BREAKING: Council launches huge HMO scheme with £520 PER ROOM fees

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One of London’s largest local authorities is planning to introduce a pricey and borough-wide additional licensing HMO scheme that, if approved, will go live in November.

Lambeth is the capital’s fourth largest borough with over a quarter of a million residents and the 32^nd largest in the UK with 10% of its PRS stock being HMOs.

The borough is already covered by a mandatory HMO licensing regime for properties with five or more unconnected people living in a property with shared facilities.

The new additional licensing scheme across the whole borough would bring houses and flats with three residents living in two more households within its regulatory clutches.

Habitable room

Also, the scheme will be expensive with landlords expected to pay £520 per habitable room – not property – for a licence, although discounts of up to 50% will be available in some circumstances.

A briefing document also reveals that Lambeth has revised up the number of HMOs within the borough to 5,000 from 1,900, which is the figure it quoted when consulting on additional licensing earlier this year.

To back up its proposal, Lambeth says anti-social behaviour or ASB rates per 1000 properties are significantly higher in the HMO sector when compared to the PRS as a whole and that 37% of the HMOs within Lambeth contain one or more serious hazards that affect the health and safety of the residents of Lambeth.

Lambeth also claims that the scheme will be self-financing, costing and raising – from landlords – approximately £10 million during its five-years of operation.

Cabinet Member for Housing and Homelessness, Councillor Maria Kay (pictured) has recommended the report which will now be scrutinised by Lambeth during a full Cabinet meeting.

Read more about HMOs regulation in Lambeth.

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Gas boiler sales face a 2026 ban

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The sale of new boilers that are only able to run on natural gas could face being banned by 2026 according to recent information published by the UK government.

The Government is currently consulting on plans to make sure that all new boilers are capable of running on hydrogen, or at least partly on hydrogen, instead of 100% gas.

Hydrogen does not produce carbon dioxide when burned and government ministers are hoping this alternative fuel for heating could be supplying up to 35pc of the UK’s energy consumption by 2050.

Government agencies are currently conducting tests to determine whether it hydrogen can be used safely and effectively to replace natural gas in UK homes.

On a new hydrogen strategy revealed last week, government officials have commented:

“We aim to consult later this year on the case for enabling, or requiring, new natural gas boilers to be easily convertible hydrogen use and be “hydrogen-ready’ by 2026.”

A potential complete ban on the sales of new natural gas-only boilers would effectively bring forward existing long-term plans to put an end to traditional boilers being installed in new-build homes by 2025.

A new direction for fuel production?

So far the production of hydrogen fuel in the UK is minimal. There are just a handful of startups in the business converting water and fossil fuels to hydrogen, but the government is encouraging suppliers to increase production and has launched a consultation on subsidies for producers.

A basic distinction is made between conventional hydrogen production based on fossil feedstocks, e.g. through steam reforming of natural gas, and renewable hydrogen production based on renewables such as bio-gen processes or electrolysis of water (H2O) with wind power, water power or solar energy.

Today, hydrogen is mainly produced by steam re-forming fossil fuels such as natural gas and some excess hydrogen is recovered as a by-product from various industrial processes. But even though hydrogen generated from fossil fuels has the advantage of zero emissions, the production chain still leaves a carbon footprint.

The long-term aim is to significantly increase the sustainable share in the hydrogen mix using renewable energy sources such as wind, water and biomass, while at present electrolysis of water using wind, water or solar power, and re-forming of biogas are viable alternatives that offer a zero-emission hydrogen energy cycle.

The carbon free challenge

Currently natural gas provides 74pc of the energy used for home and commercial heating and hot water, which produced about 85m tons of the carbon dioxide emitted in 2019.

The government is considering hydrogen as one option as an alternative to natural gas, along with heat pumps, which extract energy from the outside air and ground, though these also are not carbon neutral as they result in more consumption of electricity.

The use of hydrogen in domestic heating remains remains a hot topic of debate because they tend to be less fuel energy efficient and hydrogen has a corrosive effect on the infrastructure network – the pipes in other words.

The commercial reality

Boilers capable of multi-fuel use or pure hydrogen burning are yet in the commercial development state and work still needs to be done to set industry standards. Currently it is estimated around 1.6m boilers are replaced every year in the UK.

Carl Arntzen, chief executive of Worcestor Bosch, a company that makes heat pumps and boilers, has said:

“There is an air of urgency about these things, so the sooner the better. Supply chains can be scaled up within that sort of time frame.

“If the Government mandates hydrogen-ready boilers and then there is a hydrogen switch-over in an area, then we just need to change a couple of components on the hydrogen ready boiler which will take about 40 minutes, then that boiler is ready to fire 100pc hydrogen.”

