Published: 08/05/2017

What is HMO and Private Landlord Licensing?

House In Multiple Occupation, is a license issued by the local authority that a landlord needs to rent out their property if that property comes under their criteria.

Councils across the UK have their own requirements as to what type of property needs a license.

For example you may have a studio flat in Hammersmith that requires a license (selective) and a three bedroom flat in Wandsworth which does not (The borough has yet to introduce licensing other than HMOs). Confused, understandably.  

The local council will determine if a license is needed, but in all cases if it is rented out to 5 unrelated parties (.e.g. students / professionals) you will need a HMO license.

Portfolio landlords (of which we have many) find this particularly frustrating as it changes from borough to borough and affects their investments.

Licenses typically last for 5 years and can cost roughly from £800 - £2000. Along with the cost of the license are the works needed to obtain the license so it can really be costly.

An HMO (House in Multiple Occupation) is a property that is shared by three or more tenants who are not members of the same family but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’. Depending on the exact type of HMO some landlords may require a selective licence from the council or Local Authority.

Why are HMOs subject to regulations?

All HMOs, whether the landlord needs a license or not, are subject to Management Regulations and Inspections under the Housing Health and Safety Rating System (HHSRS). This is to ensure that the property is managed correctly and satisfies certain safety standards.

What types of properties are classified as HMOs?

Below lists types of accommodation that are all likely to be classified as HMOs:

• Bedsits
• Shared flats and houses
• Boarding houses
• Hostels
• Halls of residence for students or nurses
• Hotels or bed and breakfasts with permanent residents.

What is a large HMO?

You must have a licence if you’re renting out a large HMO, which is defined by the following:

• It’s rented to 5 or more people who form more than 1 household i.e. not a family.
• Tenants share a toilet, bathroom or kitchen facilities.

What are the differences in licenses for HMOs?

Where selective licensing applies, unlike the other forms of licensing which relate to HMOs, then normally all houses within the private rented sector for that area must be licensed, except where they require to be licensed as HMOs.

Non licensable HMOs must be licensed under Selective Licensing.  “House” means a building or part of a building consisting of one or more dwellings.  For those purposes “dwelling” means a building or part of a building occupied or intended to be occupied as a separate dwelling.

The selective licence can be valid for up to three years, and thereafter will have to be renewed. A tenancy or licence is exempt from the selective licensing if it is granted by a registered social landlord.

What areas are subject to HMO licensing?

A local authority may designate the whole of their district or part of their district (local wards), subject to selective licensing. An area may be designated for selective licensing either (a) if the area is (or is likely to be) an area of low housing demand or (b) the area is experiencing a significant and persistent problem caused by anti-social behaviour and some or all of the private sector landlords are failing to take action to combat the problem.  A designation can last up to five years and can be renewed or even extended.
 

What properties do not require an HMO license?

The following types of property tenancies or property rental licenses are exempt:

• Business tenancies
• Holiday lets
• A prohibition order is in force
• Licensed premises (for liquor licensing purposes)
• Agricultural tenancies
• The property is managed/controlled by a local housing authority or public body
• The building is regulated under other legislation (e.g. care homes)
• The building is occupied by students controlled/managed by a University/College (who
subscribe to an Approved Code of Practice)
 

Please note; the above is not an exhaustive list of exemption types.

Councils that currently run private landlord licensing schemes:
HMO Licensing came into force with the London Borough of Ealing on the 1st January 2017.
The London Borough of Hammersmith & Fulham adopted HMO licensing in June 2017.

Willmotts are perfectly placed to advise on what is sought from Landlords in this respect, so to avail yourself of our in depth knowledge of this subject please contact:

Always consult a qualified professional before making major changes to your life & property.

If you would like to discuss buy-to-lets or any other residential issues please do not hesitate to call Willmotts for help with all your property needs, 020 8222 9958  info@willmotts.com

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