What is an HMO?

What is an HMO? | Ask Greens Lettings in South East London SE18

An HMO, or House in Multiple Occupancy, is a term used for a property occupied by three or more tenants that are not related to each other. It is more typically called a house share or flat share. In an HMO, areas such as the living room, dining area, kitchen, bathroom and other amenities are shared. 

To ensure that proper and safe management standards are met, certain properties (e.g. 3+ storeys with 5+ occupants) may require licensure by the council. Learn more about it here.

Greens Lettings, has the expertise, knowledge and experience needed to provide professional HMO management services. If you are considering renting out rooms in your own house, we are the right company to help you get started. With competitive fees, we offer streamlined services to first-time landlords who want a headache and stress-free way of starting, planning, and owning an HMO. We will even find responsible tenants and collect the rent for you. Go to our HMO page to learn more or contact us today to speak to one of our friendly admin staff. Your search for an HMO Specialist ends here.

HMO Conversions

Converting your home or flat to an HMO can be a fun and exciting project, and can potentially earn you a nice income stream . There are some important things to consider to help you decide if its a viable option for you.

1. Is there even a market in your area? Have a walk around? Is there a significant amount of young professionals in your area? How are the employment opportunities near you? What about proximity of schools, employers, hospitals, shopping, etc?

2. Consider meeting with your Local Council's HMO Licensing Department to clear up a few of your questions if you have any. HMO Conversions often involve a considerable amount of added investment/requirements and you will have peace of mind having all your bases covered. Of course, it would be great to follow up everything discussed in writing and that you meet all of the HMO Regulations.

3. Is there a council tax and other fees involved? If yes, remember to subtract this from your profits.

4. Do you have fire doors, smoke alarms, extra bathrooms, kitchens? What type of Tenants do you think you'll have? Students, asylum seekers may need cooking utensils, and some basic furniture.

5. Do you have wash basins in every room?

6. You might consider hiring a maid for the common areas.

7. There are some other communal interests to consider: communal lounging areas, communal electricity costs, communal water costs, etc.

8. Consider the letting costs of the house when it was a non HMO. This will give you a better idea if the HMO Conversion costs is worth it or not. Check the Internet and ask around. You might be able to join other HMO Developers nearby. Greens Lettings is locaed in South East London, SE18, Zone 4. We would be happy to meet you in person and help get you all sorted out.

If you need any assistance in any aspect of converting to an HMO, don't hesitate to contact us or browse through our website for more information. 

HMO Tax Implications

There are tax implications that you need to understand when you’re renting out a property in UK. Yes, even for HMO’s or House in Multiple Occupation. An HMO is any type of residence which:

  • Was initially built and afterward adapted for living by persons or licensees to live in who do not comprise a single household; or
  • Is occupied by one or more people, each of who is a tenant of the house, flat etc. and has a license to occupy the building/house/flat as a whole but does not pay rent for the whole residence.

Many Landlords are turning into investing in HMO’s due to high rental returns. But, higher profit means you need to pay higher taxes. Not if you eliminate some works though. One example is this; most spending in HMO is a revenue cost (refurbishment, structural work, capital items like adding an extension, building an annex etc.) and is considered tax deductible.

There is also the possibility to claim “Plant and Machinery Capital Allowances”. Capital allowances are tax relief associated with qualifying items like fixture and fittings or assets within the ‘non-dwelling areas’ of HMO, multi-occupancy properties and student lets that can be offset against non-property income to generate tax rebates.

HMO owners are liable to pay Council Tax if each tenant has his/her own tenancy agreement and only pays a part of the property. Tenants will have to pay Council Tax if there is only one tenancy agreement with all the tenants names included for the whole of the property, and all of the rent due. HMOs are exempt of Council Tax if solely students, mentally impaired, soldiers and diplomats occupy it.

If you have any questions about HMOs and their tax implications, don't hesitate to contact us or browse through our website for more information.  

HMO Management

Greens Lettings provides professional services and advice on all aspects of HMO management. We make sure that all our tenants in HMO’s reside in safe and healthy houses whilst enforcing the provisions of the Housing Law.

