This October, changes to rules around Houses under Multiple Occupation (HMO) are expected to come into force. These changes will redefine what is counted as HMO, meaning that, from October, there will be a significantly larger number of landlords who will need to ensure they are compliant.
Specialist lender InterBay Commercial has put together some advice for landlords on what they need to know about the changes.
What do landlords need to know?
Currently, properties with three or more storeys that are occupied by five or more people from two or more households require an HMO licence. However, the new rules coming into force in October will extend the scope of licensing for HMOs. An HMO licence will now be required for all properties with five or more people from two or more households, regardless of the number of storeys in the property. This means a substantially higher number of properties will require a licence from October.
In addition to extending the licensing requirements, the government is also proposing the introduction of a minimum room size for bedrooms in licensed HMOs. The new guidance will recommend floor space be no less than 6.51sqm and 10.22sqm for single and two adults sharing respectively. These new rules are expected to impact approximately 170,000 properties on top of the 60,000 which already have an HMO licence.
How can bridging finance help landlords?
For clients needing to make changes quickly, bridging finance can be an invaluable route of accessing funding so that they can get the changes made within the necessary timeframe. Indeed, some bridging finance providers such as InterBay will allow borrowers to acquire finance from day 1 before applying for planning permission, and even those that do not will have shorter turnaround times and greater flexibility than other lenders. This will help landlords to make sure they are fully compliant by October.
Things to remember
Landlords whose properties are going to come under the umbrella of an HMO need to make themselves aware now not only of the changes but also understand the steps they will need to take in order to get a licence. This will include finding the funding necessary to increase room size if needed.
One final thing to remember is that landlords will be required to renew their licence through their local council every five years, for each individual property in their portfolio.
If you have any questions about upcoming regulation changes or are interested in finance from Interbay, get in touch with us today on 01923 655 441.