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Beating HMO License Fees

11th August 2020

In 2013 a group of landlords challenged Milton Keynes council over selective licensing and the cost of HMO licensing fees, and won.

This article follows on from a conversation with Alex Caravello, Chairman of Milton Keynes Private Landlords Association, who headed up the challenge.

Milton Keynes - HMO Licence Fees

Most councils charge around the £880 mark for a license. Milton Keynes now does it for £344 because the Private Landlord Association challenged the council on overcharging fees.

Under EU law, councils aren't allowed to make a profit on licensing schemes.

Why Did They Drop The Fees?

In 2013, Alex used the freedom of information act to gather evidence from the council. He requested for a breakdown of how they had calculated their licence fee.

From the information it was clear that the council were making huge profits and charging more than double their costs.

The council had built in a large allowance for the enforcement into licence fees. Councils can charge the cost of running the licensing scheme, but they can't use licence fees to pay for enforcement.

Once it was clear that the fees the council were charging were illegal, the council dropped the cost of the licensing and applied credit to landlords that had been overcharged. No legal action was taken.

Milton Keynes - Selective Licensing

The biggest challenge the landlord group faced in Milton Keynes was over selective licensing. The council wanted to bring in selective licensing for all landlords similar to the HMO licence scheme.

There are clear criteria in the housing act that allow councils to introduce selective licensing. If an area doesn't meet these criteria, then the council can't introduce it.

Newham was the second borough in London to bring in selective licensing. The consultation process showed that it was needed.

In Milton Keynes there was no clear need for licensing, but the council were pushing for it. Selective licensing makes a statement that an area has high levels of anti social behaviour leading to consequences such as increased insurance premiums.

The council paid a third party company (Opinion Research Services) to conduct research. The research showed that the highest crime rates were in areas with the highest concentration of social housing. The council hadn't been tracking whether anti social behaviour was coming from private or social housing.

Tips on Defeating Selective Licensing

The local authority will use all your money and their money against you. You have to be proactive to make sure they don't just role out selective licensing.

1 - The council must first establish that selective licensing is needed. Make sure they use a third party company to conduct research to see if it is really needed.

2 - Don't just wait to be contacted. Be proactive and get as many landlords and tenants to work with you. The local authority only deals with complaints and issues, so make sure they hear from good landlords too.

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