Changes to HMO Rules now Effective

From October 1 2018, new laws were implemented by the government with regards to House in Multiple Occupation (HMO) ownership. This removed the existing rule which required landlords to apply for a licence if their property had at least three storeys and five occupants that comprised of two or more family units.

The new law states that HMO landlords who own a property with at least three occupants from at least two different households using the same bathroom, toilet or kitchen, must have a licence to avoid being in breach of the law.

The type of licence you must apply for depends on the amount of separate households in the property, the number of people living there and how many storeys are in the building.

What is a separate household?

A single household is classed as being one of the following:

  • A family living together
  • A single person living alone
  • A couple in a relationship
  • A married couple

Regardless of the status, the above would need to be living in separate rooms within the same property and sharing the facilities to be classed as a separate household.

What type of licence should I apply for?

There are two HMO licences to choose from:

  • Mandatory: For properties that have at least three storeys with five unrelated people living in at least two separate households
  • Additional: Regardless of the number of storeys in the property, this is defined as housing at least three people who make up two or more households.

The rule changes also applied to minimum room size which are as follows:

  • One person over the age of 10: 6.51m2
  • Two people over the age of 10: 10.22m2
  • One child under the age of 10: 4.64m2

Any room in the property that is less than 4.64m2 cannot be used for sleeping. If you own a property with a room under this size your local authority must be informed.

Get in touch with your mortgage broker

If you used a mortgage broker to secure finance for your properties, and one (or more) of the properties in your portfolio are now classed as an HMO due to the rule changes, it is advisable to get in touch with them. This is to make sure you are still able to secure the right level of finance, as lending on your portfolio may be impacted as a result. An alternative option may be to seek a mortgage via a commercial mortgage lender.

Get in touch with us today and we can put you in touch with our partner mortgage company to discuss HMO financing.

Should you have any doubt about whether or not your property is classified as an HMO, it makes sense to apply for an HMO licence and to seek the support of a solicitor, should you run into any legal difficulties with your local authority.

Landlords who own a property that is currently licenced will not have to do anything, as they will be transferred over to the new scheme without any additional charge.

To find out more about HMOs and your responsibilities as a landlord, visit the gov.uk website .

At Regal Estates, our HMO consultation and management service has developed a strong reputation for helping landlords take care of their properties. Whether you are new to HMOs, or are unsure about where you stand with the new legislation, get in touch with our expert letting agents today.