A north London council that is home to two streets described by a councillor as “the frontier of the wild west of the rental market” is to crack down on flats deemed too tiny or dirty for human habitation.
Islington will start consulting on Monday on a licensing scheme for Holloway Road and Caledonian Road, both major routes that together contain about 600 properties subdivided into flats to allow landlords to maximise their income in London’s booming rental market.
Among the properties, which are home to 3,500 tenants, are some that do not have planning permission, the council said, and its door-to-door inspection in May revealed that many were being let in a substandard condition.
Of 208 properties visited by council officers, 141 had problems such as dirty communal areas, mice infestations and use of box rooms as homes.
One property, owned by local landlord Andrew Panayi, had been converted from a hostel to 19 studio rooms, some as small as three metres by three metres, for which tenants were paying £255 a week in rent.
With a booming property market forcing many more people into the private rented sector, there has been growing concern about the size and condition of some properties. Savills estate agents put the price of a starter home in the borough at more than £340,000 last year.
Islington council is proposing to force landlords on the two streets to apply for licences for all rented properties occupied by three or more people living as two or more households.
Under current rules, licences are only required if a house in multiple occupation, or HMO, has more than three storeys and is shared by more than five people.
The council wants landlords to pay £260 to license each bedsit, studio or bedroom for up to five years; those who fail to do so could be fined up to £20,000 for each house. The new rules could come into force after the consultation ends in January.
James Murray, Islington’s executive member for housing and development, said every tenant he had talked to in the area was supportive of the idea. “The problems with the private rented sector are widespread, but I think it’s right for us to be focusing our resources in this area – it really is the frontier of the wild west of the renting market,” he said. “Islington is a fantastic place to live, people are desperate to be here, but there is such a shortage of housing and that leaves them vulnerable to rogue landlords.”
On Tuesday the council served an enforcement notice on the Panayi property to convert it back to its previous use as a hostel, or seek planning permission to create habitable homes, including affordable housing. Murray said there had been “repeated issues” with the landlord’s properties, but that he was not the only owner who would be caught by the new rules, if they are approved.
Panayi told the Guardian the move would not have an impact on his business, but that setting up an HMO was expensive and “people who only have one or two investments will be discouraged from continuing”. He said he was selling off some of his studios. “The prices at the moment are so high that the returns we are getting at the moment are not very good. I’m currently selling off 17 units and by the end of next year it will be 50 – it’s about 20% of my portfolio.”