A hotel fined almost �5,000 for its squalid living conditions could close if it fails a latest inspection.

In January, the Ham&High exclusively revealed that the owner of the Happyvale Hotel, in Mornington Crescent, appeared before magistrates after health inspectors discovered a cockroach infestation and mice droppings in the Georgian town house.

A Camden Council official claimed it failed “even the most basic standards of hygiene”, with insects lodged in plugholes and seen crawling near a new born baby.

But owner Stephen Gethin, 60, says he may have to sell the four-storey guest house if he is made to improve it.

The Residential Property Tribunal Service is considering if the property should be classed as rented bedsit rooms, as most guests stay for longer than a weekend, and some stay for more than 20 years.

The tribunal is set to decide whether the hotel should be classed as a house of multiple occupancy within weeks. If it does, Mr Gethin will have to improve living conditions.

Mr Gethin, who has run the hotel for 30 years, said: “It will be too expensive for me and I’ll just go bust. I’ll have to sell it, which will be a very sad day because it means a lot to me.”

His mother bought the hotel in Harrington Square 80 years ago for �200 as a boarding house for labourers.

Guests now are long-term residents and people referred from a homeless centre.

An investigation was launched after residents complained. Inspectors found a fridge, hob, microwave and a kettle were crammed into each room, the tribunal heard on Friday. Some rooms had toilets and showers, and guests were expected to wash and clean dishes in the same sink.

Camden community safety boss, Cllr Abdul Hai, said: “We will not shy away where there is a clear need to take action to keep residents safe.”