Concentrating on Buy to Lets this week as yet more changes are on the horizon! With effect from 1st October 2018, new mandatory rules will be applicable to Houses of Multiple Occupation (HMO). Any property with five or more occupants (not all related) will now need an HMO licence, as the Licensing of Houses in Multiple Occupation Order 2018 takes impact.
The government undertook a consultation last year designed to help councils standardise living conditions in HMO properties. It detailed the plans to extend the scope of licencing for HMO properties.
Currently the licence applies to properties with three or more stories and five or more occupants (not related to each other). However, it was decided to change these requirements and ultimately increase the number of properties that require a licence.
A minimum size for bedrooms has also been implemented and the guidance will recommend that floor space be no less than 6.51sqm for a single adult and 10.22sqm for two adults sharing. Any room with less than 4.64sqm is not to be used as sleeping accommodation.
These rules are estimated to affect around 170,000 properties (on top of the existing 60,000 licenced) and landlords that fall in to the new rules must apply for a licence or temporary exemption before 1st October. Failure to do so will be considered a criminal offence.
These changes will impact both existing and prospective HMO landlords and full details on how to obtain licences will be available on the relevant councils’ websites, alongside other requirements the individual council may have put in place.
In other news, our good friends at Precise Mortgages have revamped their Buy to Let product ranges and rates now start from 2.99%. They also allow rental calculations to be assessed on the pay rate on their five year fixed rates, starting from just 3.39% and some products also allow ‘top slicing’. This means that landlords with three or more mortgage properties, may use their income to assist with affordability on the buy to let property, if the rental income does not quite cover the loan required. This can be complex, so speak to the experts…