How to get HMO in UK

Nikka Sulton

How to get HMO in UK

How to get HMO in UK? If you’re wondering about the prospects of turning your buy-to-let property in Redbridge or Ilford into a house in multiple occupation (HMO), it comes with its advantages. HMOs typically offer higher rental yields and reduced non-payment risks due to individual room payments by tenants.

Nevertheless, it’s crucial to recognize that HMO regulations are more intricate compared to standard buy-to-let arrangements. You’ll likely need to secure an HMO license, and there are added considerations regarding fire safety. Expenses such as council tax and insurance may not have been on your radar.

To simplify the intricacies of your responsibilities as an HMO landlord, we’ve put together a comprehensive guide outlining HMO requirements, providing you with the necessary insights.

What Is An HMO?

HMO, short for house in multiple occupation, is a property classification. An HMO property typically has at least three tenants living in it, forming more than one household, and sharing toilet, bathroom, or kitchen facilities.

A household in this context refers to a single person or members of the same family, including those who are married or cohabiting.

Houses in multiple occupation

Your property is considered a house in multiple occupation (HMO) if it meets these criteria:

At least 3 tenants live there, forming more than 1 household.
Tenants share toilet, bathroom, or kitchen facilities.

If your property has the following characteristics, it is a large HMO:

At least 5 tenants live there, forming more than 1 household.
Tenants share toilet, bathroom, or kitchen facilities.

A household can consist of a single person or members of the same family who reside together. This includes married couples, those in same-sex relationships, relatives, half-relatives, such as grandparents, aunts, uncles, and siblings, as well as step-parents and step-children.

HMO Licensing

Following the Housing Act 2004, local authority licensing was introduced for certain HMOs in England and Wales. There are two main types of HMO licenses:

1. Mandatory Licences:

Required for properties that accommodate five or more individuals from two or more households.
Properties with shared amenities like kitchens, bathrooms, or toilets fall under this category.

2. Additional Licences:

Local authorities have the authority to introduce these licenses, which can apply to either the entire council area or specific parts.
In the London Borough of Redbridge, all HMOs are required to have an additional license.

When Does a Property Require an HMO Licence?

To determine if an HMO license is needed for your property, consider the following checklist:

The property accommodates five or more tenants from two or more unrelated households.

Tenants share facilities like a kitchen or bathroom.

Keep in mind new licence conditions, specifying minimum bedroom sizes:

At least 4.64m2 for a child under ten.

At least 6.51m2 for a single person over ten.

At least 10.22m2 for two people sharing.

Ensure the property has these safety certificates:

GSC Gas Safety Certificate.

EPC Energy Performance Certificate.

At least one smoke alarm on each habitable floor.

Carbon monoxide detectors in rooms with solid fuel-burning appliances.

HMO management regulations

1. Duty to provide information to occupier

The manager’s responsibilities include:

Providing their name, address, and contact number(s) to each household in the HMO.
Clearly displaying this information in a prominent location within the HMO.

2. Duty to take safety measures

Here are the manager’s responsibilities regarding fire safety in the HMO:

Keep all fire escape routes clear and well-maintained.
Ensure fire-fighting equipment and alarms are in good working order.
Display fire escape notices in visible locations for occupants.
Take reasonable measures to protect occupants from harm based on design, structure, and occupancy:

Secure unsafe roofs or balconies.
Install bars or safeguards on windows with low sills.

3. Duty to maintain water supply and drainage

Here are the manager’s responsibilities regarding water supply and drainage in the HMO:

Maintain the water supply and drainage in good, clean, and working condition. This includes:

Keeping water storage tanks and cisterns clean and functional with proper covers.
Protecting water fittings from frost damage.

Avoid unreasonable interruptions to the water supply or drainage.

HMO fines and do you need an HMO licence?

To rent out your property as an HMO in England or Wales, contact your council to determine if a licence is required. Generally, large HMOs need licences unless they qualify for an exemption. Licences are valid for up to 5 years and must be renewed. Each HMO you own requires a separate licence.

You must have a licence for large HMOs if:

It’s rented to 5 or more people from different households.
Some or all tenants share bathroom, toilet, or kitchen facilities.
At least 1 tenant pays rent.

Ensure HMO compliance, including preventing overcrowding and providing adequate facilities. You’re responsible for communal area repairs.

Penalties vary by council and may include:

Prosecution with unlimited fines.
Rent repayment orders, allowing tenants to reclaim up to 12 months’ rent.
Management orders, enabling the council to take over HMO management.

HMO Amenities

To comply with regulations, your HMO must adhere to set standards related to amenities like heating, washing facilities, kitchens, and bathrooms. For instance, the kitchen should be appropriately sized based on the number of tenants. Additionally, there are requirements for bathroom facilities, which include having functional locks and accessible shared bathrooms and WCs from common areas. You can find more details about amenity standards in Redbridge on their official website.

HMO Fire Safety Regulations

Houses of multiple occupation are considered to pose a greater fire risk compared to single-let properties. Therefore, there are stringent fire safety regulations in place to safeguard the well-being of tenants. The specific fire safety measures required vary based on the number of occupants and the presence of any vulnerable tenants. These measures encompass essentials such as functional smoke detectors, fire doors, and a fire blanket in the kitchen. It is advisable to conduct a Fire Risk Assessment, even if it’s not obligatory according to local regulations, as it’s considered a best practice.

HMO Electrical Safety Regulations

HMO landlords are required to secure an Electrical Installation Condition Report (EICR) conducted by a certified electrician. This report should assess the safety and fire risks associated with electrical installations and must be done at least every five years. The landlord needs to furnish proof of these electrical safety checks to acquire an HMO license.

HMO Gas Safety Regulations

To adhere to the Gas Safety Regulations 1998, an annual Gas Safety Check must be conducted by a Gas Safe Registered Engineer. This inspection covers gas appliances, pipework, and flues. Local authorities commonly require the current Gas Safety Certificate before granting an HMO license.

HMO Tenancy Agreements

In most HMOs, tenants typically have assured shorthold tenancies (AST). This can either be one AST for the entire group, with all tenants signing it, or individual room ASTs.

If you reside at the property, you might have an Excluded Tenancy Agreement, often referred to as a Lodger’s Agreement. Under this agreement, you don’t require a court order to evict a tenant, but you should provide a reasonable four-week notice.

HMO Planning Permission

Converting a family home (C3 dwelling) into an HMO (C4) typically doesn’t require planning permission, unless there will be six or more occupants. However, if your HMO falls into the ‘Sui Generis’ category with six or more occupants, you’ll need to obtain planning permission from your local authority. It’s always a good idea to double-check the specific requirements with your local authority.

HMO Council Tax and Utility Bills

HMO landlords renting out individual rooms are typically responsible for paying council tax. However, if you let the entire property to a group, they will share the council tax responsibility, unless they are exempt, such as in the case of students.

The same principle applies to utilities. If you rent the property on a room-by-room basis, covering the utility bills and including the cost in the rent is usually a more straightforward approach.

HMO Insurance

Specialist insurance options are tailored for HMO landlords. While not obligatory, you should have coverage for both building and contents, and it’s wise to contemplate public liability insurance as well.

Managing an HMO on your own might require additional administration and research, but it’s a manageable task. To simplify matters, consider engaging a letting agent with expertise in HMOs.