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What is an HMO?

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A House in Multiple Occupation (HMO) represents a house sharing arrangement, with tenants renting on a room by room basis and with some or all of them sharing essential facilities such as the kitchen and bathroom and toilet. 

A typical example of an HMO might be the large house shared by a number of students, each renting a room of their own but sharing facilities. As the search for affordable rented accommodation intensifies, however, HMOs are increasingly let to tenants from all walks of life – from those on welfare benefits to professional, working individuals.

The spread of different tenants currently living in HMOs is mentioned by the property portal Your Property Network.

A more detailed definition of an HMO is given on the official government website and in our own product page for HMO landlord insurance (an essential safeguard for any HMO landlord concerned about protecting his investment in this particular form of buy to let property).

A distinctive category of let property

Because of the nature of an HMO, with several tenants forming more than one household and sharing essential facilities, these properties fall into a special category of let accommodation.

Because of the special nature of the accommodation and the risk of abuse by unscrupulous landlords, local councils have the authority to require a licence from any landlord intending to let property as an HMO.

A licence is required, for example, if there are more than five tenants (at least one of whom is paying rent), forming more than one household, and sharing essential facilities.

Even if there are only three tenants, comprising more than a single household, and also sharing essential facilities, the local council may still demand that the landlord of the property holds a licence issued by them.

Licensing of HMOs

The licensing of HMOs has become steadily tighter as their popularity amongst landlords has grown and their demand from tenants in search of affordable accommodation has soared.

The latest round of legislation with respect to HMOs – which came into force on the 1st of October 2018 – gave increased powers to local authorities with respect to licensing standards: 

  • health and safety standards must be maintained in any area determined by the local council – but with particular emphasis on the need for annual gas safety inspections, the installation of smoke alarms and CO2 detectors, and the submission of electrical safety certificates when requested;
  • the size of the HMO must be adequate for the number of people living there; 
  • minimum bedroom floor areas are also defined for any room used for sleeping by adults or children; and
  • a requirement that the licensed landlord is a fit and proper person for that role – namely, that he or she is free of criminal convictions and has not previously breached landlord legislation or codes of conduct. 

In its commentary on the new licensing regime, the Royal Institute of Chartered Surveyors (RICS) warns that landlords who let rooms in an HMO that fails to meet the necessary standards are likely to be in breach of their licence and may face prosecution or civil penalties.

Where room sizes in an HMO currently fail to meet the required minimum floor areas, landlords may be given 18 months in which to rectify the shortcoming.