HMO Licensing Info
As more of our BTL clients are looking to expand their portfolios and move into the HMO market, I wanted to share a little bit of information regarding the licensing requirements.
The licensing schemes can vary between local authorities and can be subject to change so it’s always worth checking your local authority (LA) website in the first instance. For example, the minimum room size requirement is 6.51sqm for a single room (or 10.22sqm for a double), however the LA could set higher minimums if necessary.
In short, the licensing scheme are in place to help ensure that private rental properties meet a minimum level in terms of quality and safety, and that the landlords are also up to the job.
There are 3 types of licensing:
Mandatory Licensing
A Mandatory HMO Licence is required when you rent a property with 5 or more unrelated tenants that form 2 or more households, and they share facilities such as kitchens and bathrooms. A typical example would be a terraced property let to 6 students.
In addition, if the property is let to seven or more individuals it would then fall into another category of planning called Sui Generis, which would require a separate planning application.
Residential property is categorised as C3 usage. HMOs with less than seven occupants may apply to move to C4 from C3 usage under Permitted Development Rights. However, the challenge comes when the Council has applied an Article 4 directive over the area where the property is situated.
This would mean landlords need to provide evidence that the property had been used as an HMO before the Article 4 directive was implemented to gain a certificate of lawfulness or for the local council to grant C4 usage.
Therefore, it is always important when it comes to HMO properties not only to check for the correct licensing but also the correct planning permissions.
Additional Licensing
An Additional License is for smaller HMO properties that do not come under mandatory licencing criteria. They allow local councils to address specific issues related to smaller properties such as a 3 bedroom property let to 3 individuals.
Selective Licensing
These licences can apply to any rented property in a selected location (eg a street or postcode area) regardless of the way they are tenanted. So anything from a 1 bedroom flat to a 20 room HMO could be included.
In selective licensing areas, landlords are required to apply for a license before renting out a property. This process allows the council to determine whether the landlord is a "fit and proper person" to manage a rental.
Article 4 area
As well as local authority licensing, there may also be planning restrictions to the property should it fall within an Article 4 area.
A local council can designate areas as an "Article 4 area", meaning that certain permitted development rights have been removed. In this instance the landlord would need to apply for planning permission before making certain changes to their property. Typically, this would mean a restriction against converting standard properties into HMOs without planning permission. We would always recommend that you check with your local authority before purchasing or converting a house if you are unsure.
