If you want to let a multi-room property to multiple occupants, who are not related, then you need to be aware of HMOs.
Unfortunately for landlords, different local authorities have differing criteria on what is and isn’t an HMO. Perhaps even more frustratingly, lenders also vary in their definition and what types of properties they will lend against. For that reason, it can often be advantageous to work with an HMO mortgage broker.
It’s important to keep up to date with the laws and regulations put on you as someone renting property out to others. One important aspect of property regulation is that relating to Houses in Multiple Occupation (HMO) mortgages.
An HMO is broadly defined as any property in which a washing or cooking area, or a toilet, is shared by three or more people from two or more households. A ‘household’ could be a family, couple, or a single person within a single unit of the property.
Usually, each household in a property will have a separate tenancy agreement with the landlord. Although there can be exceptions. For example, there may be cases where four students sharing a house can have a single overall tenancy agreement. In this case the law would still consider them to be four separate households.
Other examples of HMOs can include shared houses, hostels, and shared worker accommodation. They may also be referred to as multi-lets, or multi-unit properties.
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