November 6th, 2018 / Insight posted in Articles

Property alert – new rules for houses in multiple occupation

New legislation has come into effect in England and Wales that affects landlords of houses in multiple occupation (HMO). The summary below gives brief details of the main changes to the rules.

Minimum standards for bedroom sizes

The following minimum standards now apply:

  • Double bedrooms must be at least 10.22m2 in area;
  • Single bedrooms must be at least 6.51m2 in area;
  • For children under the age of 10, a single bedroom must be at least 4.64m2 in area.

Rooms smaller than 4.64m2 must not be used as sleeping accommodation.

Breaching these rules could lead to the conviction of a criminal offence. The ultimate sanction is an unlimited fine, or alternatively a civil penalty of up to £30,000.

Landlords should check the dimensions of their property’s bedrooms. This might mean changing the furniture in small rooms and the property’s description in adverts to ensure compliance with the new rules. This will no doubt become a consideration when investors acquire properties as well.

HMO definition change

The definition of an HMO for licensing purposes has also been changed meaning many more landlords now need HMO licences. The definition states that a property is an HMO if both of the following apply:

  • At least three individual tenancy agreements are in place, forming more than one household; and
  • Toilet, bathroom and kitchen facilities are shared with other tenants.

The exemption relating to the number of storeys in a property has fallen away.

Guide to pricing

Licences are not free and the pricing structure varies with each council. An approximate indication of pricing would be £500 for three to five individual occupancies and up to £1,300 for more than nine. Every property needs its own licence, which must be renewed every five years. Letting without an HMO licence can result in an unlimited fine.

Purpose-built flats, conversions, bungalows and large two-storey homes as well as student and graduate house shares may now need an HMO licence. We expect that landlords will seek to pass these costs onto their tenants through increased rent. Those who cannot may see this as another reason for exiting the buy-to-let market.

Here to help

If any of this raises concern or you would like to speak to a property industry expert, please contact your partner at Kingston Smith or a member of our property team who will be happy to help.