As a property owner or manager of a House of Multiple Occupation you should be aware of a change in legislation in what defines a HMO.
The proposed changes to HMO’s have been approved by Parliament and will take effect from 1st October 2018. They will have an impact on lender HMO definitions. Going forward, the majority of “Shared BTLs” will require a mandatory licence because the requirement for the property to be over 3 floors has been removed. This means that any property (including flats) occupied by 5 or more people forming 2 or more households will require mandatory HMO licencing. This opens up 2-bed/2-reception and 3-bed properties occupied by 5 individuals, for example:-
1 couple and 3 individuals
2 couples and 1 individual
There is a transition period of 6 months to allow landlords with properties that fit the new mandatory requirements to apply for licencing. Anyone with an existing non-mandatory (selective or additional) licence issued by the local authority will automatically be passported onto the mandatory scheme.
Remember councils WILL notify lenders of licensing applications. All new mortgages, re-mortgages, further advances and product transfers will need to adhere to the new rules.
It is a legal requirement to have any HMO fire risk assessed. Lenders are now requesting an up to date Fire Risk Assessment before agreeing to release funds. If you are considering a re-mortgage or further advance on your property then make sure you have this in place to help your application go through smoothly and as quickly as possible.
Make sure you are compliant, give us a call and we will risk assess your HMO to help you ensure you meet the current fire safety legislation.