If you’re a landlord planning to convert your property from residential to HMO, it can provide a lucrative source of income. Many landlords choose to rent out houses in multiple occupation, as they believe this is a more efficient way to run their portfolio.
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Despite the extra work involved, the chance to collect rent from a larger number of tenants and the potentially higher rental yield is appealing. Some locations and properties are tailor-made for HMOs, such as busy student areas where there are large properties.
In tenants’ eyes, living in an HMO can be preferable, as the individual rent payments tend to be lower and it gives them the opportunity to live with more people, such as fellow students, for a better social atmosphere.
If you’re a landlord considering converting a property into an HMO, there are several things you must do, such as meeting the relevant legal requirements and ensuring the property is considered habitable for more people.
What is an HMO?
A house in multiple occupation is a property rented by three or more tenants who are not part of one household or family. When your property is rented to five or more tenants from different households, with shared kitchen, bathroom or toilet facilities, it’s considered a large HMO.
The legal aspects of converting your property include applying for the relevant licence, thus complying with the rules in the UK that were last updated in October 2018. If you’re not sure which licence (if any) you need as a landlord, check with your local authority to make sure you’re not going to be breaking the law.
You also need to meet various health and safety regulations, such as providing a valid gas safety certificate to the local authority annually, having safety certificates for electrical appliances available on request and installing smoke alarms and carbon monoxide detectors.
What are the minimum requirements for HMO properties?
The rules governing minimum HMO room sizes require landlords to notify the local housing authority if any room has a floor area of less than 4.64 square metres.
The floor area of any bedroom used by one resident aged over ten years must be at least 6.51 sq m. If the bedroom is used by two people over ten years old, the floor area must be at least 10.22 sq m.
If your property isn’t HMO-ready, you may have to make some changes to ensure it meets the legislative requirements. As well as your afore-mentioned obligations in terms of space, you’ll also need to consider the layout, furniture, facilities and appliances.
If you’ve converted your property into an HMO, your local council will undertake a Housing Health and Safety Rating System risk assessment to identify any potential problems. The HHSRS was reviewed by the government last year and consequently, its guidelines may be updated in the near future.
Of course, any unacceptable risks, such as carbon monoxide, asbestos or radiation, must be addressed immediately. The health and safety requirements are extensive and may differ from area to area, depending on your local authority’s requirements.
Some of the key requirements include having a lock on each bedroom door and emergency lighting for fire safety reasons. Always check the local regulations before you embark on converting your property to avoid costly mistakes further down the line.
What is the law relating to HMO furniture?
Any furniture and furnishings you provide as a landlord must meet the latest fire safety regulations. The furniture covered by the law includes beds, headboards, mattresses, pillows, settees and bed-settees, futons, nursery furniture, padded stools, bean bags, loose covers for furniture, scatter cushions and garden furniture, such as loungers, that can be used indoors. Furniture manufactured after March 1989 should comply with the regulations and will be marked with a label proving their compliance. The regulations don’t cover curtains and carpets.
The absolute minimum requirements in terms of the furniture a landlord should provide include beds, mattresses, wardrobes, drawers and curtains in the bedroom.
In the kitchen, the landlord should provide a fridge-freezer, oven, hob, washing machine and microwave oven. The lounge should have a table and chairs, a settee, television set and storage space.
The furniture should be provided in a sufficient size and quantity to satisfy the number of tenants living in your HMO. For example, if there are six tenants living in a property with a shared kitchen, the fridge-freezer should be suitable to store enough food for six people.
Providing too few furnishings can have a negative impact on attracting HMO tenants. From the tenants’ point of view, one of the attractions of living in an HMO is having the furniture provided, so if it’s sparse, it may deter people from moving in.
Usually, landlords of HMOs find they are replacing furniture every three to five years, so it’s important to strike a good balance between durability, budget and style.