New HMO rules 2018 – are you compliant?

If you’re an investor with existing properties you may well be aware of some new HMO rules that came into effect this month.

Over the last few months we have been advising our property investor clients to read up on the order, which was originally agreed in February this year and became law on 1st October 2018.

These new HMO rules are covered by “The Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018”, which can be read in full here.

New HMO rules – what’s changed?

The changes have been on the cards for a while and in reality very little is different. Prior to 1st October 2018 a HMO property needed a mandatory licence – that is a licence prescribed by government – if it met the following criteria:

  • There were 5 or more people in the accommodation
  • It had three or more stories
  • It formed two or more households

Since coming into effect the new HMO rules mean that a HMO now needs a mandatory licence if:

  • There are 5 or more people in the accommodation
  • It has any number of stories
  • It forms two or more households

So, the only change really is regarding the number of stories. If you had a property that previously required a mandatory licence and it has not yet expired – you don’t need to do anything, just renew as normal when it does.

If, however, you manage a HMO that previously didn’t need a mandatory licence, but does under the new HMO rules you should submit an application for a mandatory licence. Hopefully, you will have done this ahead of the 1st October deadline and avoided any fines, but if not we recommend you seek advice and ensure you are compliant as a matter of urgency.

New HMO Rules – mandatory, additional and selective licensing

For those in the process of creating a new HMO or HMOs it’s obviously essential you make sure you are in compliance with the new HMO rules and apply for the appropriate licence when the project is complete.

As well as mandatory licensing, it’s also worth mentioning additional licensing, which can be introduced on any HMO regardless of if it meets the standard HMO test mentioned above, on a council by council basis. You can check for additional licensing requirements on the HMO section of your council website, or speak to your appointed architects, architectural designers or project managers, who will be able to advise.

It’s also important to check for selective licensing. This is not HMO specific and is a licensing scheme that can be applied across all rental properties in a particular council or borough to try and manage the quality and condition of rental properties. Again this is very easy to check with your local council, or ask the experts you have engaged to complete your project to advise.

Planning vs Licensing

One final note to consider is that just because your HMO doesn’t need planning permission, doesn’t mean that it won’t need licensing. To be sure, simply ask the following questions:

  • Does my HMO house more than five people, have any number of stories and comprise two households? If yes, then you need a mandatory licence
  • Are there additional licences in effect in the council or borough my property is located?
  • Are there selective licences in effect in the council or borough my property is located?

If you’re still unsure or would like advice or support for a particular project, why not contact us for a chat?

Image copyright Nigel Mykura