Landlords keen to wash their hands of new law

Student flat owners and their tenants could suffer under rules requiring a sink in every bedroom. Landlords who let their apartments and houses to students and sharers are about to experience a nasty sinking feeling - literally.

New rules in the 2004 Housing Act that become law on April 6 say that any property with five or more sharers must have a wash-basin or sink in every bedroom - even those that are large enough to be used as lounges and reception areas.

Not only that, from July this year anyone who owns an HMO (House in Multiple Occupation) must have a licence and all landlords - whether HMO-owners or not - will lose control of their tenants' deposits so the money can be "regulated and controlled" by two Government-led deposit schemes.

Even the wording set out in the Act sends a shiver down the spine. It certainly concerns Rob Thomas, senior policy officer of the Council of Mortgage Lenders. "These new rules are simply red tape run wild," he says. "It's hard enough to run a small business like an HMO anyway without having a lot of regulations to muddy the waters." Or in this case, the wash-basins.

Landlords like Gary Sharp, who has a portfolio of buy-to-lets and HMOs in Liverpool, may be forced out of business. "I won't be able to afford to make all these alterations to the rooms. It could cost as much as £20,000 a property to adapt the drainage, put in new pipe-work and install the hot-and-cold wash-basins to meet these regulations. And if you decide to sell your HMO to a family instead, they won't want to buy it if it has a sink in the lounge." The HMO landlord's lot is clearly not a happy one. "It will drive many landlords like myself out of the property sector altogether," says Sharp.

Another HMO owner is David Salusbury, chairman of the National Landlords Association. He has been lobbying for changes in the new law. Although rules are needed to protect tenants from rogue landlords, over-regulation will lead to time-wasting and muddle and stop new landlords coming into the sector, he says.

Mike Stimpson owns 250 student and social housing units in Brighton, East Sussex. "It'll be a question of 'no water, but hand-basins everywhere' with the long winter drought, scarce water supplies and a hosepipe ban in the south-east. What's wrong with the current set-up? Landlords have been supplying handbasins in bathrooms and toilets in HMOs for many years with no complaints from the tenants."

Sharp says the wash-basin rule will be felt in another way, too. HMO landlords will be forced to put up rents. "HMO owners already have to pay letting agents' fees, service charges for leased apartments and landlord's insurance without having yet another expense imposed on us.

"We'll have to push up our rents which means it'll be harder to find tenants who can afford to rent our properties," he says.

This will have a knock-on effect, says Stimpson, who is chairman of the National Federation of Residential Landlords. "Landlords will have to reduce the number of sharers to four in their properties to avoid these regulations - with rent rises to compensate for the loss of rent from the fifth sharer. As a result there will be fewer properties available to those who are most in need of cheap and affordable accommodation. Many landlords will be forced to spend even more money adapting their HMOs so they can sell them on the open market."

For more information see propertylicence.gov.uk or contact your local council as rules and fees may vary

How the 2004 Housing Act affects landlords
Three new licences - Mandatory, Selective and Discretionary - will be introduced when the 2004 Housing Act comes into force on April 6. Mandatory licences are for owners of Houses in Multiple Occupation (HMOs) of three storeys or more and at least five sharers. Landlords have until July to obtain a licence or face a penalty of up to £20,000.

Discretionary licences will be issued by local councils to smaller HMOs that in their opinion are not properly managed or are prone to anti-social behaviour. London's Wandsworth borough council has just introduced its own discretionary licence of £1,100. Other councils will follow suit.

Selective licences apply to private properties in areas of low demand that councils deem to be poorly managed or suffering from anti-social behaviour.

The wash-basin rule: Every HMO with five or more sharers must install a basin in every bedroom. HMOs with up to five sharers must have one bathroom/shower unit and toilet plus a shared kitchen. HMOs with more than five sharers must have two bathroom/shower units with separate toilets and two shared kitchens.