The licencing scheme for houses of multiple occupancy (HMO) is being extended. Commercial mortgage brokers can help landlords understand the new rules.
Homes classified as HMO, from October 1st 2018, will include properties where five or more tenants, or two or more families share communal facilities such as bathrooms, lounge and kitchen. The regulations also apply to houses with self-contained flats and purpose built blocks of flats occupied by different tenants. These changes mean that many more properties will be classed as HMO than current properties.
A landlord will need a licence from the local authority for each HMO he owns. The licence will have conditions designed to protect the safety of tenants, such as the installation of fire doors, and regular safety checks of equipment. For some properties, upgrade work will be required.
Kevin Thomas writing on the website mortgagestrategy.co.uk in June 2018, recommends that commercial mortgage brokers talk to landlords they know have properties that need reclassifying. The brokers can advise them on what they need to do to conform to the regulations. If building work is needed to upgrade the property, the broker can arrange for a remortgage or bridging loan to finance the work if the landlord has not got enough funds.
Many professional landlords will be aware of the changes, but small landlords with one or two properties may not be up to date. A broker can provide a valuable service in advising them. Failure to obtain a licence can result in a fine.