Letting a property to a group of unrelated tenants can be more profitable than a single family let, but it comes with extra rules. Many such homes count as houses in multiple occupation, and getting the licensing wrong can land a landlord with a heavy fine.
What counts as an HMO
Broadly, a house in multiple occupation is a property rented to three or more people who are not one household and who share facilities such as a kitchen or bathroom. Think of a house let room by room to several professionals or students. The arrangement, not the building, is what defines it.
When a licence is required
A mandatory licence is needed for larger HMOs, generally those housing five or more people forming more than one household. On top of that, individual councils can introduce additional or selective licensing covering smaller properties in their area. Because the rules vary locally, the first call any prospective HMO landlord should make is to the council.
- Room sizes minimum floor areas for sleeping rooms
- Fire safety alarms, fire doors and clear escape routes
- Amenities enough kitchens and bathrooms for the number of tenants
The standards you must meet
Licensed HMOs must satisfy stricter safety and space standards than an ordinary let. That means proper fire precautions, adequate shared facilities, and a manager deemed fit and proper to hold the licence. Inspections are common, and falling short can mean improvement notices or prosecution.
Worth the effort?
For landlords willing to manage the extra responsibility, an HMO can deliver a stronger yield than a standard tenancy, because several rents add up to more than one. But the management is more intensive and the compliance more demanding. Go in with open eyes, factor in the cost of meeting the standards, and the model can pay off.