LANDLORDS of shared houses could be charged business rates under council plans.

Brighton and Hove City Council’s Labour administration is preparing to write to the government for a change in the law to allow the authority to charge HMO landlords business rates. However the suggestion has sparked fears the costs could be passed on to tenants and push up rent prices in the city even further.

The council's Labour group says the proposals will create a level playing field with hotels, self-catering holiday homes and lets while helping to control ever increasing numbers of HMOs in the city.

Conservative councillors have warned landlords could simply pass on the added cost to tenants but Green members called for the proposals to be extended to all non-resident landlords.

Industry experts claim the plans will create an unfair system where HMO landlords are put at a financial disadvantage to buy-to-let landlords.

Labour councillors will ask rival parties to back the proposal for the city, which has the highest number of HMOs in the country with more than 15,000, before taking the proposal to government ministers.

A party spokeswoman said it would be for the government to work up the details on the scheme making it impossible at the current stage to estimate any potential additional revenue - but said they hoped it would boost council coffers by hundreds of thousands of pounds a year.

She added any additional income could be used to meet the cost of providing council services to HMOs as well as their enforcement and regulation.

Council leader Warren Morgan said city communities were changing under the increasing impact of HMOs.

He said: “Our universities contribute hugely to the city, we need to find a happier balance between the costs and benefits of being a university town.

“We are looking at more enforcement and regulation of HMOs but the government needs to play its part as well by helping us offset the additional costs.”

Conservative group leader Geoffrey Theobald questioned whether Labour understood the implications of their proposals.

He said: “Additional costs will either be passed onto struggling tenants by landlords or landlords will simply withdraw from the market thus reducing the amount of accommodation available.

“It is not just students who live in HMOs, a sizeable proportion are occupied by people who can neither afford to buy nor rent a whole flat or house in the city and they already pay council tax.”

Paul Fitzgerald, National HMO Network chairman, said: “It seems unfair to be charging business rates, HMOs are no more a business than a single buy-to-let.

“If you are going to start charging business rates on HMOs then they should charge it on single family lets as well because that is a business as well, they are not doing that for charity.”