HMOs have received a lot of attention in the past couple of years. With rental markets becoming more competitive, many landlords are looking towards an HMO renting route. They are reducing rates but increasing the number of available paying tenants by adding rooms to their properties. But what exactly is an HMO? How does it work? Read on and find out.
What is an HMO?
An HMO is a House in Multiple Occupation. The building doesn’t have to be a house, it can be a flat, or any other property type. It is a technical term to signify that people of multiple households (i.e.: not a single family unit) are living in the same building.
What does HMO mean in property terms?
In property terms, the key element that makes a home an HMO is that 3 or more tenants of different households live there as their main residence, with at least one person paying rent to a landlord. Typically, all occupants will have their own bedroom, but will share common areas – living room, kitchen, bathroom, etc.
Also, to qualify as an HMO, the property must be used solely for residential purposes.
How many rooms make an HMO?
It’s not the number of rooms in a property that determine whether it’s an HMO. The definition is based on how many people live in the property, and whether or not they are in multiple households and share facilities.
Why are homes classified as HMOs?
HMO classification was introduced to stop landlords from maintaining properties in poor condition when maximising the number of occupants to help boost their rental yield. The system of HMO licensing ensures that people living in such buildings have safe, secure and hygienic living conditions.
Do all HMOs need an HMO license?
Not all HMOs need an HMO license. The rules can be complex since there are mandatory HMO licensing rules, as well as additional rules made at the discretion of local councils.
If you’re not sure whether you need an HMO license or not, contact your local council for guidance.
What kinds of HMO licenses are there?
There are three kinds of HMO licenses:
Mandatory licensing: This applies to all HMOs occupied by five or more people who make up at least two households. In this case, there are minimum room sizes, fire safety measures and other safety/hygiene standards that must be met.Additional licensing: These are added rules made by local councils to combat bad faith rental practices. The exact rules and standards depend on the specific council.Selective license: This is another local council measure that can be applied to any kind of property, even those not typically meeting HMO requirements. Councils use this rule to smarten up specific streets or areas that have generated a lot of complaints about poor landlord management.
Is it illegal to rent without a HMO licence?
It is illegal to rent to multiple occupants without an HMO license if your property falls under the HMO licensing requirements. If convicted for this offence, the offender can face unlimited fines.
Typically, however, landlords will have to repay any rent paid by their tenants within the past 12 months. They may also face a nominal fine, with heavier penalties for landlords who are repeat offenders.
Can a landlord live in a HMO?
It is entirely legal for a landlord to live within an HMO. While most HMOs in the UK are flatshares with the landlord living elsewhere, it’s perfectly possible for them to live there too.
Who stays in a HMO?
The most common type of HMO residents are students, low-income households and those who are unemployed. Seasonal workers and those undertaking professional training are also common HMO residents.
What rights do HMO tenants have?
HMO tenants enjoy exactly the same rights as any other tenant in the UK. You cannot be evicted from your home without the landlord going through the necessary legal channels and having due cause.
HMO tenants also have the right to live in a home that follows all the HMO requirements set by mandatory licensing and any additional/selective licensing set by the local council. If the landlord does not keep the property up to the standards set by these guidelines, then they can have their license revoked by the council and may have to repay all rent received in the past 12 months.
Hopefully, this FAQ guide will provide the answers to any questions you may have about HMOs. For more guidance about the UK rental market and renting trends in general, check out some of our other FAQs below.
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