In a consultation published on 18 October, the Department for Communities and Local Government proposed to apply licensing rules to all shared homes with five or more people from two or more households and to flats attached to business premises.
In contrast, currently licensing only kicks in for homes with three or more floors and excludes homes attached to businesses, unless they are in three-storey buildings.
Landlords who fail to obtain a licence can be criminally prosecuted and will be liable to pay a potentially unlimited fine, the government said.
Housing and planning minister Gavin Barwell said: “In order to build a country that truly works for everyone we must ensure that everyone has somewhere safe and secure to live.
“These measures will give councils the powers they need to tackle poor-quality rental homes in their area.
“By driving out rogue landlords that flout the rules out of business, we are raising standards and giving tenants the protection they need.”
The new rules, which will affect properties in England only, are likely to be implemented at some point during 2017, once approved by Parliament.
Flats above shops also affected
Under the plans, mandatory licensing would also apply to single and two storey houses occupied as houses in multiple occupation (HMO), including properties converted into bedsits or occupied by sharers.
It would apply to buildings that are used as clusters of letting rooms where the occupants share one or more basic amenity.
Finally, it will extend to flats above and below business premises – regardless of the number of storeys – as the government believes there are more problems in these type of properties than others.
Each flat that is subject to mandatory licensing will require a separate licence, the government said. This rule will also apply to buildings with mixed accommodation.
It addition to tighter requirements the government is also considering whether the current licensing arrangements for purpose built student accommodation are appropriate.
Current proposals envisage an initial grace period of six months during which no landlord can be prosecuted for not holding a new licence. Holders of old-regime licenses will be passported into the new regime free of charge, the government said.
New rules for the minimum size of rooms
In addition to new licences the government plans to introduce mandatory guidelines for the size of rooms that can be let to tenants in shared households.
The proposals prescribe minimum bedroom sizes of 6.52 square metres for one person and 10.23 square metres for two people. The rooms will also be a minus of 1.5 metres high.
However, local housing authorities would still be able to set their own room size guidance standards based on the housing conditions in their areas.
Any breach of the rules would be considered an offence and come with an unlimited fine or a financial penalty of up to £30,000, the government said.
Tougher checks on landlords
Meanwhile, the consultation document proposed tougher fit and proper person test for landlords. This would include ensuring that criminal record checks are carried out.
The government said it wants to “weed out the rogues”. It wants to protect vulnerable people, who it believes, are more likely to be housed in HMOs than in the wider private sector.
In early 2016, more than 33,000 homes were inspected by local authorities leading to almost 2,800 rogue landlords facing prosecution for providing substandard homes, the government said.
Since 2011 local councils have been given £12m in government funding to carry out raids, issue statutory notices and demolish beds in sheds.