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HMO Property: A Quick Guide

Investing in student HMO property can often seem daunting and complicated – it really doesn’t have to be. Here are some answers to common questions we are regularly asked.

What defines an HMO?

HMO stands for House in Multiple Occupation meaning three or more people from different households are living together with shared communal areas. Typically, 65% of all university students move from first year halls into HMOs and therefore, HMOs form the largest portion of the student accommodation market.

Do all HMOs need licenses?

The mandatory government scheme states that HMOs with 5 or more tenants require licences which is what most local authorities adhere to. However some councils operate a selective scheme where they make requirements in excess of the mandatory scheme whereby they may require licenses for as few as two tenants. Licenses are granted to HMO landlords so after acquiring a licensable HMO, new landlords need to re-apply and obtain the license in their name.

Can I convert any house into an HMO?

In a word, no! The creation of new HMOs is all but prohibited in the best student areas by planning restrictions under what’s called the Article 4 Direction.

What’s Article 4?

The government introduced the Article 4 direction in 2010 which gave local councils the power to insist that planning permission had to be granted before residential houses could be converted to HMOs. Most councils around the UK have now adopted Article 4 in order to restrict the creation of new HMOs, so it’s critical to ensure a HMO is article 4 compliant before purchasing it or it will not be able to be let out.

What’s a Lawful Development Certificate and do I need one?

A Lawful Development Certificate (LDC) or Certificate of Lawfulness for Existing Use or Development (CLEUD) is a council issued document stating categorically that a HMO is article 4 compliant. It isn’t compulsory to have one, however when a HMO is sold, buyers’ lenders and solicitors often insist that one is obtained by the seller at their own cost.

What are the minimum HMO requirements?

HMOs need to adhere to health and safety regulations. These include:

  • Annual gas safety checks
  • Electricity safety checks every 5 years (EICR)
  • Regularly check gas and carbon monoxide detectors
  • Rooms need to be to a minimum size (6.51m2)

Failure to comply with these regulations can result in a landlord being deemed unfit to manage the property.

Do you pay council tax on HMOs?

Students are exempt from paying council tax so no, student HMO landlords don’t pay council tax.

What are the minimum amenities and room sizes in HMOs?

Whilst minimum requirements for HMOs range between local councils, below are the general measurements for rooms. It’s always best to check with your local council.

Minimum Room Sizes

Room Up to 5 tenants (m2) 6 – 10 tenants
(m2)
Bedroom

(where there isn’t a living room)
6.52

10
6.52

10
Kitchen 7 7 + 3 per additional tenant
Dining Kitchen 11.5 16.5
Living Rooms & Dining Rooms 11.5 16.5

 

Minimum Amenities

Up to 4 tenants Up to 5 tenants 6-8 tenants 9-10 tenants

1 bathroom
1 bathroom & separate WC 2 bathrooms, 2 wash hand basins & 2 WCs 2 bathrooms, 3 wash hand basins &  2 WCs

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