How proposed changes to HMO rules could affect landlords

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The government has recently consulted on changes to the rules on houses of multiple occupancy (HMOs).

Presently, a rented house needs to be licenced as an HMO if it is three or more storeys high, or is occupied by five or more people not of the same household who share bathroom, toilet and kitchen facilities.

The government has a number of proposals designed to improve the quality of the HMO experience for tenants.

The government wants to scrap the three-storey rule, but classify flats above commercial properties as HMOs. There will also be a minimum size of space for each tenant, which is likely to be about 10 square meters. This is designed to prevent overcrowding.

Landlords will be expected to provide facilities for the storage and disposal of household waste, and another proposal is to check that landlords are “fit and proper” people to manage their properties.

All these measures are proposals, but it is expected that any changes to HMO licensing conditions will start in April 2018. Local authorities issue licences for HMOs. Any changes to the regulations could create extra work for local authorities, and this may lead to delays in issuing licences.

Most landlords will not find it difficult, or too costly, to confirm to any new licence conditions. Landlords who are considering investing in the HMO market should be able to obtain a commercial mortgage to finance property deals. Many lenders are well positioned to providing loans for HMO property purchases.

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