HMO housing is always in demand, and can often produce higher revenues than other sorts of rented accommodation. However, managing an HMO can also involve more day-to-day work, greater responsibilities and higher risk levels.
In this article, we'll provide clear, simple, factual answers to the most frequently asked HMO questions. So here is your complete landlord's guide to owning, renting, running, licensing, converting and insuring HMOs.
If you own and rent out residential property, you need to know the rules around houses in multiple occupation:
- What is an HMO?
- Do I need an HMO licence and how can I get one?
- What are the HMO rules?
- HMO planning permission and Article 4
- What kind of insurance is needed for HMOs?
What is an HMO?
HMO stands for house in multiple occupation or house of multiple occupancy. It is defined by the government website, GOV.UK, as "a property rented out by at least three people who are not part of one household (for example a family) but share facilities like the bathroom and kitchen. It's sometimes called a house share." Typical examples are student housing, hostels and residential care homes.
Until 2018, a property had to be at least three storeys high to qualify as an HMO, but this is no longer the case.
There is also a separate category: large HMOs. They differ in the following ways:
- Rented to five or more people who form more than one household
- Some or all tenants share toilet, bathroom or kitchen facilities
- At least one tenant pays rent (or their employer pays it for them)
In Scotland, the definition is slightly but significantly different. A property is considered an HMO north of the border when it is shared by three unrelated tenants who share a kitchen, bathroom or toilet.
Do I need an HMO licence?
Licences are mandatory across all English and Welsh local authorities for large HMOs (with five or more residents). Licensing rules for smaller HMOs vary from place to place, so the only sure way to check if you need a licence is to contact the local authority.
HMO landlord's responsibilities
Many HMO responsibilities apply to all landlords. For example, as an HMO landlord you must carry out timely repairs, maintain the property and protect the deposits of the tenants in a government-approved scheme.
There are also some responsibilities that apply only to HMOs. The council can refuse your application for an HMO licence or revoke an existing licence if you fail to meet these conditions.
The HMO landlord responsibilities listed here apply in England and Wales only. They are different for properties in Scotland and Northern Ireland. As landlord of an HMO, your responsibilities include:
- Complying with the Fitness for Human Habitation Act. This covers issues such as damp, overcrowding and ventilation.
- Having suitable smoke and fire alarm systems in place, in line with relevant fire safety standards and also the required fire exits and fire safety doors.
- Completing a fire risk assessment.
- Supplying fire extinguishers and fire blankets in communal areas such as kitchens.
- Arranging regular gas and electrical safety checks.
- Providing a clean water supply and drainage, plus undertaking a legionella risk assessment.
- Providing waste disposal facilities and ensuring there are regular bin collections
- Ensuring that rooms are not shared unless the individuals concerned are a couple, or have consented to share.
- Making sure all bedrooms have access to natural light and ventilation.
- Ensuring that tenants are not exposed to asbestos, carbon monoxide or radiation.
- Providing contact details for the landlord or building manager in the communal areas
- Providing furniture that is clean and fit for purpose.
HMO requirements for minimum room sizes
There are minimum room dimensions for HMO tenants. Each bedroom must measure at least 6.5 square metres for one person and 10.2 square metres for two people.
In HMOs housing up to five residents, the kitchen must be at least seven square metres and there must be an additional living/dining room of at least 11 square metres.
Converting a property into an HMO? Check if you need planning permission
Converting a larger house into an HMO can be a sound investment, bringing in higher rent income and being easier to let and keep occupied. However, it is not a straightforward process. To begin with, you will need a Housing Health and Safety Risk Assessment.
An Article 4 Direction means that many local authorities also require you to apply for planning permission before converting your property into an HMO, even though the changes to the structure would not normally involve planning permission.
Once again, the only way to discover whether your conversion needs planning permission is to contact the local authority. They will also detail any changes you need to make for the comfort and safety of the tenants, such as adding bathrooms, increasing room sizes or modifying garages, cellars and loft spaces.
Do you need specialist HMO insurance?
If your local authority has deemed your property to be a house in multiple occupation, you will certainly need specialist HMO insurance cover. A standard landlord policy won't provide the level of cover required to protect your assets and secure your income if something goes wrong.
At Bollington, we are one of the UK's leading brokers for this type of cover. Our HMO Landlord Insurance can be tailored precisely to your needs. Trust our expert advisors to find a cost-effective policy that will:
- Reflect the nature of your specific HMO licence and type of property.
- Include all the different kinds of cover you need, including building, contents, public liability and loss of rent.
What if you wish to insure several HMOs or a mix of HMO and non-HMO properties? Or what about adding or removing properties once the policy is in place? None of this need be a problem. Simply contact the Bollington team and you take insurance off your "to do" list.