Date Published 02 August 2023
Landlords: Ever thought of converting your property into an HMO?
The rising cost of living is impacting everyone, including landlords, despite the recent surge in rent prices in the UK. To maximise revenue from their property portfolios, landlords can explore converting their single let properties into HMOs (Houses in Multiple Occupation).
HMOs, also known as "house shares," are typically large houses where three or more unrelated individuals live in separate bedrooms while sharing common amenities like the kitchen and laundry. Large HMOs, housing five or more people from different households, require a license from the government. However, in some local authority areas, even HMOs with just three tenants need a license. Council licenses are valid for up to five years but landlords must check whether their local council makes licensing compulsory.
To obtain an HMO license, landlords need to ensure that the property meets certain criteria:
1. The property must be suitable for the number of occupants.
2. The landlord or agent acting as the house manager must be considered a "fit and proper person."
3. Annual gas safety checks are mandatory, with certificates provided to the local authority.
4. Smoke and carbon monoxide alarms must be installed and regularly maintained.
5. Electrical safety certificates for all appliances need to be available upon request.
Additional regulations concern living space for tenants, specifying minimum room sizes based on the number of occupants and their ages.
Converting a property into an HMO requires careful planning and adherence to safety regulations. Landlords can consider various options to add living space, such as extensions, en-suites, loft conversions, communal dining areas, or using a garage for additional living space. Some measures may require planning permission, and landlords should seek professional advice from HMO agents or specialists to ensure the conversion meets all requirements.
In terms of safety, landlords must also comply with annual Gas Safe checks, provide an Electrical Installation Condition Report, and obtain test certificates for all appliances. Additionally, all furniture and furnishings must be labeled to demonstrate compliance with fire resistance regulations. Fire doors may need to be installed, and tenants must not obstruct fire exits. Emergency lighting could be considered, depending on local authority requirements.
Despite the potential for higher yields, landlords should be aware of the increased regulatory compliance and potential challenges in finding suitable tenants. Insurance premiums for HMOs are typically higher as well. However, some experts suggest that HMOs are more resilient to economic fluctuations, as there is a consistent demand for this type of accommodation even during economic downturns.
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Meta tags: HMOs, Houses, Conversions, Landlords, Cosy Resi
Meta description: Learn how to convert your property into an HMO with this step-by-step guide for landlords. Discover the regulations, safety requirements, and potential benefits of HMO conversions.
