A Guide to HMO Licensing for Landlords

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The HMO market: the factors you need to consider, whether you’re looking to get into the market, or an experienced property professional.

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In a change to our usual Property blogs, our friends at Dwell Estate & Letting Agents have kindly offered their expertise on the UK HMO market.

HMO for anybody outside the Property Investors world, stands for a “House in Multiple Occupation”. It refers to houses that are let out to 3 or more people who are not of the same “household”. 

Rather than letting the property as a whole to a “household” (usually a family), HMOs allow a landlord to rent out the property bedroom-by-bedroom to individuals, with the communal areas remaining entirely as property of the landlord. 

This benefits landlords as profit margins are almost always higher with this type of agreement, but tenants can also benefit from having more affordable housing available to them.

What is a HMO Licence?

If you want to rent out your property as a HMO, the building in question needs to meet certain requirements. These requirements were drawn up to prevent unscrupulous landlords from turning almost every room in a property into a bedroom, and renting out their “HMO” to more tenants than was reasonable.

The requirements take into account bedroom size, amenities available in the communal areas of the home, and the general level of safety in the property.

HMO licences are applied for through the local council. You can make an application here.

They need to be renewed (with all the requirements approved) every 5 years.

What health and safety rules need to be followed to gain a HMO Licence?

Given that living with people who you are unrelated to (and often unfamiliar with) is deemed to increase the risk of harm to tenants and the property, HMOs require more rigorous health and safety regulations than buy-to-lets.

These regulations include:

  • A designated fire exit and an “emergency strategy” for fires, which is accessible to all tenants
  • Interlinked smoke alarms in every communal room
  • Annual Gas Safety checks
  • Electrical safety checks every 5 years.

Landlords also need to pass a “fit and proper persons test”. This is to try to prevent landlords from exploiting their tenants. It is essentially a criminal history check, so if you do not have a criminal record this should be a formality.

These requirements mean that sometimes work needs to be completed on a home in order to convert it into a HMO. Landlords need to fund this work themselves

What amenities does a HMO landlord need to provide to their tenants?

HMO landlords are required to provide “adequate washing and cooking facilities” to their tenants.

This generally equates to having a shower, at least one toilet for every three tenants, and a hob and oven. You also need to provide a fridge that is large enough to reasonably hold enough food for all tenants.

HMOs also need to have waste disposal facilities outside of the house, and these need to be collected regularly,

It is important to note that a landlord has no obligation to have a dedicated living room for their tenants.

What are the minimal required sizes for bedrooms in HMOs?

The minimum required size of a bedroom in a HMO depends on how the bedroom is being used.

For a single room occupied by someone over the age of 10, the minimum required size is 6.51m2.

For a double room (where two people are paying rent for one room), the minimum required room size is 10.22m2.

A single room occupied by someone under the age of 10 has to be 4.64m2 as a minimum.

These minimum required areas refer to the amount of “usable floor space” in a bedroom. “Usable floor space” is any floor space where the floor to ceiling length is more than 1.5 metres.

How long does a HMO licence last?

HMO licences need to be renewed every 5 years. In order to renew a HMO licence, the property needs to be re-checked to ensure that it still meets the HMO requirements.

Local councils understand that when a landlord’s property fails to meet the regulations required for a licence, this is usually not caused intentionally by the landlord. If you do fail a licence renewal, the council will give you a set period of time in order to raise your property up to the required standards.

If you fail to meet these requirements in the allocated time, you could face a fine or even losing your licence on that property.

 

To read any of our previous HMO-related articles, please click below:

New regulations come into force on 1st October 2018 in relation to homes of multiple occupation (HMO’s).

https://www.reichinsurance.co.uk/media-centre/changes-to-hmo-licensing/

Mandatory professional checks every 5 years or face a £30k fine.

https://www.reichinsurance.co.uk/media-centre/mandatory-professional-checks-every-5-years-or-face-a-30k-fine/

Further HMO-related articles can also be found on the Dwell Estate & Letting Agents website:

http://www.dwell-leeds.com/blog/how-to-get-planning-permission-for-a-hmo

 

Finally a huge thanks goes to our friends at Dwell for contributing this important article.

 

Tags: HMO | Landlords | Property Investors | Property Managers