What is the criteria for HMO in the UK?

Nikka Sulton

What is the criteria for HMO in the UK?

If you’re pondering what to do with a buy-to-let property in Redbridge or Ilford, letting it as a house in multiple occupation (HMO) has its benefits. Rental yields are likely to be higher than with standard buy-to-let, and the risk of non-payment is reduced as each of your tenants pays for their room separately.

However, HMO requirements and rules are a little more complicated than the ones for standard buy-to-let, so it is essential to understand your responsibilities as an HMO landlord before deciding if it is the right option. For example, you may need to apply for an HMO licence, and there are additional requirements around fire safety. You may not have considered costs, such as council tax and insurance.

To help you navigate the complexities of landlord responsibilities for HMOs, we have compiled a guide to HMO requirements, detailing everything you need to know.

What Is An HMO?

An HMO, short for house in multiple occupation, is a type of property classification. It applies to a residence where a minimum of three tenants live together, forming more than one household, and share common toilet, bathroom, or kitchen facilities.

The term “household” refers to either a single person or individuals from the same family, including married couples or cohabitating partners.

HMOs come in various forms, offering a degree of diversity. While shared houses are the most common example, other property types falling under the HMO classification include hostels, lodgings, private residence halls, refuges, buildings with numerous bedsits and shared amenities, and employee accommodation. What unites them is the presence of multiple occupants within the same building, typically with shared facilities such as kitchens and bathrooms.

Pros And Cons Of HMOs

Pros of HMOs:

Increased Profit: Renting your property as an HMO often results in higher profits.
Income Continuity: Even if one tenant fails to pay rent, you may still have income from other tenants.
Easier Eviction: Evicting a tenant can be simpler, especially if you live on the property.

Cons of HMOs:

Tenant Turnover: Higher tenant turnover means spending more time finding new tenants.
Paperwork and Administration: More administrative tasks, such as obtaining an HMO license and planning permission, may be required.
Bills and Council Tax: HMO landlords are typically responsible for bills and council tax.

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:

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.

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.

Landlord responsibilities when managing an HMO

Landlords of HMOs must prioritize safety and compliance. Key aspects to manage include:

Gas safety – annual checks required.
Electrical safety – checks every five years.
Fire safety – install and maintain smoke and carbon monoxide alarms.
Provide rubbish disposal facilities.
Ensure functioning cooking, cleaning, and washing facilities.
Keep communal areas clear and clean.
Address overcrowding concerns.

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.

Duty to supply and maintain gas and electricity

Here are the manager’s responsibilities regarding gas safety, electrical installations, and utility supply:

Provide the latest Gas Safety Certificate within 7 days of receiving a written request from the local authority. This certificate should confirm the testing of gas appliances by a Gas Safe registered engineer.
Ensure that fixed electrical installations are inspected and tested by a qualified electrical engineer at intervals of no more than 5 years. Obtain a certificate from the engineer detailing the test results and provide this certificate to the local authority within 7 days of receiving a written request.
Avoid causing unreasonable interruptions to the gas or electricity supply.

HMO occupiers’ duties

Occupiers of the property have specific responsibilities, which include:

Avoiding actions that obstruct the manager from fulfilling their responsibilities.
Granting the manager access to units at reasonable times to carry out their duties.
Providing necessary information to the manager to support their responsibilities.
Taking reasonable precautions to prevent damage to items the manager is responsible for supplying, maintaining, or repairing.
Properly storing and disposing of litter according to the manager’s instructions.
Following reasonable instructions related to fire escape routes and fire safety measures.

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: