managers.

If I am selling the property soon, what would I need to do?

Licences are non-transferable. When you sell a licensed property, you must inform Reading Borough Council. The new owner will need to apply for a new licence. 

Can a property receive a licence if the lease does not allow for private renting or use as an HMO?

Yes. Whether the lease agreement allows for rental or HMO use is a civil matter between the leaseholder and freeholder. The council may still grant a licence if there are tenants already in occupation; but may shorten the length of the licence to enable the licence holder to either obtain a waiver of the lease condition from the freeholder, or to cease using the property in a way which breaches a lease condition.

What if my property does not meet the standards or requires work?

Depending on what the problem is, a licence could still be issued with limitations designed to address the issues found.  Examples include capping the number of people who can occupy the property and restricting the use of certain rooms or amenities.  In addition, a condition could be imposed requiring improvement work to be carried out, for example providing another cooker where cooking amenities fall short.

What if I do not agree with the council’s proposals to create additional and selective licensing schemes?

Please complete the consultation questionnaire.  If you disagree with the proposals, we ask that you explain why you disagree.  Your reasons can then be considered when the council decides whether to proceed.  If the council does decide to go forward with one or more of these schemes, your responses may also be important in modifying the scheme proposals.

How do I contact the Private Sector Housing team?

For more detailed responses and queries on the consultation you can contact us by email: prsconsultation@reading.gov.uk.

By post:  Private sector Housing Team, Reading Borough Council, Civic Offices, Bridge Street, Reading, RG1 2LU.

Last updated on 29/08/2024