A new change to the BTL market is due to take place on 1st October 2018, this change will affect all HMOs and it is very important that all landlords are aware.
What are the current regulations regarding a HMO license?
Not all HMOs are automatically required to be licensed but the Housing Act stipulates that if a property meets the following criteria, it is required by law to have a HMO license in place:
- Three or more storeys high;
- Have five or more people in more than one household; and
- Share amenities such as bathrooms, toilets and cooking facilities
What are the new changes?
As from 1st October 2018 all HMOs that meet the criteria below will require a HMO license:
- Have five or more people in more than one household;
- Shared amenities such as bathrooms, toilets and cooking facilities
- The floor area of any room in the HMO used as sleeping accommodation by one person aged over 10 years is not less than 6.51 square metres;
- The floor area of any room in the HMO used as sleeping accommodation by two persons aged over 10 years is not less than 10.22 square metres;
- The floor area of any room in the HMO used as sleeping accommodation by one person aged under 10 years is not less than 4.64 square metres; and
- Anyroom in the HMO with a floor area of less than 4.64 square metres is not used as sleeping accommodation.
In summary the new changes have dispensed with the 3-storey requirement, resulting in any property, no matter the number of floors could be subject to a HMO license. The new changes have also introduced the requirement for minimum room sizes, the floor area varies depending on the tenants age and number of people staying in the room.
Despite the changes and complexities to HMO property they remain a great investment, producing high yields and the number of lenders that are able to finance HMOs is growing and becoming more and more competitive.
Should you be looking to invest in HMO property or looking to re-mortgage onto a better interest rate, then we have over 10 years expertise arranging mortgages for HMO property and access to a wide range of lenders to accommodate your requirements.
Call me today for a free consultation.
Alex Pedge – Consultant at Advocate Finance Ltd
Tel: 01206 544333
Professional landlords only. Any property used as security, which may include your home, may be repossessed if you do not keep up repayments on your mortgage