What are the requirements for a HMO UK?

Nikka Sulton

What are the requirements for a HMO UK?

What are the requirements for a HMO UK? If you’re considering what to do with a buy-to-let property in Redbridge or Ilford, exploring the option of letting it as a House in Multiple Occupation (HMO) can be advantageous. HMOs typically offer higher rental yields than standard buy-to-let properties, and the risk of non-payment is minimized since each tenant is responsible for their own room’s rent.

Nevertheless, it’s important to note that HMO requirements and regulations are more intricate than those for standard buy-to-let properties. Understanding your responsibilities as an HMO landlord is crucial before making a decision. This may include obtaining an HMO license and complying with additional rules regarding fire safety. Additionally, you should consider potential expenses like council tax and insurance.

To help you navigate the intricacies of landlord responsibilities for HMOs, we’ve put together a comprehensive guide to HMO requirements, covering everything you need to be aware of.

What is an HMO property?

HMOs, or Houses in Multiple Occupations, come in various forms. They encompass more than just shared houses; other examples include hostels, lodgings, private residence halls, refuges, buildings with multiple bedsits, and some shared facilities, as well as employee accommodations. In essence, they all share the characteristics of numerous individuals residing in the same building, often with shared amenities like kitchens and bathrooms.

Pros And Cons Of HMOs

When deciding whether to rent out your property as an HMO or opt for a standard buy-to-let, it’s essential to consider the pros and cons for HMO landlords:

Pros of HMOs

Typically, you’ll generate higher profits by renting your property as an HMO.
Even if one tenant fails to pay their rent, you may still have income from others.
Evicting a tenant is often more straightforward, especially if you reside in the property.

Cons of HMOs

HMOs often experience higher tenant turnover, which means more time spent on tenant search.
There may be increased paperwork and administrative tasks, such as acquiring an HMO license and planning permissions.
HMO landlords are usually responsible for covering bills and council tax.

HMO features

To be officially categorized as an HMO, a property must meet four specific criteria:

Occupants must come from different households.
Occupants must use the property as their primary or sole residence.
The accommodation should be exclusively for habitation.
At least one occupant is paying rent.

These criteria can also apply to individual flats. However, different standards may come into play when dealing with entire converted blocks. Unless a local authority has officially designated a property as an HMO, all the above requirements must be satisfied for it to be legally classified as one.

HMO Licensing

After the enactment of the Housing Act 2004, local authority licensing requirements were introduced for certain HMOs in England and Wales. These licensing provisions come in two types:

1. Mandatory Licences

A mandatory license is required if your property:
Accommodates five or more individuals from two or more households.
Features shared amenities like a kitchen, bathroom, or toilet.

2. Additional Licences

Local authorities introduce these licenses, which may apply to their entire council area or specific parts of it. In the London Borough of Redbridge, all HMOs are mandated to have an additional license.

HMO Rules And Requirements

If you’re currently a landlord managing buy-to-let properties, the typical landlord responsibilities you’re accustomed to remain relevant. However, being an HMO landlord entails additional obligations.

HMO Minimum Room Sizes:

One such aspect involves adhering to specific requirements for minimum room sizes within a house of multiple occupancy:

A minimum of 6.51 square meters for an individual aged 10 or over.
At least 10.22 square meters for accommodation for two individuals aged 10 or over.
A minimum of 4.64 square meters for a child under 10 years old.

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.