Houses in multiple occupation (HMOs)

If you let out a property to multiple tenants, typically students, you may need a special HMO licence. And in order to get that licence, the property will have to meet particular criteria.

Definition of an HMO
If you let a property which is one of the following types, it is classed as a House in Multiple Occupation:
• An entire house or flat that is let to three or more tenants who form two or more households and who share a kitchen, bathroom or toilet
• A house that has been converted entirely into bedsits or other non-self-contained accommodation and that is let to three or more tenants who form two or more households and who share kitchen, bathroom or toilet facilities
• A converted house which contains one or more flats that are not wholly self-contained (ie the flat does not contain within it a kitchen, bathroom and toilet) and that is occupied by three or more tenants who form two or more households
• A building that is converted entirely into self-contained flats if the conversion did not meet the standards of the 1991 Building Regulations and more than one-third of the flats are let on short-term tenancies.
Source: Department of Communities and Local Government

In April 2006, the Government enforced mandatory licensing for a sub-group within HMOs, with the aim of raising the standard of accommodation for people living in such properties. The rules are fairly complicated, so landlords need to look at them closely.

Is your HMO subject to mandatory licensing?

Under the national mandatory licensing scheme an HMO must be licensed if it is a building consisting of three or more storeys and is occupied by five or more tenants in two or more households. When counting the number of storeys in the building you need to include:
• Basements and attics if they are occupied or have been converted for occupation by residents or if they are in use in connection with the occupation of the HMO by residents
• Any storeys that are occupied by you and your family if you are a resident landlord
• All the storeys in residential occupation, even if they are self-contained
• Any business premises or storage space on the ground floor or any upper floor. You do not need to count basements used for business or storage unless the basement is the only, or principal, entrance to the HMO from the street.  
Source: Department of Communities and Local Government

In addition to mandatory licensing is an extra licensing scheme that some councils may employ. So your council may have additional licensing over and above mandatory licensing and covering other types of shared accommodation – for example properties with less than five tenants may still require a license.

Landlords of an HMO that requires a licence will have to apply to their local authority, and it is granted on payment of a fee and if the property in question meets certain standards. For example, the property needs to be reasonably suitable for occupation by the number of tenants allowed under the licence and to abide by minimum standards. These include the number, type and quality of shared bathrooms, toilets and cooking facilities.

Criteria also cover the competence of the person proposed to manage the property – the local authority where you intend to purchase will give you more information.




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