Councils crack down on HMO landlords

A number of county councils are tightening up on the legislation applied to property investors who own Houses in Multiple Occupation (HMOs), and levying fines on those who do not possess the correct licences.

The definition of an HMO can be confusing, but in essence it is a rented property that is occupied by tenants who are not related to each other.

If an HMO property has more three or more storeys and five or more tenants using shared bathroom and kitchen facilities, it requires a special HMO licence, issued by the local council.

In a recent case, two landlords in Peterborough were fined £4,000 for not being in possession of the correct licences.

In Swansea another landlord was fined more than £10,000 for renting unlicenced properties to students.

Chris Baguley, director at lending specialist Auction Finance Limited, said:

“HMO is a commonly used phrase but many landlords don’t understand exactly what the term means and whether they need a license.

"Landlords of HMOs must manage their properties well and this means ensuring there is a means of escape, fire fighting equipment and alarms in working order. Councils are cracking down on landlords that don’t abide by the rules.

“It’s common for HMOs to come up for sale at auction and they’re always extremely popular as they can achieve high yields. As long as you get a license they make an excellent investment.

“If you need a license and fail to get one from the council, you could be liable for a huge fine. If you’re in any doubt about whether you need a license, contact your council.”

In October this year, further legislative changes will be introduced, requiring landlords wishing to change their properties into HMOs to obtain planning permission.