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Are you aware of the HMO Changes for Landlords coming into effect in October?

June 20, 2018

HMOs have been a hot topic for a while now, with their rules changing last in April 2017 to bring in tighter legislation in certain boroughs. With the new rules changing in just a matter of weeks, make sure you know all the details and have done the relevant changes. 

The new changes will open up tighter legislation around larger houseshares. Legislation has previously been for specific boroughs or for certain sizes and floors of properties, but from October this will be extended to cover many more property types and therefore many more landlords.

Read on to find out if the changes affect you.

What is the current legislation?

Currently, landlords who are operating an HMO are subject to the Licensing of Houses in Multiple Occupation Order 2006, which is applied in certain regions of England and Wales. Local authorities set the cost of obtaining the licence.

There are three types of licences:

  • Mandatory Licenses affect a property rented to five or more people, who form more than one household. It must be at least three storeys high with tenants sharing a toilet, bathroom or kitchen. Some areas have slightly varying rules on this so make sure you check your own.
  • Additional Licenses relate to properties deemed HMOs that fall outside the scope of the Mandatory Licence rules. This can be introduced by local councils in areas, not necessarily for the whole borough, to help bring about better management of HMOs.
  • Selective Licenses are also determined by the local authority and can impact on different types of HMOs, irrespective of size and tenant numbers.

Find out whether your local area currently requires a licence here:

www.gov.uk/house-in-multiple-occupation-licence


What will the rules change to?

In March 2018 the Government introduced the Licensing of Houses in Multiple Occupation Order and from October 1st 2018 there will be an extension to the scope of mandatory licensing requirements for HMOs.

Basically, this means that more properties will require a licence before they can be let.

Changes include:

  • HMOs occupied by five or more people must have an appropriate mandatory licence, with the number of storeys no longer a consideration.
  • HMO licensing will also now apply to purpose-built flats where there are up to two flats in the block.
  • HMOs that currently require a selective licence, will be subject to mandatory licensing.

A licence is valid for five years and a separate licence must apply to each HMO property.

What should landlords do now?

We’ve caught up with Jorden Abbs, ‘Director of Operations’ at Commercial Trust Limited, to find out his tips for current or prospective buy-to-let landlord in the run up to these changes.

Jorden told us, “It is absolutely essential that you keep up to date with the changes taking place and ensure that you have the relevant HMO licence, if this is required.

In the first instance, you should speak to your local council to learn if a licence is necessary and if so, what you must do.The changes coming in will impact on a number of London’s landlords, but represent a further effort to improve standards with the private rental market.

Lenders already adopt differing approaches to investors who are looking to finance an HMO. So, if you are looking to obtain financing for an HMO, speak to a trusted lender who will help to identify the best buy-to-let mortgage to fit your circumstances.”

How can Portico help?

It’s important you have a trusted business to take care of your Mandatory Licenses.

Here at Portico, we can arrange and do this for you, including organising elements which are necessary under the license, such as an updated gas safety certificate every year, install and maintain smoke alarms and provide safety certificates for all electrical appliances when requested.

To find out more speak to our Property Management Team on 020 7428 5320 or email !!!marketing@portico.com.

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