The Quantum Guide to HMOs


As one of the best York letting agents, we at Quantum are committed to finding the best buildings (and living arrangements) for our clients. With more people renting and sharing homes, the popularity of HMOs and co-living is growing. In this article, we take you through communal living, and explain how to set up a HMO let yourself.

What are HMOs?

keys

HMO stands for House in Multiple Occupation. It refers to a house with at least three tenants forming more than one household and is usually referred to as a house share.

A household is defined as the residence of a single person, a couple or a family. An HMO, in comparison, can be the residence of more than one household despite there still being only one property. For example, if you had a small family and one unrelated person living in a property, they would count as two households.

People in HMOs share common areas such as bathrooms and kitchens. However, they will have individual bedrooms to sleep in.

Properties referred to as large HMOs typically have at least three storeys and five tenants. Unlike regular HMOs they need a licence from the local council to operate.

In the last few years, ‘co-living’ properties have started to spring up both in the UK and overseas. They are similar in some respects to HMOs; unrelated people live in a house and share communal areas.

However, they differ in two key ways:

The number of people in a co-living property can be much higher; some properties can have as many as 20 tenants. In others, hundreds of people may live and work in the same building.

The high number of tenants (and rents) incentivize landlords to offer high-quality accommodation. Co-living properties may have everything from a housekeeping service to games rooms, spas and even cinemas.

While we expect co-living to increase in popularity over the next few years, York letting agents shouldn’t be worried about them for the time being. Standard HMO properties are more feasible for the vast majority of landlords. That said co-living has a lot to teach us about making HMOs attractive for new tenants.

What type of property can be an HMO?

apartment building

Almost any residential property! The key condition is that the property is suitable for the number of occupants in terms of size and facilities. Moreover, the landlord and letting agent need to pass a background check to prove there are no criminal records or any breaches of either landlord laws or code of practice.

Shared houses, flats, hostels, and even bed-and-breakfast hotels can all be classed as HMOs.

Do note that properties owned and run by local authorities and housing associations are not classed as HMOs, as well as student halls of residence.

Who are HMOs suitable for?

woman with phone and laptop

Students are one of the most obvious groups; several students may share a house near their university as a cost-effective living space. But they’re also appealing for anyone who can’t afford to buy or rent a property on their own.

By necessity, HMOs require residents to be more sociable; they’ll be living, eating and relaxing in close proximity with several other people. Therefore, groups of young people who are all new to a city, all starting out at university or as young professionals or who are already friends, often look for HMO lettings.

HMOs may also appeal to today’s ‘digital nomads’. This refers to young people working in programming, graphic design or other IT-focused careers, who don’t need a fixed location to do their jobs. Digital nomads manage their own hours (though they often work more hours overall compared to their non-nomad digital peers) and move around more often than people in fixed jobs. HMOs allow them to forgo the usual stresses of life in favour of a simpler, more flexible existence. A more flexible letting option that also means they’ll be among other people is often an appealing property choice for them.

What do tenants need to know?

old suitcase

Tenants living in an HMO may have individual tenancies arranged with the landlord, or a joint tenancy. The difference between the two is that if one tenant leaves a joint tenancy early, the other tenants may have to make up the difference in rent themselves. You can read about joint tenancies here, and learn about other common tenancy types in our guide to tenancies.

Landlords have certain responsibilities to their tenants regardless of how big the property is. If you’re letting out a HMO, though, there are more things as a landlord you’ll have to think about.

