A series of Freedom of Information requests has found that only a minority of local authorities have established the number of properties that need to be licensed under new HMO rules.
Even fewer councils – only a tiny handful – know whether the properties would meet licensing conditions, for example, as to fire safety and new minimum room size requirements.
As a result, thousands of HMOs could be illegal, exposing landlords and agents to fines and other penalties, and inability to serve Section 21 notices.
Tenants meanwhile could face losing their homes.
From October 1, the old HMO rules changed, and now apply to properties of any height where there are five or more sharers in two or more households.
Previously, only properties of three storeys or more were covered.
A 2008 Government report estimated there were 56,000 HMOs licensed under the old regime.
These will automatically be passported over to the new arrangements, but the Government estimates a total of 160,000 properties could be covered by the new regulations and has given local authorities up to three years to identify them.
Research carried out by Doncaster-based property investment firm Touchstone suggests that many councils will need all of this time, while meanwhile a large number of HMOs are illegal.
The research has apparently revealed massive gaps in local authorities’ knowledge of where these properties are and who owns them.
Most, it is claimed, are relying on landlords to submit licence applications.
Of the 238 authorities that responded to a Freedom of Information request, sent at the start of September, asking how prepared they were for the changes, 93 said they had carried out research to establish how many properties in their area require an HMO licence.
However, only 14 had conducted research to establish how many of those properties were in a condition where they could expect to be granted an HMO licence.
Touchstone CEO Paul Smith said that the Government had passed legislation without any clear idea as to the sale of the issue.
He said: “We’re aware of one local authority with 1,800 properties classed as HMOs and privately it told us that only around 40% will meet the [HMO standards required in] the new regulations.
“If that’s happening across the country, we could be looking at a major problem.
“Ministers have estimated 160,000 properties could be affected but I would be interested to know how they arrived at that figure as most local authorities have not conducted any research.”
Responses to the Freedom of Information requests showed that while Manchester City Council estimated it now has 5,000 HMO properties, it hasn’t researched how many will meet licensing standards.
North Somerset Council said it had 2,940 properties affected, Peterborough and Bournemouth put their numbers at up to 2,500 while Cambridge, York and Hull city councils estimated they had more than 1,000 HMOs.
None was able to say how many were currently operating illegally.
Leeds, Bristol, and Norwich were among the majority of authorities which said they had not carried out any research to establish how many properties in their area might be affected or how many might pass or fail.
Richard Lambert, CEO of the National Landlords Association, had already said that landlords enquiring about licences were being given wrong answers by local councils which appeared to know nothing of the changes.
He now says: “This is an unacceptable failing on the part of the Ministry of Housing, Communities and Local Government.
“We‘re also concerned that local authorities appear unprepared for the changes and have, anecdotally, heard that landlords may be being given advice which could put them at risk of breaking the law.
“Our advice to all landlords is to check if your property falls under the new regulations, and if your local authority does not yet have a process in place, make sure you apply using the existing mandatory HMO licensing scheme and receive an acknowledgement of your application.”