Can I turn my house into an HMO? | What you need to know

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Can I turn my house into an HMO?

Can I turn my house into an HMO?
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    In short, the answer is yes, you can turn your house into one of multiple occupations without getting planning permission, but let’s delve into some of the rules surrounding converting your property to an hmo.

    If your property is let to multiple tenants (3+) from separate households and some basic amenities are shared, then your property will potentially need an HMO licence from your local authority before you can start on any HMO conversion work.

    What types of HMOs (houses of multiple occupancies) are there?

    There are three main types of hmo property:

    • Shared houses HMOs – the whole property is let to a shared group of renters who have their own bedroom but share communal areas such as the kitchen and living room.
    • Bed-sit type HMOs – separate non-self-contained bedsit lettings where the occupants have separate tenancies and don’t share a close bond.
    • Section 257 HMOs – self-contained units within a converted property which have their own kitchen, bathroom and WC facilities within the unit for the sole use of the occupants, but the building does not comply with Building Regulations 1991 and less than two-thirds of the self-contained units are owner-occupied.

    More details on the different types of HMO property can be found on the government website.

    Planning permission

    Currently (as of March 2024), you do not require planning permission to turn your property into an HMO. HMO conversion plans generally come under permitted development rights, but you should check with your local planning authority because this is not the case in some areas of the country.

    If the property falls within an Article 4 area, then planning permission may be needed.

    An HMO property can be a great way to increase rental income from your house. If the property consists of 7 or more unrelated tenants who share facilities, then Sui Generis planning may be required. Planning permission and licencing are two different things, so you must always seek advice on both separately.

    Does your current property qualify as a house in multiple occupations?

    The HMO rules state that your property is an HMO if both of the following apply:

    • three or more tenants live there, forming more than one household
    • kitchen or bathrooms are shared

    A household consists of either a single person or members of the same family who live together.

    Your property is classed as a large HMO if:

    • five or more tenants live there, forming more than one household
    • kitchen or bathrooms are shared.

    If you only rent your property to one tenant, this does not constitute an HMO property.

    HMO licensing

    If your property houses 5 or more HMO tenants, you will need to obtain an HMO license from your local authority.

    Local authorities may have additional requirements for granting a licence, but you will need to provide the following information:

    • valid gas safety certificate
    • a fire risk assessment
    • evidence of working relevant smoke alarms and carbon monoxide detectors to meet HMO fire regulations
    • safety certificates for all electrical appliances
    • energy performance certificate

    If you fail to meet these legal requirements, you can be stripped of your HMO licence by the local council.

    Space and amenities

    In 2018, the government introduced guidance on minimum room sizes to prevent the issue of overcrowding. Individual sleeping accommodation must provide at least 6.51 sq m per adult or 10.22 sq m per couple.

    There are also minimum requirements for the size of other communal areas, such as the kitchen, living area, utility room and bathroom.

    Getting HMO ready

    It’s vital to take out HMO insurance, which will cover any issues caused by an HMO tenant and protect you against losses on your property investments for houses in multiple occupations.

    Many landlords want the reassurance that insurance provides against unacceptable risks of financial setbacks such as loss of rent following an incident with their rental portfolio.

    HMOs also require other safety features, including fire doors, emergency lighting, escape windows, exit signs, fire alarms and regularly maintained gas appliances with an annual gas safety check. These costs must be factored into your decision to convert your property for multiple tenants.

    Landlords of HMOs are usually responsible for paying the council tax, so this is another expense you must include when determining how much rent to charge your tenants.

    Finally, you may need help to find tenants, so you may need to use an agency or other tenant-finding service which will incur extra costs.

    How to turn your house into an HMO

    HMO conversions can be a great way to make more monthly rent from your family home. HMO landlords must understand the additional restrictions and duties that are placed on them when they convert a property to accommodate several tenants who are unrelated individuals.

    How can I use a mortgage to fund an HMO conversion?

    There are special mortgage products for HMO housing. HMO finance products, like traditional buy-to-let products, can also be offered at fixed, variable, and tracker rates. Fixed-rate HMO mortgages are usually offered for periods of 2 to 15 years, with monthly payments remaining the same during the fixed-rate period.

    Interest rates are generally higher than BTL products due to the additional risks of renting to multiple occupants.

    How can Simmonds Mortgage Services help with your HMO property?

    Simmonds Mortgage Services has experienced mortgage brokers with access to specialist lenders in the HMO market to help you find the perfect product for your investment property. Call us on 01184 693037 or use our contact form today.

    Picture of Andrew Simmonds

    Andrew Simmonds

    Andrew Simmonds is the managing director at Simmonds Mortgage Services. He's been providing mortgage advice to home owners for many years.

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