According to the UK Government website, a home becomes a house in multiple occupancies (HMO) if:
- there are there are at least three tenants there
- they are from more than one household
- tenants share a toilet, bathroom or kitchen facilities
A house is a large HMO if it has the same criteria as above, but five tenants instead of three.
Your home is a large HMO if both of the following apply:
- at least five tenants live there, forming more than one household
- you share toilet, bathroom or kitchen facilities with other tenants
What counts as a household?
A household includes anyone who is related or in a relationship with each other. So, three friends living together would constitute three households, a couple and a flatmate would be two and a family unit (parents and kids) would only be one.
What is an HMO licence?
To ensure good quality living conditions for renters, HMO licences have been instated by the UK Government. In England and Wales, they are only needed for large HMOs (those with five or more occupants from at least two households) but for Scotland, all HMOs will need a licence (three or more people from at least two households).
Landlords can apply for an HMO licence online and if approved, it can last for up to five years. Double check with your local council how long your licence lasts for as some will need renewal more frequently than every five years. Getting these licences does cost and the cost may vary from council to council.
You’ll need to get a licence for every eligible HMO that you own separately, so factor this into your costs when deciding to become the landlord of a property that needs an HMO licence. If it is found that you’re operating an unlicenced HMO, you will face fines.
When you apply, you will have to prove that your property meets certain living standards such as making sure the size and facilities are appropriate for the number of people living there.
Do I need an HMO licence if I just have two tenants?
Nope, you’re in the clear. Even if those two occupants are from different households, a property with just two tenants won’t qualify as an HMO.
Do I need an HMO licence for three to four tenants?
You might! If all three or four tenants are related then it just counts as one household and would not be an HMO. However, if just one tenants is from a separate household then your property will be an HMO.
If you live in Scotland, you’d need a licence for three or more tenants in an HMO property. In England and Wales, you likely wouldn’t but it’s best to check with your local council as some may have stricter rules than the national benchmark.
Do I need an HMO licence for five or more tenants?
Mostly likely you will! If all five tenants are from the same family then you’re exempt but if even one is from a different household, then your property is considered a large HMO and will definitely need a licence.
HMO legal requirements
If you’re planning to rent out an HMO as a landlord, it’s important that you’re aware of all the HMO reforms that have taken place and the guidelines that have been instated to ensure properties are safe for people to live in.
Safety checks
There are a large number of safety checks and measures that you should carry out as the owner of any property. If a tenant asks for proof that these checks have been carried out, you should have a record of when they have last been carried out.
Here are a few basic safety measures that you should have in place:
- Smoke alarms
- Valid gas certificate
- Carbon monoxide detectors
- Up to date Electrical Installation Condition Report (EICR)
- Safety certificates for electrical appliances
- Fire doors
- Furnishings that meet fire resistance regulations
- Locks on each bedroom door
- Emergency lighting
- Pest control records
Minimum bedroom sizes
Another big change coming in October is the introduction of minimum bedroom sizes for HMOs. This will be decided at a local authority level, but most are likely to follow the national minimum standards:
- 6.51 square metres for one person older than 10 years of age
- 10.22 square metres for two people older than 10 years of age
- 4.64 square metres for a child aged 10 years or younger
Councils will be able to apply stricter regulations if they feel that there is an overcrowding issue in their area. There's a fine of up to £30,000 for noncompliant landlords, so it's worth digging out the tape measure.
HMO guidelines
Of course, there’s more to letting out an HMO than the legal requirements outlined above, so here’s a few more guidelines you may need to take into account if you’re running an HMO:
Fitness for human habitation
As with any property that is let out, you’ll need to meet the standards set out in the Homes (Fitness for Human Habitation) Act 2018. With more tenants in your property, there may be additional strain or consideration needed to ensure you’re in compliance with the act. You should pay particular attention to ensuring adequate hot and cold water supply, ventilation and drainage while also preventing damp. The property should also get a decent amount of natural light and have a space that makes it easy to prepare food, cook and wash up.
Property repairs
Any of the fixtures, fittings and furnishings that you provide are likely facing a stronger wear and tear due to the number of occupants in your property. As with any property, you’ll be expected to respond to any reasonable repair requests promptly.
HMO specific buy-to-let mortgages
Not all mortgage lenders will allow an HMO under your buy-to-let mortgage terms, so you’ll need to contact them and ensure you have the right kind of agreement in place. Be prepared that you may need to arrange a different type of mortgage if your existing one does not allow an HMO.
HMO specific insurance
Similarly, not all insurance policies cover HMOs, so it’s important that you speak to your insurance company and ensure that this type of property is covered under your landlord insurance.
Registering an HMO – what do you need to do?
Get in touch with your local authority to find out whether they're using the benchmark figures or applying stricter regulations, and then double check that the rooms in your home are large enough for the people living in them. You may need to re-evaluate the number of people you let to if the rooms are too small for the number of residents.
All links are checked and valid at time of publishing, 4 July 2023.
