Houses in Multiple Occupation

Many people buy property with a view to letting it out for the purposes of investment.

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Many people buy property with a view to letting it out for the purposes of investment. It is hoped that the rental income will pay off any mortgage over time, thus leaving the owner with income once the mortgage is cleared. Many properties will be let to a number of people who are not part of the same family unit. Examples would be bedsits, shared house or student flats. In this case, the property is likely to be a House in Multiple Occupation (HMO) meaning that the house might need a Council licence. 

The basic rules are as follows:

A property is an HMO if both of the following apply:

  • at least 3 tenants live there, forming more than one household
  • they share toilet, bathroom or kitchen facilities with other tenants

A property is a large HMO if both of the following apply:

  • at least 5 tenants live there, forming more than one household
  • they share toilet, bathroom or kitchen facilities with other tenants

A household is either a single person or members of the same family who live together. A family includes people who are:

  • married or living together - including people in same-sex relationships
  • relatives or half-relatives, for example grandparents, aunts, uncles, siblings
  • step-parents and step-children

A property does not necessarily need an HMO just because it falls within the definition. A mandatory HMO licence is required for larger properties which:

  • comprise three or more storeys
  • are occupied by five or more persons; and
  • are occupied by persons living in more than one household

Local authorities can impose additional HMO licensing on other types of HMO and there are exemptions which can apply.

It is important for any buyer of an HMO to obtain specialist advice to ensure that all appropriate consents are obtained.

To discuss this or any other property matter, contact us.

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