The past two years have seen an unprecedented amount of change affecting the tax and regulatory environment of the rental sector.

Last year the government undertook a consultation looking at HMOs and residential property licensing. The consultation aimed to give councils best-practice guidance on standardising living conditions for HMO properties across the country, with the government publishing its response in December. The new legislation surrounding the licensing of HMOs will be enforceable from 1st October 2018 and landlords that fall under the new rules must apply for a licence or temporary exemption before this date.

The new rules plan to extend the scope of licensing for HMOs, meaning that a licence will be required for HMO properties with five or more occupiers. Currently, the licence only applies to properties with three or more storeys that are occupied by five or more people from two or more households. Ultimately, this will mean more properties will be required to have a licence.

The government has also proposed a minimum room size for bedrooms in licenced HMOs. This is something that has been hotly debated between councils and landlords, and is often called out in the press in cases where bad practices have come to light. The new guidance will recommend floor space be no less than 6.51sqm for a single adult and 10.22sqm for a single two adults sharing.

The new rules are estimated to impact roughly 170,000 properties, on top of the existing 60,000 already under licence.

Should landlords find that rooms within their property are smaller than the required dimensions, they may find difficulties in accessing funding. Being able to help the landlord understand the rules and lenders requirements is one way your mortgage broker can help.

Finally, ahead of 1 October 2018 deadline, landlords will have to apply for a licence or a temporary exemption – if they fail to do so it will be considered a criminal offence. It is important to remember that a licence will be required for each individual property either from the landlord or property management firm.

These forthcoming changes will no doubt impact both existing and prospective HMO landlords, many of whom may be unsure of the steps to take.

To find out more, please get in touch via the Contact form on the website, or on 07941 712705.