Since 1st October 2018, new legislation is in effect in England and Wales that affects HMO (House of Multiple Occupancy) landlords.
To prevent overcrowding, minimum standards now apply to the size of bedrooms in HMOs.
Double bedrooms must be at least 10.22m2 in area.
Single bedrooms must be at least 6.51m2 in area.
For children under the age of 10, a single bedroom must be at least 4.64m2 in area.
Rooms smaller than 4.64m2 must not be used as sleeping accommodation.
You may therefore need to change the furniture provided if your property is furnished, and change the way you advertise the property.
Changes to the definition of an HMO
This new legislation also changed the definition of an HMO for licensing purposes, and means many more landlords will need HMO licences.
HMO licences are designed to ensure landlords are providing homes that meet acceptable standards. And they also mean the local authority can more closely monitor the number of HMOs in their area, to assess local housing and transport needs.
Previously, a licence was only mandatory if your HMO was occupied by five or more people, from two or more family units, and was spread over three or more storeys.
Now, you need a licence for any such household, no matter how many storeys it has. (HMO licensing rules are different in Scotland.)
Purpose-built flats, conversions, bungalows and large two-storey homes all meet the new definition, and it’s estimated that the number of properties requiring a licence has almost quadrupled. Student and graduate houseshares are now particularly likely to require an HMO licence.
If you’re affected, you need to apply to your local authority for a licence. Click here and input your property’s postcode to find contact details for the local authority in question.
Licences are not free, and your local council can tell you what one costs (they vary from council to council). Every HMO needs its own licence.
HMO licences need renewing every five years, and you could be subjected to an unlimited fine for renting out an unlicensed HMO. If you already have any HMO licences in place, they’ll remain valid until their existing renewal date.
Why do people sell their HMOs?
“Why are they selling their HMO if it cash flows so well?” We get asked this a lot by potential investors (usually first time investors). Answer usually goes something like this; Landlords sell for all types of reasons but usually one of the following: • Fall out with business partner • Divorce • Change of strategy (moving into development common) • “I prefer BTLs” • Can’t make the HMO work (means too tired and worn out as a self-managing landlord or has chosen a crap managing agent) • Need money for other ventures • Retirement • Made money on the refurb and now selling for a yield price to make a profit (flip) • Was overpromised a ‘commercial valuation’ by the sourcer who sold it to them pre-refurb • Had a ‘good stint’ as an HMO landlord, build a good portfolio and now it’s time to sell Like anything, the above reasons are 50% positive and 50% negative so it’s about mitigating your risks and making sure that your exit is on YOUR TERMS and not forced upon you if and when you do s...
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