Oxford blues

Journalist and Oxford graduate Frances Hedges takes a look at plans to extend HMO licensing to smaller properties in the city of dreaming spires

Frances Hedges

“If you are letting a property of three or more storeys to five or more tenants, you must have an HMO licence.”

Home to architectural landmarks such as the Bodleian Library and the Sheldonian Theatre, not to mention 38 colleges, Oxford is also a city of 20,000 students and a large population of migrant workers. It is fertile ground for landlords — but a proposed extension of Houses in Multiple Occupation (HMO) licensing has concerned some property investors.

According to the Housing Act 2004, an HMO is a house of three or more storeys occupied by five or more people. Mandatory licensing of HMOs came into force in April 2006, requiring landlords of such properties to apply and pay for a licence, granted by local authorities and accompanied by a property inspection. The idea is to stop rogue landlords from letting sub-standard accommodation.

Yet Oxford City Council claims that the 2004 regulations are inadequate. In a city that has twice the national average of privately rented property, the existing regulations simply don’t cover enough of the housing stock. In April 2008, the council became one of the first in England to apply for an additional licensing scheme covering smaller properties.

The rationale behind the application is clear. As Councillor Patrick Murray, Executive Member for Housing at the time the proposal was put through, explains: “Oxford has a very specific problem — the failure of the housing market to regulate itself.” High house prices and a large population create high demand, resulting in what Patrick describes as “a landlord’s market”. Students are obliged to take whatever they can get — sometimes paying above the odds for substandard accommodation. According to research, 61% of HMOs are below standard in terms of fire precaution and 29% are inadequately managed.

The extension of licensing to more properties, Patrick argues, is about stopping unscrupulous landlords from getting the better of students who barely know what their rights are, let alone try to enforce them. The 1,000 complaints about poor standards of accommodation received by the council in 2007 are, he says, “only the tip of the iceberg”.

Unsurprisingly, the response from landlords hasn’t been overwhelmingly positive. Elizabeth Brogan, Senior Policy Officer for the National Landlords Association, fears that the proposal is really a “money-grabbing scheme” that will result in responsible landlords “bearing the burden of the costs”. Meanwhile, she believes, “the irresponsible ones will continue to get away with overcrowding their houses, maximising their income and failing to comply with safety standards”.

A major bone of contention is the fact that only half the HMOs in Oxford that fall under the mandatory licensing scheme have been licensed so far. Why should additional regulations be introduced, landlords are asking, when the current ones haven’t been fully enforced?

Patrick is quick to defend the work of the council. He points out that the mandatory licensing scheme has resulted in improvements to 70% of licensed properties, demonstrating the tangible benefits of housing inspections. He adds that there have been cases of landlords being prosecuted for failing to apply for licences: in June 2008, for instance, one man was fined £11,500 for breaches of HMO regulations and for failing to respond to an Improvement Notice.

It’s all very well catching up with rogue landlords, but this doesn’t change the fact that even reputable landlords will feel the pinch of the new licence fee. Although £750 every five years might not seem a high price to pay for guaranteeing the quality of accommodation, Elizabeth fears that tenants will be the first to suffer. “With the credit crunch, landlords are facing increasing expenses — their only option may be to put their rents up, so students will end up paying more.”

Will Oxford’s application for additional licensing set a precedent for other cities? Elizabeth and Patrick agree that schemes should only be implemented with due consideration for the specific needs of the area and with adequate evidence that current regulations are insufficient. “It shouldn’t just be a rubber-stamping exercise,” says Elizabeth firmly — and it remains to be seen whether Oxford’s proposal will get the rubber stamp of approval later this year.

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