42: New Regulations for HMOs in UK - brief summary
In October this year, there will be new regulations issued for Homes of Multiple Occupancy (HMO). An HMO is a home where people that are not related share facilities such as bathroom and kitchen. This may only be four people living in different rooms sharing a kitchen – this would be classified as an HMO. Some of these HMOs will need a certificate for the council – these are the homes considered to be at higher risk. These are generally properties that have rooms high off the ground – say three or four floors high, particularly if they do not have a fire escape. For 3 or 4 story HMO properties, investors should be careful when purchasing these – they should make sure they have proper fire detection / prevention devices and preferably a certificate from the council that agrees to its use as an HMO.
These new regulations will add significant cost to such properties – many investors may choose to move out of such letting, in view of the costs and risks. Demand for such separate rooms is likely to stay high, and supply lower, so yields should improve, albeit one would need to work harder, on the regulations, to achieve this. It seems the new regulations are not yet clear, so people who are unsure should contact the council and register with them. In doing so mind, after filling in a questionnaire, you might get a visit from an inspector, if your home is deemed high risk, and you do not have any fire prevention system in place. If you are unsure about the fire system, contact your local fire bridge for advice – they may be able to visit for free, and give a list of what is require to conform to likely legislation. If this spooks you – stay out of HMO, particularly if more than 4 people live in the property, and it is over more than 2 floors!