Warning for Dunstable or Leighton Buzzard landlords with shared accommodation. You may now require a HMO Licence
Many landlords who have been renting out a property with possibly 3 - 4 bedrooms to sharers without the requirement for a HMO licence are not aware of the new legislation which came into force on the 1st October 2018.
This was highlighted to me last Thursday when I carried out a viewing at a 3 bedroom property we have in Dunstable. The viewer turned out to be an investor looking to turn the house into shared accommodation using a ‘Rent to Rent’ strategy. This could include couples sharing the double bedrooms.
What is ‘Rent to Rent’ ?
This is an investment strategy which has increased in popularity in the last 5 years as the investor does not have to buy a property to be able to rent it to tenants. Usually a 3 bedroom house with a separate dining room and lounge is required as the investor is paying to rent a 3 bedroom house, but can have 4 bedrooms by using the dining room as the 4th bedroom.
How does this work ?
From 1st October 2018 Tenants living in shared houses in England could face eviction or increases in rent because of changes to government rules covering shared accommodation which have requires more HMO’s to require a licence.
Under the old licensing scheme HMOs that were three or more storeys and occupied by five or more people forming at least two separate households were required to be licensed. The new mandatory licensing of HMOs has been extended so that smaller properties (i.e. any storey height) that house five or more people in two or more separate households will also require a licence.
What the HMO changes will mean for landlords
Landlords who suddenly find that they now have a licensable HMO which has extra costs associated with it are likely to look to pass on that additional cost in the price, meaning tenants will pay more in rent.
Daniel Bourke is the owner of Belvoir Lettings Dunstable and in his previous career in Architecture he was an Associate in a leading London Architectural practice