Houses In Multiple Occupation (HMO) London
What is a HMO London?
HMO – or House in Multiple Occupation – refers to the way household tenants are living together in landlord, local authority or local council owned residential properties for the purposes of mandatory property licensing, as categorised under Section 254 of the Housing Act, 2004.
A HMO London property is defined as:
A property occupied by at least 3 people paying rent but who are not from within the same ‘household’ (e.g. a family) and are not living in self-contained flats.
Traditionally referred to as a ‘house share’, each rental tenant in an occupied HMO property will share one or more facilities, usually the bathroom, kitchen, lounge or a communal room area.
Mandatory HMO Licence London
By law, a Mandatory HMO Licence London is required when:
A property is categorised as an HMO, in which there is “material sharing” of facilities by tenants – and not a family, such as:
- A HMO house split into bedsits where each tenant has sole use of their own private bedroom but shares a kitchen or bathroom and WC.
- Students living in shared accommodation where they have exclusive use of the whole house.
- An owner-occupier, e.g. the landlord with more than TWO tenants paying monthly rent but each have a licence to occupy their accommodation.
Types of properties London that can be classed as HMO, include:
- Shared flats and houses
- Student halls of residence
- Boarding houses
HMO licences are valid for one continuous period of five years. A separate licence is required for each HMO managed by the landlord or management company.
Do I Need a HMO Licence London?
You may need to apply for a mandatory HMO licence if your property meets the following criteria:
- House is at least THREE stories high -and-
- FIVE or more residents renting / living together in the property at some stage.
Further HMO Licensing Types
Smaller HMO Licence London
There are also specific circumstances where a licence may be needed for a much smaller HMO including:
Additional Licensing London
At the discretion of each individual London borough Council.
Additional licensing may be required by landlords for any HMO property not needing a Mandatory HMO licence, including:
- FIVE or more people occupying a house regardless of the number of storeys.
- FIVE or more people living in a HMO property located above or below a business premises.
- Property is a self-contained flat – but purpose-built – in a block comprising THREE or more flats.
Selective Licensing London
At the discretion of each individual London borough Council.
Any landlord who owns or manages a HMO property must comply with the current HMO Licensing requirements operating within their local borough council.
Even if a property is small with fewer people paying monthly rent, a licence may still be needed.
Penalties for Non-Possession of Correct HMO Licence
Operating or managing one or more HMO properties London without possession of the correct licensing – whether Mandatory, Additional or Selective – is illegal and a criminal offence.
A landlord can face penalties of up to £30,000 or face prosecution in a magistrates court with an unlimited fine. Any rent collected (or profits made) while letting the property illegally could also be forcibly removed from the landlord and returned to the tenants.
Where breaches of the Order are identified, a HMO licence holder – whether landlord or estate agents- will be given a specified period of not more than 18 months from the date of notification to bring the property to the required standard.
Investment and Planning Opportunity
The HMO continues to rapidly grow in popularity among investors. Landlords see higher gross yields than a standard buy to let property, from 8.6% in 2018 to 9.6% in 2019 compared to 0.3 % growth over the same period for a buy to let.
Meanwhile, the UK population continues to grow and the housing shortage issue remains unresolved, especially in London.
The number of HMOs issued with mandatory licences by London boroughs increased to 11,704 in April 2019 from 9,683 in April 2017 – Housing in London 2020, GLA Housing and Land.
The development of HMOs undoubtedly continues to provide a low cost solution within the private sector.
They increasingly provide much-needed flexibility for the young professional but also for those families whose primary earner has to work away from home.
HMO accommodation is more likely to be made readily available to those who need to search for temporary accommodation or for housing students in London and other urban centres across the UK.
Permitted Development Rights for HMO
A HMO is an essential part of the housing industry, and its continued existence is necessary to ensure sufficient capacity for meeting ever-increasing housing demands.
From a small 1 or 2 bedroom house to a 3 to 5 bed or more property, it is increasingly important to maintain standards for existing HMO properties, and future new developments. Property developers will always require proper assessments to ensure no adverse impact to surrounding residential properties.
Town and County Council Planning Acts
Under the Town and County Council planning Acts Article 4 Directive, local authorities have the power to remove any permitted development, if certain conditions apply.
Article 4 must be accompanied by a plan which shows the area subject to the Directive.
In this way, Councils aim to manage the development of HMOs and improve the living standards of residents while meeting the housing needs of the community.
Article 4 Directive
For this reason, most London councils confirm the Article 4 Directive for changing a “single use” property to a “C4 property” with increased multiple room capacity, in some locations.
For the changes to be made, it becomes necessary to allow a “permitted development” but not all HMOs require planning permission.
Monitor HMO locations
As a result, an increase in the number of HMOs in a certain area can exert an unnecessary strain upon the facilities for other properties within the surrounding area.
Confirmation of the Article 4 Directive allows a council to monitor the location of all new HMOs and assess the impact upon the local housing infrastructure.
Converting a Property to HMO under Permitted Development Rights
Planning permission is not ordinarily needed to convert a house or a flat to a HMO property but councils are increasingly imposing the requirement.
If a council decides to remove the rights by enforcing the Article 4 Directive… Planning permission WILL be needed to change the use of a C3 House to C4 HMO
It is important to note that imposition of Article 4 will not stop development but simply requires planning permission to be sought for a HMO property development.
Any council enforcement should not stop any planning development, but application for planning permission to develop a HMO must be made .
What is the Difference between C3 and C4 Property?
C3 – property used by a single person or a family.
C4 or HMO – small property shared by up to 6 unrelated people.
Large HMO – house shared by more than 6 unrelated people.
Compliance with HMO Regulations
Permission is only granted from the council or local authority when alterations / improvements needed to be made to convert a property to a HMO fully comply with regulations.
Under he new Order, landlords are allowed to make changes between the different classifications without a planning permission, but subject to certain conditions.
Planning permission becomes necessary for a change of use between a C3 to a C4, and must be applied if the Article 4 Directive operates in a local authority area.
Our Role in HMO Property Development Projects
Our qualified experienced team of structural engineers play a vital role in the design and construction of existing and new HMO development projects.
We work alongside architects and other professionals every step of the way to create innovative and cost-effective property design solutions in compliance with Housing Act regulations, and every type of HMO licensing requirement.
Whether you are a local authority, private property developer or landlord intending to purchase, build or or renovate a residential HMO London property development, large or small –
We offer the complete HMO London property service.