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HMO fees set to rise despite concerns landlords could pass costs onto tenants

The Civic Centre in Newport (Credit: LDRS)

LANDLORDS who own HMOs in Newport could be charged up to an extra 10% in licensing fees.

The city council has included the proposal in its budget-saving measures for the coming financial year.

The move has proved one of the most popular ideas for savings, earning the backing of 81% of respondents in a recent public consultation on the budget.

But critics have also warned the move could end up backfiring if higher prices are passed onto tenants, or if a future lack of HMOs hurts the council’s ability to move residents out of temporary accommodation.

HMOs (houses in multiple occupation) are typically properties for single, unrelated adult tenants who have their own private bedrooms but share other facilities such as kitchens, bathrooms or living rooms.

Many councils, like Newport, place restrictions on the number of HMOs allowed in a neighbourhood because of pressures on parking and waste collections.

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It currently costs a landlord £1,231 for an initial HMO licence, but in larger properties for six people or more, this figure then rises by £67 for each additional occupant.

Under the city council’s final budget proposals, due to be debated by the cabinet on Wednesday February 14, these fees – as well as advice and renewal costs – could all rise by as much as 10%.

During the recent public consultation, more than 500 people shared their views on the proposed fee hikes.

Some 81% backed the move, while 4% preferred a smaller price increase and 8% opposed any rise.

One supporter called on the council to “increase the fees further in this area” to be “reflective of the huge increases in rent and profits that private landlords… charge”.

Another said the council should increase fees for HMOs to “make them less feasible”, but should “reduce fees for family dwellings”.

And a third supported increasing fees for “professional council services” to individuals and businesses.

However, there was concern among other respondents that the move could have negative effects for the city.

One said they were concerned any fee increases would be “put on the tenants”, having an “adverse effect on them” and potentially leading to “more pressure on [temporary] accommodation and homelessness”.

Another claimed it would be “unfair” to “penalise landlords that do not have a large portfolio of houses”.

A third critic warned the higher fees could lead to fewer HMOs in Newport.

“The council should be careful not to hurt the growth of HMO stock, which at present is the best solution for moving households out of temporary accommodation and onto full housing benefit,” they said.

Newport City Council’s cabinet is expected to back the HMO fee rises at Wednesday’s meeting.

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