HMO Conversions: 3 Facts that Every Landlord Should Know Before Investing

HMO, aka house in multiple occupancy is a concept in real estate that will only grow in popularity with time. Students in academic locations and young workers in the city are two of the most occupants found in multiple occupancy houses. Given the price of rent these days, it would be difficult to predict a scenario in the near future where this demand for multiple occupancy will come down.

Therefore, investing in HMOs is not just a good bet for now but it will continue to remain a profitable idea for at least some time to come. However, all these assertions are predicated on certain presuppositions on the landlord’s part. As to what those assumptions might be, let’s take a closer look.

There are Strict and Variable Requirements that HMO Properties Must Meet

In general, a local council will have requirements related to:

• Suitability of the property’s size in relation to the number of occupants.
• Structural stability and habitability of the property.
• Legal history of the landlord or property manager.
• Safety and living standard requirements related to gas lines, electrical lines, fire safety, etc.
• Anything else that the local council deems necessary.

This can get a little complicated because these strict requirements will vary quite a bit in terms of degree, depending on the local council’s set standards. If you have plans to turn an old building into an HMO or build a new one, consult with the HMO Architect to streamline and accelerate the whole process of meeting all the local building regulations for HMOs.

Licensing Needs for HMOs

There is a popular rumour that you will find on multiple sites online which states that having a license to own and operate an HMO is now made mandatory by the UK government. That is a rumour, and it should be taken as such. There are widely different laws surrounding HMO licensing requirements in the UK, but the following facts have been confirmed officially:

• Only the local council of the property’s location can confirm whether you need an HMO license or not.
• Contacting the local council to check for licensing requirements is mandatory in England and Wales.
• The rules are different in Scotland and Northern Ireland.
• If the property in question qualifies as a large HMO, then getting a license is mandatory in England and Wales.
• If needed, every different HMO owned by a landlord will require a separate HMO license from the local council.
• All HMO licenses in the UK have a maximum lifetime of five years and they must be renewed prior to lapsation.

HMO and Large HMO

A regular house in multiple occupancy or HMO follows the standards as stated next:

• It has at least three but less than five occupants who are not related by family and do not belong to one household.
• The bathroom, kitchen, and other household facilities are shared by all occupants.

There is just one major difference that separates regular HMOs from large HMOs, which is the fact that they will have at least five or more occupants living in the house and sharing amenities. If that is applicable for your property, then licensing is mandatory, and the requirements will be stricter.