New rules for HMO landlords in 2018

Tens of thousands of landlords may have to apply for a licence to rent out their property as a ‘house in multiple occupation’ (HMO) once new government rules are introduced on October 1.

At the moment, a licence is usually only required if a property has three or more storeys and is occupied by five or more people from at least two households. From the beginning of next month, however, this will be extended to all homes that are occupied by five or more people from two or more households, regardless of how many storeys the property has. The new rules are being introduced as part of a government crackdown on “rogue landlords who exploit their vulnerable tenants, and in some cases the public purse through housing benefit, by renting sub-standard, overcrowded and dangerous accommodation.”

Some local authorities already require all landlords to have a licence, regardless of whether or not their properties are HMOs.

According to the Residential Landlords Association, October’s changes could mean as many as 177,000 further landlords will need to apply for a licence to rent out their homes.

What the changes mean for landlords

Licences can be obtained from local councils, but before they can be issued, landlords must prove that they are ‘fit and proper’ and that their properties conform to current safety standards. They must also meet new minimum room sizes, which will also come into effect from October 1. For example, any room in an HMO with a floor area of less than 4.64 square metres cannot be used as sleeping accommodation.

Licences run for a maximum of five years, and a separate licence must be obtained for each property owned.

Mortgage options are available for HMO properties, but they are more specialised and choice is therefore limited. For more information, speak to a broker who will be able to take you through all the available options and recommend the best deal to suit your individual circumstances.