Agenda item

To seek Full Council approval for the HMO licensing fee structure for the 2026/2027 financial year, to take effect from 1 April 2026. Two cost-recovery models are presented for consideration, reflecting current and enhanced enforcement approaches. Where the enhanced model is approved, the report also seeks approval for the associated allocation of funding to support implementation.

Note:  Councillors Vanessa Smith, Jane Wood and Paul Wood did not return to the Council Chamber following the adjournment.

Members considered the Houses of Multiple Occupation (HMO) licensing fee structure for the 2026/2027 financial year, to take effect from 1 April 2026. Two cost-recovery models were presented for consideration, reflecting current and enhanced enforcement approaches.

The following points were highlighted during debate:

·         This report had come back to Full Council following additional research undertaken by officers on the levels of fees associated with HMOs.

·         There were two options proposed (options 1 and 2). Option 2 was a copy of Option 1, with the addition of compulsory inspections for HMOs. Option 2 would also require an additional member of staff, with £55,000 needed for this post. This was not the exact salary for this post, as it included national insurance and pension contributions. The post could not be funded by HMO fees alone; the intention would be to recruit a full-time member of staff. Using the General Fund, this member of staff would assist the Private Sector Housing team with their new responsibilities, which had arisen due to the new Renters’ Rights Act.

·         Fees for HMOs had to be set for cost recovery only.

·         ‘Unlicensed HMOs’ could be a loaded phrase and could give the impression of wrongdoing; HMOs with less than five occupants were not required to be licensed.

·         You must have a mandatory HMO licence if:

o   The property is occupied by 5 or more people

o   The tenants form 2 or more separate households

o   The tenants share facilities such as a kitchen, bathroom, or toilet

·         Increasing HMO fees to discourage the creation of new HMOs was not permitted.

Option 1 within the report was proposed and seconded:

Current Cost Recovery Model - the HMO licensing fees as set out in the Fees and Charges report considered by Council on 29 January 2026 reflecting the full cost recovery model based on current levels of service delivery and enforcement.

On being put to the vote, this option was not agreed and therefore FELL.

Option 2 within the report was proposed and seconded – the following points were highlighted whilst debating this proposal:

·         It was concerning that in wider society there were people that want to look down on the residents of HMOs. There was a wide cross-section of society living in HMOs.

·         Grantham had an increasing number of HMOs.

·         This option was not an attack on tenants, nor about demonising HMOs, it was concerning the council not running an underfunded service. Enforcement was necessary to enable yearly welfare checks on residents within HMOs, who should always feel safe and supported.

·         Residents living in these HMOs could be vulnerable. It was important to remember the role that HMOs played in the provision of housing for single people. HMOs provided vital housing – last summer the district witnessed people living in tents. Nobody should have to live in a tent.

Having previously been proposed and seconded, following a vote it was AGREED:

DECISION

That Full Council

1.    Approves the ‘Enhanced Enforcement Cost Recovery Model’ option for setting the Houses of Multiple Occupation (‘HMO’) Licensing Fees for the period 2026-2027, to take effect from 1 April 2026:

a.    The revised HMO licensing fees set out at para.2.10 of this Report, reflecting cost recovery associated with an enhanced HMO enforcement and compliance function.

b.    The allocation of funding from the Local Priorities Reserve to support the recruitment of an additional HMO Officer at an estimated annual cost of £55,440, and delegate authority to the Section 151 Officer to implement the necessary budget and reserve adjustments.

2.    Delegates authority to the Section 151 Officer, in consultation with the Director of Housing and the Monitoring Officer, to implement the approved fee structure.