HMO Lettings – Guide to HMO Licenses

HMO Lettings – Guide to HMO Licenses

Introduction to HMO Lettings - Your Guide to HMO Licenses

As tenant demand for premium HMOs continues to skyrocket, recent studies draw attention to the hefty penalties for non-compliance with HMO regulations - ranging from £12,000 for not having a license to £31,250 for violation of license conditions. This emphasises the necessity for estate agents and their landlords at 'At The Place' to stay on top of their HMO lettings licensing requirements.

hmo lettings

What does House in Multiple Occupation (HMO) mean?

HMO licensing is pertinent to large HMOs located in England or Wales. A House in Multiple Occupation (HMO) is a property that is leased by a minimum of three people who aren't part of a single household but use common facilities such as the bathroom and kitchen within the property. A household typically includes a family or a couple, while a group of friends sharing a house doesn't qualify as one. What characterises a large HMO? A property is recognised as a large HMO if all these conditions are met:

  • It's leased to five or more individuals who constitute more than one household
  • Some or all tenants share amenities such as toilet, bathroom, or kitchen
  • At least one tenant is paying rent (or it's paid on their behalf by their employer)

Are HMO licenses needed for small HMO lettings?

Owners of smaller HMOs may still require HMO licenses, subject to the location of the property. This information can be verified with the local council of the property's area.

hmo license

What prerequisites must a property and its landlord or agent satisfy to secure a HMO license?

To receive a HMO license, a property should be apt for the number of residents, which relies on its size and amenities. The HMO lettings manager - the landlord or the agent - must be regarded as "fit and proper", implying that they shouldn't have any criminal history or prior contravention of landlord laws or codes of practice.

What responsibilities do the agent or landlord of an HMO lettings property have? The landlord or estate agent managing an HMO must also:

  • provide the council with an updated gas safety certificate annually,
  • install and upkeep smoke alarms,
  • offer safety certificates for all electric appliances upon request.
Additional conditions, such as enhancing the quality of the property's amenities, may be added to the HMO license by the council.
hmo lettings

What are the repercussions for not having a license?

Estate agents must confirm that their landlords' properties are duly licensed, or they could face prosecution and an uncapped fine or a civil penalty up to £30,000, while landlords might be compelled to refund tenants up to a year's rent.

Does licensing only apply to HMOs?

Even if a property is not an HMO, it may still be subject to further license stipulations. The Housing Act 2004 grants local authorities the right to enforce selective licensing of privately rented properties to tackle issues in their area related to low housing demand and/or disruptive behaviour. It's essential to check with the respective local authority to discern if a rental property needs to be licensed.

hmo licenses

What impact have the HMO licensing laws had?

Data from Octane Capital in April revealed that the average price of HMOs in Britain is £364,508, a whopping 32% higher than the general property market. However, the data also indicates a decline in the number of HMOs on the market, decreasing by 3% - from 511,278 in 2019/2020 to 497,884 in 2020/21 - with the steepest drop observed in London. "Amendments to HMO licensing have unquestionably aimed to guarantee the safety and wellbeing of the tenants nationwide and ensure everyone has access to a basic standard of living. However, this has led to a decrease in the quantity of operational HMOs in the rental market, especially in London," says Jonathan Samuels, CEO of Octane Capital. Whether this is a lasting pattern or merely a temporary dip following alterations to tenant movement during the pandemic is yet to be seen.

hmo lettings

At 'At The Place', we strive to guide you through your HMO lettings journey seamlessly, ensuring all regulatory requirements are met. If you have any questions or need assistance with your HMO lettings, please get in touch with us at 0333 358 0668 or email us at

estate agents near me



How much are estate agent fees?

How much are estate agents near me fees?

Typically, estate agents fees can reach heights of 3.6% of the sale price and can fluctuate based on the number of agents attempting to sell your property and the quality of your initial negotiations. In the year 2022, the average fee for an estate agent stood at 1.42%. Therefore, if your property was sold for a price of £275,000, the agent's share would be £3,900. It is worth noting that @ThePlace fees are considerably cheaper than these.

Should you use more than one estate agent?

Should you use more than one estate agent?

It's typically practical to engage two estate agents near me under a joint sole agency agreement for selling a single property only if you intend to hire a nationally operating specialist agent alongside a local generalist. For instance, you might prefer a national agent specialising in high-end properties, in addition to a local agent familiar with your area. Joint agency agreements often carry higher charges, usually around 2.4% including VAT. Engaging two local agents under a joint sole agreement usually doesn't make much sense, as their market coverage will overlap, and they won't be motivated to outdo each other to close the deal. Employing two estate agents also carries the risk of one agent attempting to benefit from the efforts of the other without contributing equally.

Do I have to pay estate agent fees if I decide not to sell?

Do I have to pay estate agents near me fees if I decide not to sell?

If you decide to pull out of a sale, it's customary to face charges to cover the expenses an agent has already incurred, like advertising. Also, it's standard to pay part or all of the estate agent's commission, but only if your signed contract includes a "ready, willing and able purchaser" clause. Essentially, this clause signifies that you're obligated to pay the agent for their work in identifying a potential buyer, even if unforeseen circumstances cause you to back out of the sale.

What is the best way to sell a house UK?

What is the best way to sell a house UK?

To maximise the sale price of your property, it's recommended to collaborate with a reputable local estate agents near me. Local estate agents are well-versed in the specific characteristics and trends of your area's property market. They have in-depth knowledge about the neighbourhood, understanding what attracts buyers and can accordingly highlight these features in their marketing efforts.

A good local estate agents also has a strong network of potential buyers, which can expedite the sale process. They can provide professional advice on the right pricing strategy based on comparable sales in your area and current market conditions. Additionally, their negotiation skills and expertise can help secure the highest possible price for your property.

Are estate agents regulated?

Are estate agents regulated?

The primary regulation of estate agents is dictated by the Estate Agents Act 1979 (EAA) and the Consumer Protection from Unfair Trading Regulations 2008. Beyond this statutory regulation, since October 1, 2008, all UK-based estate agents involved in residential estate agency work must be part of an approved redress scheme. They can choose either The Property Ombudsman or the Property Redress Scheme, a requirement put forth by the Consumers, Estate Agents and Redress Act 2007.

Will estate agents lie about offers?

Will estate agents lie about offers?

As part of the regulations associated with an ombudsman, estate agents are strictly prohibited from fabricating or concocting details about any existing or non-existing offer. Additionally, it is mandatory for estate agents to promptly communicate offers to the property sellers, and this must be done in writing.

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