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Properties with three bedrooms or more, most commonly flats in city center locations, can be appealing to the likes of friends, university students or young professionals as they offer a great way to reduce individual rent and bills. It is true that renting of this kind can be extremely beneficial, both for tenants and landlords alike. However, strict regulation exists in the form of a HMO licence.

It is first useful to understand what a HMO actually is. With a formal title of “houses of multiple occupation”, HMO licences were introduced by the government in 2004 and essentially act as a preventative measure against poor housing conditions. Current regulations make a HMO licence necessary in any household, regardless of bedrooms, where there are 3 or more people living who are not related (or family). Breaching the conditions of regulation regarding house shares is likely to result in extensive fines of up to £50,000 and so it is essential for landlords to ensure they operate accurately.

Although HMO licensing can be considered as something of a hassle, it can be extremely lucrative for many Landlords. Rent in HMO properties can be split between multiple incomes and therefore are properties can be more affordable for tenants. Consequently, this has a knock-on effect for Landlords being able to rent properties for their market value rather than subsidizing to suit individual renters. Students are often among st the most common of HMO renters, seeking properties which are central and with multiple bedrooms.

Before embarking on securing a HMO licence, it is essential to understand what the licence actually encompasses. Failing to meet HMO standards can result in substantial fines of up to £10,000. The licensing of HMO’s seeks to control standards in three main areas: the suitability of a property owner to be an HMO landlord, management of the property, and the physical condition and facilities of the accommodation. Before granting a licence, the council will evaluate the performance on each of these criteria. HMO licensing encompasses a host of criteria including furniture and fire precautions, gas and electrical installations, finance handling and Landlord behavior.

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