What is a HMO?
A House in Multiple Occupation (HMO) is a house-sharing arrangement. They include tenants renting on a room by room basis. They could be sharing essential facilities such as the kitchen and bathroom.
A typical example of a HMO would be a large house shared by some students. They would each rent a room of their own but share the facilities.
The search for affordable rented accommodation is very competitive. This means that HMOs are letting to tenants from all walks of life.
For more information on HMOs, and to apply for a HMO licence, you can visit the Government website. If you’re a landlord that’s looking to buy insurance for a HMO, you can visit our HMO Landlord insurance page.
HMO Landlords insurance is essential for any landlord concerned about protecting their investment.
Why do HMO landlords need a licence?
In a HMO property, tenants form more than one household and share essential facilities. This causes the property to fall into a special category of let accommodation.
HMO accommodation is at the risk of abuse by unscrupulous landlords. This means that local councils have the authority to require a licence from any landlord intending to let property as a HMO.
There could be as little as three tenants sharing a property. If they form more than one household and share essential facilities, the local council may still require a licence to be held.
What are HMO regulations?
The licensing of HMOs has become tighter as their popularity amongst landlords has grown. The demand for affordable accommodation has soared which has also had an effect on the licensing process.
The latest round of legislation came into force on the 1st of October 2018. It gave increased powers to local authorities with respect to licensing standards.
The main changes in the new legislation came in the form of the council’s being given the power to set minimum bedroom size standards for HMOs.
These standards are:
- 70 square feet for one person over the age of 10
- 50 square feet for one person under the age of 10
The councils can also limit how many people can live in each bedroom.
The new regulations extended the criteria to obtain a HMO licence to include properties that are:
- Occupied by five or more persons
- Occupied by persons living in two or more separate households, and meet:
- The standard test under section 254(2) of the Act
- The self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats
- The converted building test under section 254(4) of the Act.
In its commentary on the new licensing regime, the Royal Institute of Chartered Surveyors (RICS) gives a warning to landlords. This warning tells landlorads to meet the necessary standards.
Otherwise, they’re likely to be in breach of their licence and may face prosecution or civil penalties.
If a room size in a HMO fails to meet the required minimum floor areas, landlords may be given 18 months in which to rectify the shortcoming.
HMO legislation changes
The 1st October 2018 marked the introduction of local authority licensing for any HMOs that let to more than five tenants, living as more than one separate household, and sharing basic facilities.
Landlords of Houses in Multiple Occupation (HMOs) faced tougher new restrictions on the standards of their let properties.
Previously, only large HMOs higher than three storeys were subject to such licensing requirements. This was extended to whatever size property you are letting on a room by room basis.
Licensing is designed to improve the general standards of accommodation in the affordable housing market.
What happens if you’re in breach of the regulations?
Before the 1st of October 2018, over 60,000 HMOs were subject to compulsory licensing. Since then, an additional 170,000 HMOs now require landlords to apply to their local council for a licence.
Landlords in breach of these new housing regulations risk criminal prosecution by the relevant local authority or civil proceedings in court.
Flagrant breaches are likely to result in a stiff financial penalty. They could also invalidate the HMO insurance on the property.
HMO landlords who are applying for the necessary operating licence will be given 18 months to ensure that their let property meets the required standards.
If you’re a landlord and you’re not complying with new HMO rules, you may face criminal charges.
Legislations for landlords changes are part of a wider Government effort to crack down on slum landlords. These are landlords who cram tenants into tiny flats and provide unsafe rentals.
These changes could mean that thousands of landlords who offer high-quality accommodation may also have to comply with the rules. This could result in costly refits.
*This article will be updated and amended whenever there is a change in legislation for HMO Landlords.