As a town planning consultant in England, one of the most frequent and intriguing subjects we encounter is Houses in Multiple Occupation (HMOs). Whether you are a property investor, developer, or homeowner looking to expand your property portfolio, understanding HMO regulations and planning requirements is crucial to ensuring your project is successful, compliant, and profitable.
In this article, we will explore what an HMO is, why they are a popular choice for landlords and developers, and most importantly, the planning considerations you need to be aware of when converting a property into an HMO or developing a new HMO.
What is an HMO?
A House in Multiple Occupation (HMO) refers to a property that is rented out to three or more tenants who are not from the same household (i.e., a family), but share common areas such as a kitchen, bathroom, or living room. In essence, an HMO is a shared living arrangement where individuals live together but maintain their own separate living spaces.
HMOs come in various forms, from traditional houses to large-scale properties designed specifically for multiple tenants, such as student accommodation or shared houses for young professionals. The popularity of HMOs in the private rental sector has surged in recent years due to their higher rental yields compared to single-family rentals, but they also bring with them specific planning and regulatory challenges.
Why are HMOs so Popular?
There are several reasons why HMOs have become a preferred investment for many property owners and developers:
- Increased Rental Yield
Because the rent is charged per room, rather than for the whole property, HMOs typically offer higher rental returns compared to traditional single-family lettings. This is particularly attractive to property investors looking for greater cash flow from their properties.
- Demand from Tenants
HMOs are often in high demand, especially in urban areas with a large population of students, young professionals, or migrant workers. These tenants are typically looking for affordable, flexible accommodation with shared communal facilities, making HMOs a solution that fits their needs.
- Flexibility and Scale
For property developers, converting an existing property into an HMO or constructing a new one offers greater flexibility. HMOs allow for different layouts and can be designed to cater to a variety of tenant needs, from affordable student housing to high-end professional lets.
The Planning Considerations for HMOs
While HMOs can be highly lucrative, they come with their own set of planning requirements that must be understood and adhered to. Here are the key considerations you need to be aware of when planning an HMO development:
- HMO Licensing Requirements
In the UK, HMOs with five or more tenants, forming two or more households, must be licensed with the local council under the HMO licensing scheme. The purpose of the licensing system is to ensure that HMOs meet basic health and safety standards and are properly managed. The licensing process includes checks on fire safety, sanitation, and waste management, among other things.
For smaller HMOs (with fewer than five tenants), licensing may not be required, but local authorities may still impose additional conditions depending on the size of the property or the location. Always check the specific requirements in your area to avoid penalties.
Don’t fall into the trap that if you have a license you don’t need planning permission of vice versa, the onus is on you to check.
- Change of Use – Planning Permission
Converting a property into an HMO can require planning permission. In some cases, a change of use application can be necessary to change a property’s classification to an HMO.
However, certain HMOs, typically those with fewer than six residents (Class C4), may be classified under permitted development rights, meaning they can be converted without the need for addition planning permission. It’s important to consult with your local planning authority to confirm whether a planning application is needed in your case, as restrictions can be imposed to remove this permitted development right. A Certiciate of Lawfulness is a useful way to ensure you development is lawful if you’re in doubt: You might also find our articles about HMO’s & Certificates of Lawful Development and 10 steps to securing a certificate of lawfulness for your house in multiple occupation (HMO) useful.
For larger HMOs (those with more than six residents), the property will be classified as a Sui Generis use, which means it requires a full planning application and is subject to additional scrutiny by the local authority.
- Local Planning Policies and Restrictions
Local councils may have specific policies governing the development of HMOs, particularly in areas where there is already a high concentration of shared housing. For example, some councils may restrict the number of HMOs in a particular area to avoid over-concentration and preserve the character of the neighbourhood.
Councils may also impose minimum space standards for rooms in HMOs, particularly for smaller rooms that are often seen in student housing. This ensures that tenants are not living in overcrowded or substandard conditions.
- Impact on the Local Community
One of the most significant considerations when applying for planning permission for an HMO is the potential impact on the local community. Local authorities will assess whether the development will lead to an imbalance in the housing mix or disrupt the local area’s character. For example, they may consider factors such as:
- Noise levels: HMOs can sometimes be perceived as causing higher levels of noise, especially in areas with large student populations or transient tenants.
- Parking and transport: HMOs with a higher number of tenants may lead to increased pressure on local parking or public transport infrastructure, especially in residential areas.
- Waste management: An increase in tenants may mean more waste is generated, which could raise concerns about cleanliness and waste collection.
- Building Regulations Compliance
HMOs must comply with specific building regulations, particularly around fire safety, electrical safety, and the general habitability of the property. For instance, all HMOs must have:
- Adequate fire safety measures such as smoke alarms, fire doors, and fire escapes.
- Shared kitchen and bathroom facilities that meet the minimum space and functionality requirements.
- Adequate ventilation and heating.
Failure to comply with building regulations can lead to significant penalties or the refusal of a license, so it’s important to ensure your HMO meets all necessary standards.
The Benefits of Working with a Town Planning Consultant
Navigating the planning process for HMOs can be complex, especially when balancing the various regulations, local policies, and licensing requirements. A qualified town planning consultant can help you at every stage of the process, from initial feasibility assessments to submitting planning applications and managing your HMO license. Working with an experienced consultant will:
- Help you understand whether your property is suitable for conversion into an HMO.
- Guide you through local planning policies and ensure you submit a robust application.
- Ensure that all building regulations and safety standards are met.
- Maximise your chances of gaining planning permission.
Conclusion
HMOs offer an exciting opportunity for property developers and investors looking to maximise rental income, but they come with a unique set of challenges. By understanding the planning and regulatory requirements from the outset, you can ensure your HMO project is both legally compliant and profitable.
Related Content:
As well as our set of FREE EBOOKS offering information on the basics of key town planning topics, we’ve also produced handy practical guides to help unravel the red tape of town planning.
Our Practical Guide Houses in Multiple Occupation (HMOs) is available if you are considered a HMO development. If If you’re considering converting a property into an HMO or developing one from scratch, we recommend consulting with a planning professional who can guide you through the process and help you navigate the complexities of HMO planning. At Planning House, we provide expert advice and support to ensure your HMO development meets all necessary requirements, from planning permission to licensing, and beyond, CONTACT US to discuss your situation.
