Buy to let landlords are concerned licensing costs and improvements demanded for upgrading their properties under new shared home rules will drive them out of business.
A wave of local councils will start enforcing planning and licensing rules on houses in multiple occupation (HMOs) in the new year - the first is Oxford City Council.
Around 30 councils mainly in cities with large student populations are adopting the rules - including Manchester, Newcastle upon Tyne and Southampton.
The new rules require landlords with buy to let properties rented by three to five unrelated tenants to seek planning permission before letting. Existing properties are exempt from the rule but may have to apply for licensing.
As an added requirement, councils will carry out health and safety checks on the homes and demand they register as HMOs. Licensing comes with a fee and a possible upgrade in fire safety.
Oxford is charging £362 for HMO registration with an annual £150 renewal, although councils can fix their own fees as there is no standard charge.
One Oxford landlord fears that she may have to stop letting if the council want her to carry out property improvements.
“I only make about £4,000 a year out of the property,” Kathy Whysall told the local media. “If I get to the point where I would have to spend £4,000, I would probably sell it, and that would mean there would be one less private rental out there.
“I am already paying out for council tax and mortgage. It’s just a moneymaking exercise by the council and I think they will push people out of the rental market.”
The council claims property investors can afford the fees and the new regime is aimed at raising standards.
“HMOs are generally more lucrative than family rental, it wouldn’t seem to make much financial sense for landlords to not get a licence. The majority of HMOs will be licensed without needing money to be spent on bringing them up to standard,” said a council spokesman.
