The lender claimed that the licencing was putting landlords off investing in the sector, with 43 per cent of landlords saying the legislation was making them avoid HMOs.
Discrepancies in the level of cost and information required across different councils were also a concern for landlords. Costs ranged from £80 a year to £1,100 per year, with 17 per cent of councils raising the cost in the last 12 months, while there were 11 different application processes across the country.
However, most concerning was the fact that over a year after the HMO legislation came in, 23 per cent of landlords still didn’t know about the scheme.
Mark Sismey-Durrant, chief executive of Heritable Bank, said: “This scheme had laudable intentions of raising the quality at the lower value end of the private rented housing sector, but was introduced with no central guidelines on cost or structure and the results were entirely predictable. The government must urgently review the framework for licensing HMOs, so that all parties know what is required of them and what the likely cost to them will be. This will enable professional landlords to budget both the time and money needed for the successful development of the HMO lettings market.”
Paul Field, divisional director, residential lending at West Bromwich BS, said: “This was predictable. It doesn’t surprise me that, with patchy implementation, it hasn’t worked out in the way the government hoped.”
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