Not so long ago I wrote this article about the financial gains that are tempting many landlords to consider HMO’s (Houses of Multiple Occupation).
‘Are HMO’s the way forward for Enfield Landlords?’
In it I mentioned that while the increased rental income can be very attractive, the management overheads in terms of time and/ or money are greatly increased from a single let. I also pointed out that the rules were likely to change about exactly what is an HMO? (Or rather what is a licensable HMO?)
Well, lo and behold the rules are definitely changing. The three storey rule is being removed and so now if you have a property with 5 or more unrelated tenants sharing facilities, you will need a license, no matter how many floors in the property. Time to start planning! Will you apply for an HMO license or will you change your property back to a single let?
If you’re going to apply for a license it’s also worth bearing in mind that this may well have consequences for your mortgage. You have to state on your license application who your lender is and then the Council should contact them, so you may want to think about proactively moving to an HMO product. I generally find that talking to the bank before a change happens, works out cheaper than talking to them after the event!!
The rule change doesn’t come into effect until 1st October 2018 and you can apply for a license from 1st April 2018. I’d apply early. It will make no financial difference but it could save a lot of stress, and I wouldn’t want to be sat there after the 1st October wondering how far down the processing pile I am and whether my tenants will start to question whether I’ve applied for a license or will start seeing £ signs and thinking of compensation!
Now if you already know you have an HMO then fine, but what if you’re one of the many people who have let to a ‘Rent to Rent’ company or other corporate let? Do you know who is living in your property? Are you sure you don’t need a license? Now might be a good time to investigate and make sure everything is as it should be.
The minimum room size change I mentioned previously hasn’t been addressed yet but I’d start thinking about that too. Wouldn’t it be ironic if you had just purchased a license and then found out one of your rooms was too small to let………..
Please see here for more information – The Licensing of Houses in Multiple Occupation
Also, keep an eye on our Blog page for future updates – Blog Page
