There is a non-compliance rate of 75% in unlicensed HMOs in London.
Research conducted by the private consultancy London Property Licensing for trade body safeagent – formerly NALS – has found over 130,000 unlicensed properties which should be licensed under mandatory, selective or licensing schemes.
The research, carried out through Freedom of Information requests, found there are over 310,000 private rented properties in London that require licensing.
However, non-compliance in the capital is rife.
Licence applications have been submitted for only 25% of the 138,500 private rented properties that require licensing.
Without a licence application submitted, these properties are being operated illegally and landlords and/or agents can face prosecution or a civil penalty of up to £30,000.
The landlord can also be ordered to repay up to 12 months rent.
Since October 2018, the mandatory HMO licensing scheme has applied to most HMOs shared by five or more people whereas it was previously restricted to properties three or more storeys in height.
In some boroughs, additional licensing schemes have extended licensing to properties rented to just three or four unrelated people.
The picture for selective licensing is markedly different, according to the research.
These schemes extend licensing to all private rented properties including single family lets within a certain geographical area.
Licence applications have been submitted for 85% of the 173,000 private rented properties that require licensing under selective licensing schemes in London– a non-compliance rate of 15%.
Added to the confusion over licensable properties, many London boroughs are struggling to process over 24,000 licence applications.
Currently, about 40% of boroughs still rely on paper applications.
Safeagent is calling for a simpler, more streamlined licensing process.
Safeagent CEO Isobel Thomson said: “The results of the survey are concerning.
“Consumers are not being well served and indeed many are being placed at risk through this mish-mash of licensing schemes.
“Right now, the system isn’t fit for purpose and councils are drowning in paperwork.
“Landlords needing property licences are either deliberately evading the schemes or are in the dark concerning their legal responsibilities, and tenants are being placed at risk.
“If the compliance rate for HMO licensing schemes is only 25%, how can these schemes be effective?
“Isn’t it time we went back to the drawing board to come up with a simple, streamlined system that works for all?”