HMO Licensing – How to avoid the potential landlord pitfalls

On 1 October, the government will tighten the regulations surrounding houses of multiple occupation (HMO) in a bid to improve the general standard of lettings in the UK. Many landlords have opted to skirt away from HMO’s over uncertainty, but being prepared for the changes will allow you to develop a flourishing HMO portfolio.

There’s no question that HMO’s are costly upfront projects, whether you’re buying the larger property outright or opting to convert several properties into one to accommodate a number of tenants. However once all the rooms are filled, the rental figures commonly drive greater returns on investment than a standard property. HMO’s aren’t going anywhere anytime soon and they certainly aren’t a subject in the property market to put to the back of the wardrobe.

The current set of regulations in place for HMO’s are set to be tightened this autumn, which will introduce a greater array of considerations to take in order to own or manage one. With a constantly growing portfolio of HMO’s across the North West already under our belt here at Abode, here are some of the things you need to know regarding the license changes.

The changes to the regulations in HMO’s firstly eliminates a major classification loophole, regarding how many storeys a property needs to be regarded as one.

Previously a property needed to consist of three storeys to be classified as a HMO, but the strengthening of the regulations in October will eliminate this classification, meaning two or even one storey properties will be able to be classified. This fact has already begun to off-put landlords, particularly those when it comes to student lets; a market where many properties of two storeys can see anywhere of up to five or six occupants under the same roof. The moral of this story then is regardless how many storeys your property may or may not have, it may now fall under the new regulations.

(If all this sounds a bit complicated, you might find our Greater Manchester HMO management service).

In addition to storey considerations, landlords will also have an obligation to adhere to rules regarding minimum room sizes.

Single rooms will be required to be a minimum of 6.51sqm and double-rooms a minimum of 10.22 sqm. An extra requirement has also been added for children under 10 years of age, with these rooms required to be at least 4.64 sqm. Therefore it’ll now pay off to double and even triple check the room measurements of any current existing property that you may have that has the potential to fall under the HMO remit, or to go over those conversion plans once again to ensure the correct specifications are met.

Should a room fail to meet these conditions, the local authority will be required to give the landlord a reasonable period of time to remedy the failure and during this period, they will not face any sanctions for a breach of the condition (unless the breach of condition was deliberate, in which case sanctions apply).

Another mandatory condition being put in place to landlords by the Government requires the licence holder to comply with their local authority scheme (if any) for the provision of facilities for the proper disposal and storage of domestic refuse. These directions will prescribe the numbers and use of receptacles for the storage and disposal of domestic waste generated from the HMO.

The Government will accept that the issue of rubbish collection is not within the direct control of the landlord, and as such there are no intentions that require landlords to perform functions which are the responsibility of the local waste authority. Securing the provision of waste disposal facilities and storage of refuse however is a responsibility under the new licensing.

Landlords of HMO’s still have over 3 months to prepare HMO’s to be compliant for the new licensing, and that is time that shouldn’t be wasted.

If you’re looking for more information on how to ensure you HMO is compliant before October 1st, or looking to invest in the HMO property market in the North West with expert advice and knowledge, then get in touch on 0161 883 2525 or visit our property management Greater Manchester page.

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