Landlords are breaking the law by renting out tens of thousands of shared homes without house in multiple occupation licences in London.
New research suggests 310,000 shared homes in the capital should have a licence but only 58% of landlords have bothered to make an application.
That leaves more than 130,000 homes rented out illegally either because the landlord does not know a licence is needed or because the landlord is deliberately breaking the law.
The study, by letting agent trade body safeagent explains that HMOs fall into three licensing categories – mandatory licensing enforcing standards across England and Wales and additional or selective licensing imposed by councils in specific neighbourhoods.
The safeagent data shows landlords have made an application for only one in four of the 138,500 properties needing an additional licence, while selective licensing zones covering 173,000 homes have an 85% take up.
Renting out an HMO without licence means the homes are not checked for fire and safety, while landlords flouting licensing and housing law face criminal proceedings, fines or a civil penalty of up to £30,000 for each offence.
Safeagent CEO Isobel Thomson said: “The survey results are concerning. Consumers are not well served and many are placed at risk through this mish-mash of licensing schemes.
“The system isn’t fit for purpose and councils are drowning in paperwork. Landlords needing property licences are either deliberately evading the schemes or are in the dark concerning their legal responsibilities and tenants are being placed at risk.
“If the compliance rate for HMO licensing schemes is only 25%, how can these schemes be effective? This is about proper use of public money and consumer protection. Where are the assessment procedures for councils who have schemes in place? Isn’t it time we went back to the drawing board to come up with a simple, streamlined system that works for all?”