From 1 October 2018 new regulations came into force for HMO (houses in multiple occupation) licenses.
Under the old guidelines, you needed to apply for an HMO license if you rented out accommodation for 6 or more people over 3 floors.
From 1 October 2018, any landlord who lets a property to 5 or more people – from 2 or more separate households – must be licensed by their local housing authority.
This tightened wording also includes minimum room sizes as follows:
6.51m2 for one person over 10 years of age
10.22m2 for two persons over 10 years of age
4.64m2 for one child under the age of 10 years
Any room of less than 4.64m2 may not be used as sleeping accommodation, and landlords must inform their local authority of any room in the HMO which is under this size.
The changes are estimated to affect around 160,000 houses in multiple occupation nationwide. It will mean councils can take further action to crack down on the small minority of landlords renting out sub-standard and overcrowded homes.
Landlords will have to stop letting rooms that fall below the nationally prescribed standard. If they do not, then they will be in breach of licence condition and could be prosecuted by the local authority or alternatively receive a civil penalty under the new Housing and Planning Act 2016 provisions.
Landlords will also be required to adhere to council refuse schemes, to reduce problems with rubbish.
We welcome these changes to regulate unscrupulous landlords and improve living conditions. We envisage there will be a knock-on effect on the market. If capacity is reduced, there may be rent rises. For property investors / landlords, there may well be an impact on the value of their investment if their property now falls under HMO licensing requirements as a consequence of these changes.
As Chartered Surveyors, we get asked to value HMOs for prospective buyers/landlords. Part of our checklist includes ensuring the correct HMO planning and licence is in place. It can slow down the buying process and dramatically affect the value of the investment if the correct licence isn’t in place.
We also offer an inspection service for HMO properties. This confirms the property meets certain minimum standards such as size of rooms, regulation number of toilets, fire and safety regulations. This enables us to issue the landlord with an Independent Surveyors’ Certificate of Compliance which they use to apply for their HMO license. (The alternative to this is getting the local council to inspect the property which can be more costly as they tend to charge a set price per HMO property).
If you own or are thinking about investing in HMOs and require an HMO inspection, valuation or other advice on your property, please get in touch with Richard Huffer FRICS at our Head Office.