How to convert a property into a HMO

Looking for your next investment venture? Why not consider turning a house into a HMO?

If you’re eager to make the most out of your money with a HMO conversion, then you’re in the right place. From obtaining the required planning permission to ensuring your new HMO property is compliant with the latest rules and regulations, we have the answers to all your HMO queries.

How does HMO property work?

Unlike a standard tenancy that is let to a single household, a HMO property is let to multiple (at least three) tenants from separate households. Also referred to as a multi-let or house share, HMOs are in high demand as the average size of the UK household continues to decline while the cost of living increases. Combined, these trends make investing in HMO property appealing to both landlords and developers alike.

How do you create an HMO?

Choose the right location

If you’re keen to discover how to create a HMO, the first thing you need to do is plenty of research and that starts with picking the perfect location! Choosing one that is in a pleasant area and close to local amenities for tenants that don’t drive, but is also affordable, is key to the success of your HMO. If you manage to find the right place, then you’ll often attract the best tenants too.

Focus on one particular type of HMO tenant

Typically, HMO tenants will either be students or single professionals. While the mixture of these two tenant groups can work in some HMOs, the difference in lifestyle can promote disagreements. Ultimately, these disturbances might negatively affect your HMO income by increasing tenant turnover. It’s therefore often best to stick to just one preferred tenant type.

Select a property with potential

Another aspect to consider when choosing a HMO conversion is its size. While HMOs can accommodate as few as three separate tenants, focusing on creating a HMO that’s big enough for five or six tenants will help to maximise your profits. Any more than this can create a feeling of overcrowding or become near impossible to manage.

If you’re still unsure of what the ideal HMO looks like, then consider a bustling student area filled with large, extendable properties. You’ll attract one particular tenant type that will likely want to remain in the area for at least two or three years while they study. Pair with this the impressive property sizes and you could easily convert one of these homes into a profitable HMO for five or six students.

Do you need planning permission for a HMO?

The answer to this question will depend upon the current use class and number of people living in the property. To understand what this means when it comes to HMO planning permission, we first need to unpick the definition of C3 and C4 use classes. Homes that have been classified as C3 are those occupied by a single person or family.

C4 use class homes, on the other hand, encompass properties that house up to six separate people living together using shared facilities – these properties won’t need planning permission as they’re already classed as a HMO. The process of converting a property from use class C3 to C4 is therefore the process of undertaking a HMO conversion.

While some local authorities grant automatic approval for HMO conversions by labelling them a ‘Permitted Development’, others will require full planning permission if they’re restricted by Article 4 directives. Article 4 restrictions are particularly prevalent in certain areas (like busy city centres) where there are many HMOs to ensure the health and safety of the local area.

While they can cover entire towns, they can also be limited to particular streets and certain areas, so it’s well worth contacting your local housing authority as well as speaking with architects and solicitors before you fall in love with the perfect HMO property investment.

Can I turn my house into an HMO?

Unfortunately, you cannot convert any old house into a HMO. You might need planning permission from your local council, as explained above, but you’ll also need to ensure that it provides enough space for three or more tenants to comfortably live. As well as the space, you should also consider the layout, quality of facilities and furnishings as a HMO letting has more rules and regulations than a standard let.

How do I make my house HMO compliant?

What does HMO compliant mean? Put simply, your HMO will be compliant if you adhere to the rules and regulations of this type of housing. From the extensive fire safety requirements to emergency lighting and installing locks for each bedroom, your HMO let will need to ensure safe and accessible escape routes in the event of a fire.

First and foremost, however, to let an HMO, you’ll need a valid HMO license. Valid for up to five years, you’ll need a separate license for each one of your HMOs to ensure your property is compliant. Once your HMO rental has been completed, it’ll be visited by your local authority within five years for risk assessment. Any issues that have been identified will need to be rectified as soon as possible – especially any unacceptable risks.

HMO property investment with Mistoria Group

Made up of a selection of bespoke companies, Mistoria Group stands out from the crowd with our dedication to delivering the best results for our clients.

With over 200 years of combined experience in the UK property investment and management sector, our in-house team of chartered accountants and investment professionals do everything from property sourcing to taxation.

We specialise in both high-yielding student and professional accommodation to ensure our clients receive quality advice, dedicated support and expert guidance.

Regardless of whether you’re interested in armchair investment, joint venture investment or merchant investment, we have a variety of secure investment avenues for our clients to discover.

To get in touch with one of our experienced team members, don’t hesitate to call us on 0800 500 3015.

Alternatively, you can always email any questions you might have to us at info@mistoriagroup.com or contact us online to discover how we can play a valuable part in your next investment venture.