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What is an HMO?
A House in Multiple Occupation or HMO is a term used for privately owned accommodation shared amongst several people. A variety of housing can fall under this term, but it varies depending on the number of households and living arrangements.
HMOs can include shared houses, hostels, refuges, or employee accommodation amongst other facilities as it’s an expansive term.
According to the Housing Act 2004, to be classed as an HMO property the occupants cannot form a single household and need to be made of three unrelated people living in a privately rented property which must be their only or main residence, and used solely for residential purposes.
What Is Article 4?
Article 4 removes permitted development rights from the owner to make developmental changes to a property where planning permission isn’t required from the council. It is in place for certain areas or whole parts of a property, and there are currently 31 in the City and County of Swansea.
Article 4 Directions are also used to ensure there is balanced housing without too many HMOs in one location to prevent increased noise complaints, anti-social behaviour, increased pressure on local services and struggles with parking.
If you wish to make changes to properties affected by Article 4 then you need to contact the council beforehand to obtain approval from the planning authority.
Does an HMO require planning permission?
HMOs are becoming an increasingly popular method of affordable accommodation, but to change a home into an HMO there are some scenarios where you may require planning permission beforehand.
Property is classed as either a C3 dwelling, C4 small HMO, or Large HMO property. To change your property from a C3 to C4 in Swansea, you need to follow the council's planning applications.
Do students pay for council tax in an HMO?
Students living in HMO properties are exempt from paying council tax, as long as they are full-time students, meaning their courses involve at least 24 weeks a year of study and 21 hours of study a week..
In houses of multiple occupation where solely students reside, all tenants are exempt from paying council tax. Still, in non-exempt properties with students residing then they will be excluded from the total calculated bill and do not need to pay.
Do all HMOs need a license?
HMO licensing is required to create an overview of the conditions and suitability of properties, and both license holders and any additional managers need to be suitable with a structure in place for financial agreements.
The licensing also ensures that safety is in place for tenants, landlords, and local residents. In Swansea, mandatory licensing is required across the entire area. If a property has three or more levels or a total of 5 or more separate tenants then an HMO license is necessary.
What rights do HMO tenants have?
HMO tenants have the same level of rights as any tenant, and as a landlord, you still need to follow the same legal processes for management.
Who pays the bills in an HMO?
The way utilities and other bills are paid in an HMO vary depending on the landlord's discretion. In some shared properties, you may find the rent you paid is an “all-in” price that includes the additional bills, and the utilities will be paid in the landlord's name using this cost.
If a group is living on one contract in a property, then usually the bills are paid separately from the rent but this is a huge variable that is usually down to unique choice.
How do I avoid an HMO license?
In Swansea, failure to license an HMO property is a criminal offence that can face prosecution and a fine of up to £20,000. Tenants will also be liable to claim back any rent paid whilst the landlord was not under license via the Residential Property Tribunal.
Failure to comply with the conditions of your license can also result in a £5,000 fine and end in a full license revoke, and the council will absorb management of the property and collect rent.
What are the pros and cons of HMO?
HMO properties are becoming increasingly popular in Swansea with the increasing numbers of students, and therefore are a fantastic investment opportunity for landlords, even more so than standard buy-to-let scenarios.
The higher yield and demand are a huge benefit, but some strict licensing and legislations need to be followed such as HMO licensing and planning permissions (where applicable).
Do you need a living room in an HMO?
The size and room requirements in an HMO will vary based on the number of people living in the space. Each person or couple in an HMO will have a bedroom of at least 6.52 m² for a single person, and couples need 10.23 m².
For 5 people or less, you need a minimum of 7 m² in the kitchen and an additional living/ dining room of at least 11 m².
In shared housing with six to ten occupants, there needs to be a minimum of 10 m² in the kitchen, and a minimum of 16.5 m² in a separate living/ dining room.
Does an HMO increase the value of a property?
The value of an HMO property will vary depending on the conditions and wear and tear typically faced by properties of multiple occupancies. Generally, the levels of repair and redecoration cause a decrease in value.
Fortunately, in a well-managed HMO, the additional licensing and layout in place can increase the property value as the demand for multiple occupancy housing is increasing, especially in the Swansea area.
What are landlords responsibilities in an HMO?
It is the landlord's responsibility to ensure HMOs are following the correct safety and sanitation checks to ensure the premises are safe to live in. There needs to be evidence these health and safety checks have been followed, including:
Enough bin/disposal units for residents
Gas & electric safety checks
Smoke alarms/ heat detectors
Washing and cooking facilities
Good communal facilities
Water safety checks (Legionella risk assessments)