Our duties as your professional HMO Management agent include but are not limited to:

  • Provide complete contact information to each HMO household; must be legible and clearly displayed at a prominent or communal area in the house
  • Take very stringent safety measures. Fire exit must at all times be kept free of any obstruction and kept in good order and repair.
  • Fire fighting equipment such as fire retardants or extinguishers and emergency lighting and alarms must be regularly checked and kept in good working order. 
  • Design and structure of the HMO must all contribute and be conducive to safe living for all occupiers. Any unsafe structure must be made safe by repairing or renovating as needed.
  • In HMOs of more than four occupants, notices indicating the location of means of escape from fire must be displayed so they are clearly visible to all occupiers.
  • Manage repairs and make sure they are attended to completed and completed as promptly as possible to prevent further damage or avoid safety hazards
  • Maintain water supply; water storage tanks and pipes must always be in clean condition; strict safety measures observed and implemented to prevent contamination 
  • Maintain gas, electricity and drainage and make sure there are no service interruptions. Our qualified engineers conduct regular tests and inspections of all fixed electrical installations every 3 years. Gas and electrical safety records and test results are provided by us to the council within 7 days upon request.
  • Ensure that cleanliness of HMO is observed, as well as orderliness and proper handling of facilities and equipment. Parts such as windows or other means of ventilation and light fittings are always kept in good repair for every occupier to use. All furniture and furnishings supplied must be clean and in good working order.
  • Maintain gardens, yards, walls and other parts of the HMO; ensure that they are safe, well-maintained and kept clean and presentable
  • Maintain responsible waste management; provide enough bins for rubbish and adequate means of disposal

...and more! Contact us today for more information. 

HMO Licensing Costs

You may ask why are there HMO Licensing costs in the first place?

  • Living in HMOs is often the last resort for the most vulnerable people in our society. Indeed, it is almost a last option, and most likely not their first. Because of this, government has recognized the need to regulate HMOs to protect HMO tenants from being taken advantage of, and to ensure a safe and secure living situation.
  • Licensing helps ensure that landlords and/or their Property Managers are competent to let.
  • Licensing helps make sure that that the property is adequate enough for the amount of people residing in them.
  • Licensing helps identify sub-standard HMO properties so that they can be repaired.
  • Check with your Council in your borough. If the property is sub-standard, the Council can sometimes intervene and rectify the situation.

Do all HMO need to be licensed?

  • The quick answer is no. However, the Housing Act of 2004, which came effective on April 6th, 2006 states that there will be three types of HMO Licensing.

                 1.  Compulsory Licensing
                        -  For dwellings of three storeys or more.
                        -  For households of five or more persons.
                        -  For dwellings with any commonal areas such as: toilets, bathrooms, and cooking areas. 

                  2.  Additional Licensing: Up to the discretion of the Council in your borough:
                        - Example: two storey buildings with three or more students.
                        - Example: asylum seekers.

                  3.  Selective Licensing: Up to the discretion of the Council in your borough:
                        - Example: areas with low demand for housing.                     

Note: Anyone who owns or manages an HMO must seek out the current HMO Licensing requirements at your local Council Burrough.


Greens Lettings is a rental management company and HMO Expert based in Shooters Hill SE18, currently managing and letting properties within various locations in South East London such as Abbey Wood, Blackheath, Kidbrooke, Charlton, Woolwich, Thamesmead and many other surrounding areas. We'd love to serve you!

Do you have questions about HMOs? You can contact a Lettings and HMO Expert from Greens Lettings by clicking here. 

 


© Greens Lettings 2015 | Letting Agent SE18 Property Management | Landlords  | HMO Experts and Specialists

Greens Lettings is a property management company based in Shooters Hill, London. As your HMO expert in SE18, we continue to serve places in South East London such as SE2 (Abbey Wood), SE3 (Blackheath), SE7 (Charlton), SE9 (Eltham), SE10 (Greenwich South St), SE18 (Woolwich), SE23 (Lewisham) and SE28 (Thamesmead) — just to name a few. We are your local online letting agent specialising in HMO conversions and full management. We offer free consultation and free property valuation. Contact Greens Lettings here.