Quick Briefing: The Houses in Multiple Occupation (Asylum Seeker Accommodation) (England) Regulations 2023

The government has just published new regulations which will affect HMO accommodation occupied by asylum seekers in England. In this article we will look at what these regulations mean – as well as how they could impact the wider property market.

Background to the new HMO regulations

As most people will know, the numbers of asylum seekers arriving in the UK has risen sharply in recent years, and there is little sign the numbers will slow down. The UK government is committed to providing accommodation for these asylum seekers.

Accommodating asylum seekers in hotels has received much public attention and criticism due to the high quality and cost (estimated by one organisation at £5.6m per day) of the facilities which have often been contracted. As a result, the government has announced an intention to provide more cost effective accommodation, such as in ex-military bases and on accommodation barges.

Houses in multiple occupation would appear to be able to provide more cost effective accommodation. Indeed, HMOs are already being used for this purpose. In the explanatory memorandum to the new regulations the government says that currently 6,000 HMO properties are being used to accommodate 28,000 asylum seekers.

However it is not easy to expand capacity in this sector. As many landlords will know setting up a new HMO can be difficult: There is a raft of demanding standards to meet. It can be expensive in terms of the work needed, and licensing costs. It can also take many months to bring a new property online. The new regulations appear intended to make providing this type of accommodation easier and cheaper. In the explanatory memorandum the government says that regulation of the HMO sector ‘is posing a barrier to acquiring such properties.’

What will the new HMO regulations do?

The new regulations are being introduced as a statutory instrument under the Housing Act 2004. The practical effect will be that a shared property occupied by asylum seekers and contracted with an official accommodation provider will not be considered to be an HMO.

Although there are already a number of exceptions from HMO licensing (such as shared accommodation provided by a public body) the new regulations are not adding a new exception as such. Instead, they are changing the definition of what an HMO is.

Normally a property is an HMO for the purposes of Part 2 of the Housing Act 2004 if it meets the definition set down in section 254. However, the new regulations will amend this definition by inserting new subsections (5A and 5B) which put asylum seeker accommodation outside their scope.

For the purposes of the regulations the subsections only apply where the person managing or having control of the property is either an AASC (Asylum Accommodation and Support Contract) provider contracted with the Secretary of State or a relevant landlord contracted with such a provider.

For the purposes of the regulations ‘asylum seeker’ means a person to whom support may be provided under section 4, 95 or 98 of the Immigration and Asylum Act 1999.

Although the regulations are being introduced under powers available in England and Wales the scope of these regulations is England only.

A relevant point to bear in mind is that there have been legal wrangles recently regarding the status of hotel accommodation being provided to asylum seekers, ie. whether it is still a hotel or has become a hostel and whether planning permission for change of use is needed. This argument could also extend to whether such accommodation requires HMO licensing.

How the new regulations might affect the property market

It is very early days, so this is very much speculation.

The government say in their explanatory memorandum that ‘no significant impact on the private or voluntary sectors is envisaged.’ It is difficult to see how this will be the case however.

The regulations will potentially allow existing HMOs, which are contracted to provide asylum seeker accommodation, to move outside the HMO licensing regime. They will not need a licence, not pay licensing fees, and will not need to meet HMO standards.

New HMO type property to accommodate asylum seekers will be able to be created more easily, quickly and cheaply.

Property owners who have suitable property may be approached to create new asylum seeker accommodation under the new regulations.

It may be possible to create new shared asylum seeker accommodation anywhere without the usual regulation or planning control, including in Article 4 HMO areas, as they will not be HMOs. This could potentially lead to issues in local communities and issues for local authorities.

It will be possible for the standards of this type of accommodation (including room sizes and amenity standards etc.) to be below that of an HMO and local authorities may not be able to use HMO licensing measures to enforce them. Local authorities may be able to use other powers under the Housing Act 2004 and other legislation to control these standards however.

It could cause a shortage of HMO accommodation for the wider market if existing HMOs are converted into asylum seeker accommodation.

Local authorities could lose HMO licence fee income. The government says it is providing funding to local authorities to help support asylum seekers but is not specifically offering to cover lost licensing income.

Of course, it is possible that there will be no large scale provision of new HMO accommodation for asylum seekers directly as a result of these regulations. It could be that the regulations are being made so that any accommodation which is provided falls outside of HMO licensing.

There are bound to be many legal arguments and potential legal cases over the next couple of years as a result of these new regulations.

When will these new regulations take effect?

At the time of writing the regulations have not come into effect and are merely in draft form. They are expected to come into force very shortly.

This exemption will apply to HMOs which begin use as asylum accommodation between the day the regulations come into force and 30 June 2024 and will apply for two years. It is proposed that they will be automatically repealed on 1 July 2026.

Read the regulations here

At the time of writing the proposals are contained in a draft statutory instrument: The Houses in Multiple Occupation (Asylum Seeker Accommodation) (England) Regulations 2023.