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Overcoming challenges to HMO investing – Regulation

Published: 01/03/2017 By JG

In a recent article, we discussed the challenging subject of obtaining planning permission for HMO’s in an article 4 area. 

There are a number of other hurdles to consider if you are looking to invest in HMO’s.  Here we will tackle another of them so you are prepared and to arm you with the knowledge that you will need.

What are the regulatory requirements?

It’s no secret that HMO’s are a more complex area than typical buy-to-let and single let properties. Regulation can be broken down into different areas, for example:

  • Planning requirements. See our previous article on this, entitled ‘How to get planning permission for a HMO (in an article 4 area)
  • Licensing  requirements (this comes into effect when you are letting to 5 or more unrelated sharers from 2 or more households. For example letting a 5 bed property room-by-room almost always falls under this area)

There are a number of resources available on the subject and many of them can be found on your local authority’s website.

Of course, it may be easier for you to find an experienced Letting Agent in Leeds that is highly knowledgeable and specialises in this area (such as Dwell Leeds!). This will save you a lot of time and make sure you don’t miss anything. Mistakes can be dangerous and very costly if you find out the hard way!

Cost to set up a HMO

This can vary. You will need to understand that there are certain requirements that you will need to meet in order for your HMO to comply with planning and licensing requirements. Each HMO is different and needs consideration on an individual level, but for the purposes of the blog we will give some general rules here on how you will need to fit out your HMO. Most of these relate to fire safety.

Small HMO’s (3-4 beds)

Although these usually require planning permission for C4 use, these properties don't require a license, therefore there is usually less to do in the property to ensure it’s compliant. However, you will need to ensure you have:

  • Fire doors throughout the property
  • Interlinked hardwired smoke detectors with a battery back-up

Licensable HMO’s  (5+beds)

Again the exact requirements will vary depending on the property. It will also usually vary based on whether the council would classify the property as a category A or category B HMO. The different categories exist due to the intended use of the property. For example Category A is usually where all rooms are to be let to individuals that don’t come as a group and don’t know each other when they move in (AST’s on individual rooms). Category B is usually where the property is to be let to groups that come as a unit, for example students (one common AST). Category A usually has a more extensive list of requirements than Category B.  Common requirements are:

  • Fire doors throughout the property
  • Interlinked hardwired smoke detectors with a battery back up
  • Fire detection system
  • Fire blanket(s) close to cooker(s)
  • Emergency lighting with battery back-up
  • Escape routes in case of fire
  • Adequate cooking facilities
  • Adequate washing facilities
  • Adequate work surface space

This is not an exhaustive list and the precise spec is beyond the scope of this article.

If you are looking for more information on HMO regulation in Leeds, please get in touch and we will send you information that is relevant to you, for example Leeds City Council’s HMO guides, planning or licensing application forms, and detailed HMO specifications.