According to the Government’s website, the definition of a House in Multiple Occupation -HMO for short - is, “if you let (or plan to let) to at least three tenants who form more than one household and who share (or will share) toilet, bathroom or kitchen facilities”.

Put simply, if you’re renting a property out to three or more tenants who are not members of the same family, it is likely that HMO rules will kick in. Aimed at stamping out rogue landlords who let their properties in poor condition to too many tenants, it means adhering to a stricter set of rules.

The pros
Yields for HMOs can be higher compared with non-HMO properties, as you’re renting out by the room and therefore maximising your investment.

Cons
HMOs require more time and effort, as well as more investment to meet health and safety requirements. It’s possible you’ll have to satisfy the local fire officer before you’re licensed, which can mean installing emergency lighting in the hallways, fire extinguishers and ensuring the fire alarms are regularly tested.

In addition, landlords will need to maintain the property in a fit and safe condition, making sure the layout and facilities meet minimum standards, and that the property is safe, habitable and occupancy is kept at an acceptable level. A special, more expensive, insurance policy is required.

Need to know:
You may well need to apply (and pay) for a license if you own an HMO. If you own a large HMO, for example - defined as a property with three or more storeys containing five or more tenants - then you definitely will. Some councils require smaller HMOs, or HMOs in certain areas, to have a license too. For an idea of cost, Brent Council in northwest London charges between £800 to £1,100 depending on the length of the license and number of rooms.

Top tip:
“It is worth remembering that local authorities interpret the rules in different ways,” says TJ of Upad. “Speak to your local housing office for clarification”.

Related posts:

  1. Council announces HMO inspection programme
  2. Landlords urged to license their houses
  3. Fire results in £8,000 landlord legal bill
  4. Opposition towards HMO charter
  5. Landlord banned due to dangerous electrics

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