An HMO landlord must:

–  Keep communal areas clean, tidy and free of obstructions

–  Provide enough bins, bin bags or means of waste disposal

–  Supply furniture and accommodation that’s in good condition

–  Make sure there are enough bathrooms and cooking facilities

–  Provide smoke alarms and safe fire escape routes

–  Keep water and drainage in good condition at all times

–  Arrange an annual gas safety check and check electrics every five years

Tenants have responsibilities as well. Anyone living in an HMO should:

– Keep the property clean and tidy

–  Keep fire escape routes clear

–  Test smoke alarms regularly and agree on a fire drill with your other occupants

–  Perform minor maintenance when needed, e.g. changing light bulbs, cleaning out sink wastes and washing windows

–  Be mindful of your HMO property-mates, as well as your other neighbours, by not being too noisy or disruptive

The biggest consideration for any potential HMO tenant is how much time you are prepared to spend with other people. Although you can expect your own room and a furnished property, you will be sharing bathrooms, kitchens and living spaces. Regular close proximity to a group of people you don’t know is an exciting opportunity to make new friends for life. But it may also be too close for comfort. It all depends on what your preferred living situation is.

What do landlords need to know?

person with paperwork at desk

Whether you let a house with one tenant or several, becoming a landlord requires a large investment of both time and money. However, HMOs offer benefits that normal houses do not:

–  More sources of income thanks to multiple tenants

–  Less painful void periods and arrears; if one tenant leaves or falls behind on rent, others still pay

–  In line with the current demand for flexible, affordable housing

At the same time, HMOs present their own challenges:

-More furniture to buy

-Longer mortgage process

-Not all properties are suitable as HMOs – size and amount of facilities available need to be considered 

There are also legal considerations. If you plan to let a property with five or more tenants and the property is at least three storeys high, you’ll need an HMO licence from your local council. Smaller properties may also need an HMO licence depending on the area. You can use the government’s HMO licence tool to find out if and who you need a licence from.

Once you receive your HMO licence, you will need to send a valid gas safety certificate to the council each year. You’ll also need to install smoke alarms, and have safety certificates for electrical goods available on request. Different councils may have their own requirements in addition to these, so speak to them for more details.

If you need to modify a property (e.g. adding more bedrooms, bathrooms or an extension) you will need planning permission. You can visit the Planning Portal website for more information.

How can I attract tenants to my property?

sitting room

 

As well as your legal obligations, you need to consider why people should come and live in your property. An HMO (or any rental property) can attract tenants in a variety of ways. We mentioned co-living properties as an emerging idea earlier; while we don’t expect you to put a cinema in your house, you can use nice living areas as a means of making it more appealing.

Try to balance the need for multiple bedrooms with the need for quality communal areas. Many of your potential tenants will expect to hang out together in the evening and on weekends. They may also eat together at mealtimes, so make sure living rooms and kitchens can accommodate all your tenants at once.

Try to make your living spaces as welcoming as you can. At the same time, remember that more tenants mean more wear and tear on your property. If you need to purchase new furniture, make sure you balance style with sturdiness where possible.

Consider the outside of the property as well. Is it close to transport links? Can tenants go shopping easily? Are there schools nearby? What’s the parking situation like? Put yourself in your tenant’s shoes as much as you can, and try to get a property that can accommodate your tenants’ basic requirements.


With a little planning and insight, an HMO could be the perfect choice whether you’re searching for a home or a business opportunity. And as York letting agents go, we pride ourselves in making letting a property as easy as possible.

Our expert team can help you fill your property as quickly and easily as possible. We’ll create quality adverts for your properties, find the perfect tenants (vital for any HMO) and research comparable properties to find the best rental price.

And if you’re a tenant looking for houses to rent in York, browse our properties here. We want to help you find your new home as quickly as possible and therefore offer property viewings through the weekend (Sundays, too!).

Give us a call today on 01904 631631.

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As one of the best York letting agents, we at Quantum are committed to finding the best buildings (and living arrangements) for our clients. With more people renting and sharing homes, the popularity of HMOs and co-living is growing. In this article, we take you through communal living, and explain how to set up a […]

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As one of the best York letting agents, we at Quantum are committed to finding the best buildings (and living arrangements) for our clients. With more people renting and sharing homes, the popularity of HMOs and co-living is growing. In this article, we take you through communal living, and explain how to set up a […]

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