HMOs are still a buzzword in the private rented sector today and are very lucrative meaning they occupy a part of the market that’s increasingly attractive to landlords with figures suggesting the average rental yield for a HMO is 9.7%, much higher than the 5.6% average yield in the single unit market.
Operating an HMO can provide excellent rewards but carries with it a lot of risks if things don’t go right, including penalties of up to £20’000 for not having the correct license or custodial prison terms for failing to undertake your obligations under Health & Safety.
If you own an HMO in Leicester, unlike other private landlords, you will have more obligations to comply with and this factsheet gives you the information you need to meet the minimum requirements for HMO licensing in Leicester and gives an insight into some of the minimum requirements to be approved for an HMO license by Leicester City Council.
Download your free Leicester HMO Factsheet by completing the form to the right. Your factsheet will be emailed to you so you can download it for easy reference or print it off to read on the go.
What is an HMO?
A house in multiple occupation (HMO) is a property rented out by at least 3 people who are not from 1 ‘household’ (for example a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’.
How to set up a HMO
When setting up a HMO, it is important to comply with local licensing laws and to construct the HMO in such a way that it is compliant with local rules otherwise, a license will not be granted. To operate the premises as a HMO, you MUST apply to Leicester City Council for a license, failing to do so could land you with a fine of £20’000. You MUST apply for a license before letting the property to tenants and can allow up to one household to move in without a license being in place, however, if you allow any more households to move in, you will be managing an unlicensed HMO which is illegal.
You must meet minimum standards relating to:
- The size of the property and minimum room sizes.
- The amount of living space available within the property.
- How many occupants you intend to house.
- Gas and electrical safety, and;
- That you’re a fit and proper person to act as landlord of an HMO.
Councils pay a lot of attention to the room sizes of bedrooms and if your proposed room sizes fall outside of the minimum guidelines then you will be in breach of your license if you allow occupants to sleep in these rooms. You will not be able to use rooms as bedrooms if they do not meet the minimum size requirements. The size requirements differ for children under 10 years old and Leicester City Council stipulate a maximum number of occupants in any room and te maximum number of occupants in the property.
Fit & Proper Person Checks
When applying for a license, Leicester City Council will check whether you are a fit and proper person to act as the landlord, they determine whether you’re a fit and proper person by checking your criminal record and checking you have no previous breaches of legislation (whether specifically related to housing and being a landlord or not) or other codes of practice. If you do have a criminal record or have been guilty of landlord offences in the past, it may not mean you won’t be eligible for a license – call us on 0116 321 4970 to find out how we can help if you fear you may not meet the fit and proper person tests.