Buy-to-let is now a major financial market contributing £30bn to the economy each year and attracting the attention of government legislators due to its size.
The houses in multiple occupancy sector is high on the list of regulatory reinforcement due to the greater health and safety risks involved in this type of rental property.
A property which has more than three storeys and is occupied by at least five tenants from two or more families now requires an HMO licence. Social changes in recent years mean HMOs are more common, with young people representing the largest group of occupants of shared rented accommodation.
Home ownership is being postponed for reasons such as greater flexibility and mobility or due to the growing problem of unaffordable housing, so moving into shared accommodation is no longer restricted to students and is being adopted by many more people.
Seven months on since the introduction of HMO regulations, some confusion over definitions and laws persists. A big hurdle for regulation is overcoming the inconsistencies that seem inherent within it. Guidelines sent to local authorities from the government are not specific enough and leave room for ambiguity in the way the legislation is enforced.
The costs involved in acquiring an HMO licence also depend on the authority to which a landlord is applying and can vary significantly. Moreover, the process involved in acquiring one is off-putting for landlords and unintended consequences of legislation may include a decrease in the number of landlords wishing to invest in HMOs.
So one might ask whether the introduction of these laws will pose a threat to the future of large andy young is managing director of The Business Mortgage Companyinvestment portfolio holders. But amid the administration and increased paperwork in-volved in HMO regulation, we must not lose sight of the fact that these laws have been introduced to protect all the parties involved in the letting process.
The booming buy-to-let industry requires legal control so that all parties involved are protected by official guidelines. Regulation can therefore be seen as a positive step in the name of health and safety and the legality of agreements.
In light of this two-sided argument, what is the future for HMO legislation? The worry is that the government will make the legislation too complex to be adhered to. There is a need for more transparency and the government may find that simpler rules are more likely to be complied with.