Named houses in multiple occupation (HMOs), the definition of these properties was expanded on 1 October to include any property occupied by five or more tenants.
The changes also mean that flats above high street shops could now be included in mandatory licensing, as well as smaller blocks of flats.
In addition to these adjustments, the room size of properties must now meet minimum requirements.
This includes single bedrooms for a person over 10 years old measuring a minimum size of 6.51 square metres and a double bedroom measuring at least 110.22 square metres.
The previous rulings defined a HMO as ‘a property at least three storeys high, with communal facilities such as bathrooms and a kitchen, rented to at least three people who account for two or more households.’
As HMO legislation has expanded this has had a knock-on effect for landlords.
For brokers, it is likely that these changes will lead to increased pressure from their landlord clients to understand the new requirements.
It is vitally important to engage with landlord clients to ensure that their property portfolio meets the HMO requirements.
Landlords should be reminded that failing to meet these could lead to hefty fines.
Each property requires its own HMO licence, and for property investors and those with significant property portfolios this could dramatically increase the amount of administration and checks that the landlord must undertake.
Coupled with the fact that a HMO license is only valid for a maximum of five years, brokers should be speaking with clients regularly to understand their needs, and requirements.
Consider landlord protection policies
In addition to the legal requirements, brokers should also be encouraging clients to consider additional policies, such as additional risk protection for damage due to the fault of a tenant.
The option to guarantee income in case a tenant is left in arrears is another vital aspect that brokers should discuss with their clients, as is cover should the tenant be unable to meet rental payments.
The buy-to-let market has undergone a significant period of change, with recent months seeing stamp duty changes in addition to the HMO rulings.
Brokers can help to ensure clients are prepared for the changes and are also considering additional provisions.