Government kills discount on licences for purpose-built student accommodation

Student accommodation owners will pay full price for licence applications

We’ve been following the new law on licences for Houses of Multiple Occupation (HMO) for licensing houses of multiple occupancy for a while (see the links at the end of this blog). Amid the last-minute shopping and checking the fairy lights at the end of last year, the government published its response to the consultation on the new bill.

The main takeaway for landlords with purpose-built student accommodation (PBSA) in their portfolios is that the government has nixed the idea of a 50% discount on the cost of their HMO licence applications.

Previously, the government had mooted the idea that PBSA providers who comply with a code, such as ANUK, should be entitled to a discount on the standard rate for a licence application. The respondents to the consultation tentatively agreed with this assessment – 60% being in favour.

However, events have overtaken the consultation. The tragedy of the Grenfell Tower fire and the subsequent investigation into safety at purpose-built accommodation of all kinds means that issues such as fire safety are now of paramount importance.

Eager to avoid even the slightest whiff of impropriety, the government has taken off the table anything that can be seen by the public as a barrier to proper investigation and enforcement of safety standards by local authorities.

This gels with the government’s response to other areas of the consultation. Where respondents had spoken about PBSA providers who were membership to a code of practice being exempt from HMO licensing, the government has given that an emphatic no.

The proposed legislation will increase the number of properties that would require an HMO licence, as well as mandating a minimum room size for bedrooms.

For more information on the consultancy, see: www.gov.uk/HMO_licensing_reforms_response.pdf

For our other blogs on this issue, see:
www.purplefrogproperty.com/blog/government-expand-licensing-rental-properties/
www.purplefrogproperty.com/blog/government-launches-new-consultation-houses-in-multiple-occupation/