Antony Green, hydrogen project director at National Grid, has said:

“I think it’s very good news the Government are planning to consult on it. It creates opportunity for us. Let’s establish hydrogen-ready boilers as the default, then as and when ready we can switch. It’s very akin to the digital TV switch-over.”

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LATEST: Poll reveals landlord worries over looming EPC upgrade challenge

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A third of landlords are not confident their properties can be raised to the minimum EPC band C in time to meet the government’s deadline, a new poll has revealed.

All rented properties within England and Wales must reach the EPC band C level by 2025 for new tenancies and 2028 for all remaining ones, leaving landlords with just four years to plan and pay for upgrades.

Nationwide’s specialist lender The Mortgage Works canvassed 750 landlords on the subject and found that half of those struggling to attain the EPC rating said the limitation of their buildings – for example listed status – made upgrades difficult or impossible.

Other concerns included access to the property while tenants were in situ and the disruption caused, little or no payback on the investment, limited benefits for their tenants, difficulties finding reputable or available tradespeople, difficulty understanding the complicated rule governing upgrades and a lack of cash.

Smaller struggling

The poll also reveals that smaller portfolio landlord will be the least able to cope with the new EPC requirements, that 14% of landlord said they’d need to spend a whole year’s rent to upgrade their property and that one in ten just ‘have no idea where to start’ although 41% said they were aware of what needed to be done.

Daniel Clinton (pictured), Head of The Mortgage Works, which offers green upgrade financing, says: “Given the concerns and challenges facing landlords in not only making the necessary improvements, but financing them, it’s perhaps no surprise that more than a third of landlords are not confident they will be able to bring their properties up to the required EPC ‘C’ standard.

“It’s also great to hear that the Government would like to introduce a new financial support package to help people improve the energy efficiency of their homes, however, we hope that any such scheme would also be open to helping landlords meet their requirements.”

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Government looking to make Self Build a more mainstream option

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Richard Bacon MP’s review of Custom and Self Build, commissioned by the Prime Minister, finds huge potential in the Self Build sector which could deliver 30-40,000 more homes every year, and recommends a major-scaling up of self-built homes to boost the overall housing supply.

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Rent controls planned by new SNP/Green coalition

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The Scottish Government and the Scottish Green Party Parliamentary Group have agreed to work together over the next five years. Click here

A shared draft policy programme, ‘the Bute House Agreement’, has been agreed upon and includes the implement an effective national system of rent controls

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Key report on EPC changes, binning gas boilers and financing heat pumps due

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The government’s hotly-awaited Heat and Building Strategy review setting out its plan to eliminate gas boilers, roll out low-carbon alternatives and reform EPCs is only weeks away, it has been reported.

Landlords will have plenty to digest when it is published. If the government sticks to its plan to upgrade all rented properties to an EPC Band C by 2028 including new tenancies by 2025, then some 3.2 million properties will have to be improved in many cases at their landlord’s own expense.

Following the premature ending of the Green House Grant, landlord can now only get grants in limited circumstances.

It will also set out how the government expects to de-carbonise all homes within the UK. This will include replacing all gas boilers by 2025 with heat pumps (main pictured) and where that’s not practicable, replacing natural gas with hydrogen.

Landlords will face significant costs when doing this, The Times has claimed today.

It estimates that a semi-detached or mid-terrace property currently costs about £600 a year to heat. But after subsidies the current cost of installing a heat pump would be between £7,000 and £8,000, bringing down bills to about £500 a year.

Heat pump grant?

The government in considering a Clean Heat Grant that would give landlords £4,000 towards the cost of a heat pump, but this has not confirmed yet.

A hydrogen boiler would cost about £3,000 but hydrogen bills would be about £900 a year.

The Heat and Building Strategy review is also expected to suggest a reform of the EPC system which, as LandlordZONE has reported many times, is a one-size-fits-all approach that often produces wildly inaccurate results.

One example of this is supplied by landlord Tricia Urquart who told LandlordZONE earlier this year: “Several of my eight properties in areas without a gas supply had storage heaters so I bought top-of-the range modern radiators, but for an EPC assessment, that’s the same as buying a £25 convection heater that huffs out hot air.”

But the review is unlikely to go down with tenants well either – it is reported that Ministers want to charge those using gas boilers more money in order to subsidise the huge cost of getting low or zero-carbon alternatives up and running.

Read more: Will the new gas boiler ban impact buy-to-let landlords?

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View on flooring clauses in a tenancy?

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Hi, I have just been having a discussion with my wife regarding costs and tenancy agreements, and I am curious about what other landlords do. I have just completed inspections on my portfolio and one of my tenants has just asked for new carpets on the hall

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