HMO Property (Houses in Multiple Occupation): A Complete Guide

What is HMO Property?

An HMO, a House in Multiple Occupation, stands as a property that is rented out to a minimum of three people. These tenants are not from the same household and are a stranger that has to share basic amenities, such as a kitchen, bathroom, or toilet. Besides, this form of shared lodging is the most common form of student accommodation in UK, typically for those looking for the best options under budget. For example: - shared houses, flats, bedsits, and more.

Apart from this, the landlord of a house of multiple occupancy has a variety of legal duties that include licensing to boast security and compliance with regulations.

Now that you properly understand what is an HMO property is, it is time to look into who needs it. So, let’s unlock its answer in the following section.

Who Needs an HMO Property?

Until now, you have learnt what an HMO property is; however, in this section of the blog, you will understand that it is a form of HMO housing catering to distinct individuals. Moreover, these people are those seeking the most budget-friendly living options with great communal links. So, let’s step on and read about them one by one below: -

1. Students: - Cater to students looking for HMO rooms within your means near campus.
2. Young Professionals / International Workers: People seeking flexible HMO accommodation options within budget and with comprehensive rent prefer these options.
3. Lower Income Individuals: These options are also convenient for such individuals, helping them manage expenses with low HMO rent and bills.
4. Community Seekers: As this type of space offers social interaction, community seekers often go for such options.

Types of HMO Property

An HMO offers a vast array of housing types that span from charming college towns to thriving cities. Moreover, it provides lodging with a variety of facilities catering to distinct tastes. Thus, this section is going to thoroughly explain HMO housing types from communal flats to shared rooms. Let’s read on!

1. Bedsit Student HMO: - This is one of the most common types of student accommodation in Australia or anywhere around the world, offering personal rooms with shared facilities, such as bathrooms, toilets, or kitchens. Also, it is known as the best option, boasting privacy at a low cost.
2. Shared Houses and Shared Flats: - The next housing option in line is “Shared Houses or Flats”, often rented by groups of friends, with private bedrooms and joint communal spaces. It is mostly the most affordable option for them.
3. Household with Lodgers: - It is a living space where owners rent the place where they presently live to unrelated three or more tenants, breeding community feelings.
4. A Mixture of rooms and flats: - Properties provide you with a blend of accommodation options, merging liberated living with collective amenities, at times used in the social housing HMO
5. Bed and Breakfast Hotels: - These are hotels employed for housing purposes past short-term holidays, allowing individuals to sleep and have breakfast for a night and morning.

HMO Property Licensing Requirements

Typically, at the time of considering an HMO for sale, navigating through the Licensing Requirements stands to be extremely important. Thus, in this section, you are going to unlock a few necessities, which are as follows: -

1. Obligatory Licensing: - Essential for large HMOs, i.e., more than five tenants & sharing facilities, irrespective of property location or type.
2. Extra Licensing: - Local boards can need this for a smaller HMO property or properties, i.e., more than three tenants & sharing facilities in certain locations.
3. Property Standards: - These options must fulfil basic standards, such as room size regulations, gas safety, fire safety, and electrical safety.
4. Fit and Proper Person Test: - Property owners and managers are evaluated for relevance, for example, criminal record, housing law breaches, and others.
5. Penalties: - Working with an unlicensed HMO property transmits risks, such as Rent Repayment Orders, unlimited fines, and exertion in evicting tenants.
6. Buying an HMO for Sale: - Authenticate licensing status before buying, as licenses are non-transferable.

Legal Obligations for HMO Property Landlords

Supervising a House of Multiple Occupancy comes with certain legal accountabilities for owners to certify the well-being and safety of their renters and meet the terms or regulations, together with those possibly included in the social housing HMO deals. Let’s look at the duties of landlords closely:

1. Licensing: - For specific HMOs, owners must get compulsory HMO authorization from local councils.
2. Safety and Health: -

• Fire Safety: - Apply measures for fire safety, such as heat detectors, fire doors, and installing smoke alarms.
• Gas Safety: - Supervise annual gas safety checks through a gas-safe engineer (registered).
• Electrical Safety: - Make sure that the electrical system stands to be safe.

1. Property Maintenance: - Retain your property in good shape, keeping up with common areas.
2. Prevent Overcrowding: - Ensuring that the property stands not to be overcrowded is extremely important & that happens when you fulfil minimum room size requirements.
3. Waste Management: - Ensure proper waste disposal facilities.
4. Written Agreements: - Deliver fair and clear rental contracts demonstrating lodger rights and duties.
5. Resolving Concerns: - Punctually address all the tenant-related concerns and fairly resolve arguments.
6. Positive Management: - Carry on with regular check-ups and conversations for being sure of an ongoing agreement.

Thus, by meeting all such obligations, owners ensure that their HMO property stays safe, liveable, and accommodating with applicable guidelines, counting those precise with social housing HMOs.

Pros and Cons of HMO Property for Tenants & Landlords

As you are now well-acquainted with everything about the HMO property, you must also acknowledge its fortes and challenges for both owners and renters. While these accommodations offer a higher yield, managing numerous tenants at the same time causes distress. So, let’s look into the pros and cons of the same as given below: -

Pros

Cons

How to Find an HMO Property?

Let’s step forward and delve into a few ways to find the most trusted property: -

1. Property Portals Online: Seek listings on various property portals, such as Zoopla, Rightmove, & targeted HMO sites (for example Agent HMO and PropertyData).
2. Estate Agents: Get familiar with domestic HMO expert estate negotiators for accessing off-market and listed deals.
3. Social Media Groups: You can also join online rental and accommodation forums and local Facebook groups. These groups will let you connect with rental listings easily.
4. Word of Mouth: Lastly, you must ask your classmates, colleagues, or friends who live in homes and have spare space available for rent or who know such property.

Conclusion

To sum up, securing the right HMO property stands to be the key to budget-friendly, profitable investment and society-driven living. Thus, whether you are a young professional, student, or owner, acknowledging legal duties, along with licensing, is crucially important.

Apart from this, if you are looking for a streamlined search experience and want to secure one of the best listings, just explore GraddingHomes, which is a reliable platform for offering quality HMO housing options.

FAQs

1. What is an HMO property?

An HMO, which is an acronym for House in Multiple Occupations, stands for a property that is leased to at least three tenants. Moreover, they have to share basic facilities, such as kitchens and bathrooms.

2. Who needs an HMO license?

Property owners of specific HMOs require a license. In general, these licenses stand to be essential for owning HMOs with a large number of tenants, say five or more. 

3. What happens if a landlord rents out an unlicensed HMO?

If landlords rent out an unlicensed HMO property, then it is deemed to be illegal, and they have to face heavy penalties. These fines include Rent Repayment Orders, unlimited monetary harm, and also a potential criminal record. 

4. Are HMOs only for students?

Ans. No, HMOs don't need to be only student-specific. Although they are typically made to serve students, young professionals and others looking for inexpensive housing options can also explore them. HMOs' attractive benefits and inexpensiveness draw an extensive array of tenants.

5. What are the benefits of living in an HMO?

Ans.HMO boasts a variety of advantages for both tenants and landlords, including a built-in community, inexpensiveness because of shared costs, & flexible living measures. Moreover, various living spaces offer all-inclusive rent with a variety of bills for cost clarity. Lastly, these properties are often fully equipped.