With these tenancies, landlords typically pay bills and council tax on behalf of tenants and then pass on a single monthly charge to renters. If council tax rises, landlords must absorb the cost or pass it on to tenants in the form of higher rents.
Daryn Brewer, 43, is a landlord and developer in Portsmouth. The city is in the top 20 local authorities in the country for large rental properties.
He rents a six-bedroom property to tenants but the Valuation Office Agency told him it had been classified as six separate dwellings. This meant the total council tax bill for the property quadrupled from £1,821 to £7,287.
“This looks like the poll tax. It’s an absolute mess,” Mr Brewer said.
Councils do not classify properties for tax purposes themselves. But Chris Daniel, a housing consultant, warned that cash-strapped councils were able to refer HMOs to the Valuation Office to be reclassified as multiple properties.
Calli Robertson, 47, is a landlord with 15 properties in Peterborough. The council tax bill on one of her five-bedroom homes quadrupled from £1,300 per year to £4,890. It was reclassified as five one-bed homes, even though three of the bedrooms did not have en-suite bathrooms and none had kitchen facilities, she said.
The council tax jump meant that Mrs Robertson needed to raise the rent on the cheapest room by 23pc.
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