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HMO local authority concerns

Ramesh Sharma

April 1, 2006

The rules, which govern the classification of privately rented homes, are due to go live on 7 April but many are worried about how local authorities are going to apply them, with fears that different local authorities could interpret the rules differently and many areas are still cloudy in detail.

Mark Sismey-Durrant, chief executive of Heritable Bank, said: “My concerns over HMOs is not so much the cost but the extent of implementation. Local authorities haven’t decided how to apply the legislation. While the market will adapt to whatever is brought in, it will be very difficult.”

Andrew Moss, product development manager at Mortgage Express, agreed that the rules could have been implemented better. He explained: “I won’t say we have got concerns but the legislation could have been clearer as it wasn’t finalised until late February. It’s true that a landlord could find that he needs a licence for a property under one local authority and not another but the legislation is trying to improve the quality of the private rented market and that’s something we do support.”

The BTL market is currently buoyant and figures from the Council of Mortgage Lenders (CML) and the Royal Institute of Chartered Surveyors (RICS) have indicated a healthy BTL market over the next few months.

However, Bob Sturges, director of communications at Money Partners, believed the impact would be limited. He said: “We believe the proposed changes are unlikely to have a negative impact as the majority of investors won’t be affected. The fact that local authorities have the responsibility is naturally a concern but they deal with other areas of regulations, such as pub licensing, and they do a good job.”


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