New HMO licensing laws designed to protect occupants from overcrowding and keep them safe come into force on October 1st, 2018.
The definition of Houses of Multiple Occupation is property that is let to two or more households. Previously only property two or more storeys high where five or more tenants from more than one household live was covered by HMO regulations. It is thought that about 177,000 landlords will be affected by the new regulations that prescribe minimum room sizes and safety standards. Landlords who fail to comply with the new rules face fines of up to £30,000 and possible criminal prosecution.
Commercial mortgage lenders offer mortgages for HMO property on the condition that they comply with the regulations, though some will allow a few months for landlords to perform the necessary upgrades. Landlords who do not have the finance available to improve properties may be able to remortgage property or apply for a bridging loan.
The reason the government says they introduced the new regulations was that many people live in properties not built for multiple occupation; they are overcrowded and are a fire risk. They accuse some “rogue” landlords of filling properties with vulnerable tenants who live in dangerous conditions.
Local authorities issue licences for HMO property. Conditions on the licences vary between local authorities. Landlords are advised to check with their local authority about what they need to do to make sure that their properties conform to the regulations.