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I am a long time lurker looking to get into the BTL market. I have been doing a fair amount of research and think I have manged to confuse myself with all the information I am looking at, hoping someone here can provide some clarification,.
In short, my question is:
1. Is a two bed property with the bedrooms rented out separately to two individuals classed as an HMO?
I am looking to start off small, with a two bed property and rent the rooms out individually. I was originally under the assumption that this wouldn't fall under the definition of an HMO as I read on multiple sites that it had to be more than 3 tenants. However the more I look into this I believe it would be, as "(b)is occupied by persons living in two or more separate households" as per the new legislation. So am I correct in thinking this would be classed as an HMO?
If so I understand that I wouldn't need to apply for an HMO license (please correct me if I am wrong) due to the size but would there be anything I need to apply for? (this is in the Leeds area).
My second question is surrounding fire regulations- Some of the houses I have been looking at are 3 storey back-to-back terraces. Bedroom in the attic, bedroom and bathroom on the first floor, and living room and kitchen on the ground floor. The main entrance and staircase run straight off the living room. Reading through the 'fire safety principles for residential accommodation' doc I believe the house fall under section 2.5.1. Is this correct?
Obviously, before progressing with this I will make the necessary enquiries with the council etc. However I would like to get some input from experience landlords first to see if I am on the right track above. My main concern is that if the 2 bed properties do fall under the HMO banner, the amount of work to make them meet regulations may not be worth it.
Hi Ben and welcome to the tribe.We recently ran "HMO Compliance Week" with HMO legal expert David Smith, and one of the videos created answers your first question:
Here is the rest of the content, which I am sure you will find helpful:Monday - Launch of HMO Week - overview of changes/how to find informationTuesday - Minimum room sizes/understanding licensing feesWednesday - Mandatory licensing changesThursday - Understanding management regulations/Rent to Rent HMO issuesFriday - Who is responsible and when to apply for a licence/consequences of non-compliance I believe you are the right track with regards to fire regulations, but your local HMO Officer should be able to advise you or hopefully someone with more knowledge of this area than myself will be along to input.Happy new year!
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
David makes a mistake at about 25 seconds into the video. He says an HMO has 'more than 3 people' when it should be 'more than 2 people' or '3 or more people'.
Two people can never be an HMO. There is an exemption in schedule 14 of the Housing Act 2004. However if you have three people living there regardless of whether or not they are on the tenancy agreement then it will be an HMO.
I think you need to look at figures as renting two rooms is unlikely to be any more profitable than renting the house as one unit if you are renting the rooms inclusive of bills. It might even be less profitable. Your tenants are more likely to he transient aswell.
Rural Practice Chartered Surveyor. Experienced in estate management, residential investments, planning and development and rights for utility apparatus. All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
Yes the bills are an important consideration in that scenario - a family would expect to be responsible for up to say £400 of basic monthly bills - but 2 single tenants may be unwilling to pay another £200 pcm each on top of whatever a bedsit rent is locally.
David stated .... """""Two people can never be an HMO. There is an exemption in schedule 14 of the Housing Act 2004. However if you have three people living there regardless of whether or not they are on the tenancy agreement then it will be an HMO.""""""
Don't think that applies if one of them is the property owner and there are only 2 additional lodgers. Can't remember/find where it says so in what acct...