Government lawyers are looking into how recent court defeats will impact how councils charge shared house licensing fees.

In the first case, the High Court declared Richmond Council, in South West London, illegally levied a fee to cover the cost of managing a shared house licensing scheme.

The judges ruled that the council could only charge a fee to cover the processing of the landlord’s application.

In the second case, Westminster Council, London, was told by the Supreme Court that they could not charge sex shop operators for the cost of running a licensing scheme, only for processing their licence applications.

The judgments have thrown the financing of house in multiple occupation licence schemes into disarray with hundreds of landlords expecting refunds of some of the costs of their licences.

The Department of Housing, Communities and Local Government has revealed lawyers are looking at the implications of the cases and have advised councils to take legal advice as well.

“The department is obtaining a legal view on the full implications of the ruling which it will share with local authorities in due course,” said a spokesman.

“We suggest that in parallel, local authorities obtain their own legal advice on the implications on their specific HMO licensing schemes, since not all schemes will be structured the same.

“Local authorities may also find it useful to carry out an assessment of how many licences they may have rejected under property licensing schemes to understand the impact the ruling might have locally.”

Meanwhile, the department is looking at other initiatives affecting buy to let homes.

They include appointing  a market research firm to conduct a review of selective licensing schemes to report in spring 2019 and publishing the results of a consultation into electrical safety in private rented homes.