Resident landlord taking in a family as lodgers: does this create an HMO?

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    Resident landlord taking in a family as lodgers: does this create an HMO?

    My first post, so please be gentle on me. Thanks for any pointers.

    I am a single individual and was planning for a while to get a house, the mortgage on which I can afford on my own without any rental income. However, I was hoping not to live alone and hence wanted to buy a rather large house and share it with a friend and his family (married couple and their four underage children), taking them as lodgers.

    However, it hit me recently that I will be possibly running afoul of the HMO regulations, since the above situation would be an not only an HMO (three people forming at least two households), but a large one at that! Thus I would need a license, so getting a mortgage would be difficult (let's not discuss the mortgage issue if HMO classification/license can be avoided).

    My situation is not really the usual case where you have multiple unrelated lodgers, since all of them really form a single household, but I wanted to ask what the law says.

    There is an exception where the landlord and his household count as one person, hence -- assuming I am reading the law correctly -- if it was my friend taking me as a lodger, the house would not be an HMO.

    I asked morgage advisers and were told that would not be an HMO, but were not given a reference to a ruling so I don't trust that.

    My question is, would this arrangement (single resident landlord plus lodgers forming a family of 6) be an HMO or not?

    #2
    Wouldn't be a HMO it's households (2) not people that matter.

    But... A) don't rent to friends or family...
    B) with 6 people & just you they'll end up running your home.

    Expecting mortgage "advisers" (salesman is more realistic) to understand housing law is likely to lead to disappointment.
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      I know you don’t want to know anything about mortgages, but as you will be resident in the property with the intention of subletting a major part of the property this would prove a problem in securing a mortgage. BtL’s are Unregulated but with you occupying the property this trips over to a Regulated Mortgage, something which falls outside the criteria of many leading lenders.
      Whilst I accept the comments of my learned friend theartfullodger regarding brokers they are in fact the best target to investigate what funding options are available; once that is established then the question of the property being an HMO can be resolved by talking with the Local Authority.

      Comment


        #4
        If youre not related to the family then yes; it would be a licensable HMO.

        Comment


          #5
          On the basis of what DPT57 has said , that would indeed complicate your proposition as the vast majority of lenders would noT accept even aN conventional Unregulated BTL from you as you are a First Time investor with absolutely no experience of such types of property.

          Comment


            #6
            Originally posted by BueJay View Post
            There is an exception where the landlord and his household count as one person, hence -- assuming I am reading the law correctly -- if it was my friend taking me as a lodger, the house would not be an HMO.

            I asked morgage advisers and were told that would not be an HMO, but were not given a reference to a ruling so I don't trust that.
            You should get a different mortgage broker.
            That many people in two households is an HMO (and will now require licensing).

            If your friend owned the property and took you in as a lodger, it wouldn't be an HMO.

            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment

            Latest Activity

            Collapse

            • Considering HMO licence
              LT72
              Hi I’m considering applying for a HMO license for a 5 bedroom house. But my fix rate mortgage is 6 months. So will need to find a new leader. So wondering if I should apply for it now, inform my current lender or wait till it end and get a HMO mortgage with the new leader. Is there a difference between...
              23-06-2019, 10:15 AM
            • Reply to Considering HMO licence
              JK0
              Why not let to 4 professionals, and leave one room vacant, so you aren't triggering licensing?
              23-06-2019, 21:11 PM
            • Reply to Considering HMO licence
              LT72
              Thanks DPT57 thanks for the detailed reply. Yes I’ve done the cost analysis and do admit it’s more cost to run a HMO. Its relatively big house
              and finding a family to rent it in order to achieve maximum rent is hard vs renting to 5 professionals. I’m guessing the best approach is apply a...
              23-06-2019, 21:08 PM
            • Short-term let (Air BnB, Booking.com) occupancy rates
              Bricey
              Hi all,

              This is my first time posting so please forgive me if I have used the incorrect forum.

              I am beginning to pull together an opportunity in the Bournemouth area to sublet an apartment on a HMO basis (shared bathroom and kitchen facilities) using outlets such as AirBnB,...
              18-06-2019, 21:03 PM
            • Reply to Short-term let (Air BnB, Booking.com) occupancy rates
              JamesHopeful
              I've stayed at an AirBnB similar to what is described. It was essentially just like staying at a small hotel, albeit without there being any staff permanently on site. It felt quite normal. But as above, I entirely agree that it'd either be C1 or sui generis use class....
              23-06-2019, 15:40 PM
            • Reply to Considering HMO licence
              DPT57
              This goes a bit beyond what youve asked, but can I suggest you do a full financial projection for this venture to make sure the sums really do stack up over a family let. As well as the licence fee you should factor in the cost of adaptations, increased mortgage and insurance costs, increased voids,...
              23-06-2019, 14:16 PM
            • Reply to Short-term let (Air BnB, Booking.com) occupancy rates
              jpkeates
              It can't be an HMO, because no one will have it as their main residence.
              It's essentially going to be a hotel or hostel - so it will require planning permission for a change of use, because it's going to be a commercial property not residential (and I think you'd be lucky to get it if the area...
              23-06-2019, 13:49 PM
            • Considering a HMO as an investment
              Draigflag
              Hey everyone, I've just joined, this is my first post. I'm Paul, I'm 31 and I live in Mid Wales. Under tragic circumstances I will be inheriting some capital sooner than I had imagined. I'm becoming keen on the idea of a HMO as an investment, but being pretty young and new to this field, I am looking...
              05-06-2019, 17:57 PM
            • Reply to Considering a HMO as an investment
              DPT57
              You will have to fully furnish them for this market and will need people to do the laundry, cleaning and change over between guests. Holidays lets is a very different market and would need speciallist insurance, probably non-standard btl mortgage if applicable and I think some Councils have a restriction...
              21-06-2019, 12:08 PM
            • Reply to Considering a HMO as an investment
              Draigflag
              Yes actually, as an alternative, I have considered buying a few smaller properties locally (houses are very cheap here) and having a letting agent fill them up for the summer for me. My parents ran a guest house for 20 years so I do actually have a bit of experience in this field. I live in a tourist...
              20-06-2019, 18:00 PM
            Working...
            X